CONSTRUCTION OF THE WIND POWER STATION WITH A CAPACITY OF 500 MW

Country: UKRAINE Sector: GREEN ENERGY Type of project: START-UP Date: JUNE 2011 CONSTRUCTION OF THE WIND POWER STATION WITH A CAPACITY OF 500 MW Main features of the Project Proposal. Asset Management Company “NIKO” is currently developing a project in wind energy sector and is looking for an Required investments, mln EUR 760.0 experienced operator to join our project to lead all issues concerned full-scope exploitation and running of Wind Power Investments per 1 MW, mln EUR 1.52 Station (WPS) with a capacity of 500 MW in Ukraine starting September 2013. The total amount of the investment budget of this project is 760.0 million EUR, or 1.52 million EUR per 1 MW. WPSs nominal capacity, MW 500 Quantity of WPP, units 200 1 WPP’s nominal capacity, MW 2.5 Location of WPS-500. Western Ukraine, Chernivtsi region. Electricity annual production (nominal), 4 380 mln kWh Stage. At that moment experts of our company has investigated the territory of the region, made a preliminary assessment Electricity annual production (real), mln 1 445 of wind potential and electricity production of the future WPS, evaluated the technical ability for connection to the kWh Utilization rate of installed capacity 0.33 government transmission network, pre-selected equipment for the construction of wind turbines (the final decision according to the specifications will be made after the results of wind speed measurements). Fixed minimum size of “green” tariff 0.136 (incl. VAT), EUR/kWh Market. Wind potential of Ukraine is estimated at 16-24 MW, which is about 30-45% of the capacity of all power plants of Fixed minimum size of “green” tariff 0.113 (excl. VAT), EUR/kWh the country. The total capacity of existing Wind Power Stations in Ukraine is only 100 MW. Year of First Sales 2013 Law regulation. Ukraine has established all of the most important conditions for the development of wind direction in its Year of full capacity achiving 2015 energy sector: introduced a relatively high “green tariff” (now acting), abolished all taxes on the import of energy-saving Sales 2016, mln EUR 219.0 equipment, as well as canceled profit tax for enterprises, producing electricity from renewable energy sources. EBITDA 2016, mln EUR 202.9 Net profit 2016, mln EUR 114.7 Gross Profit Margin, % 59.7 The scheme of functioning of the Ukrainian energy market EBITDA Margin, % 92.6 Net Profit Margin,% 52.2 electricity export TPP VAT (avg. for 10 years), % 17.5 NPP exporter VAT on equipment import none Kyiv Profit tax (up to 2020), % 0.0 Wholesale HPP Energy Market Pay-Back Period (PBP), years 6.3 thermoelectric distributing companies plants (oblenergos) Discounted Pay-Back Period (DPBP), 7.6 years WPP Internal rate of return (IRR), % 22.8 other commercial residential Chernivtsi producers consumers consumers For more information please contact Julia Martynenko, Head of R&D, j.martynenko@niko.ua or Volodymyr Gnatyshin, CEO, v.gnatyshin@niko.ua Asset Management Company “NIKO” | Illinsky Business Center, 8 Illinska Str., Entrance 11, Kyiv, 04070, Ukraine Т: +38 (044) 200 2122, F: +38 (044) 200 2123 | e-mail: amc@niko.ua | website: www.amc.niko.ua

Country: UKRAINE Sector: GREEN ENERGY Type of project: START-UP Date: JUNE 2011 WIND POWER POTENTIAL OF UKRAINE Up to date the total capacity of installed wind power stations in Ukraine is hardly reaches 100 MW (for comparison – it is less than 1 thermal power unit). While Ukrainian wind power potential in whole is estimated at 16-24 ths MW, which is about 30-45% of the capacity of all country power stations. In April 2009 the amendments to the Law of Ukraine «On Electricity» concerning to the stimulation of the use of alternative resources of energy were accepted. According to these changes the volume of "green" tariff for the producers of electrical energy from RER was fixed in EUR at a rather high level. Considering new tariffs for energy realization, the projects’ payback period on WPS construction in Ukraine has decreased to an average world level – 5-7 years. Main advantages of wind energy to traditional power plants:  resources of wind energy are inexhaustible;  its usage is ecologically clean and safe (no discharge of carbon dioxide and other gases that cause greenhouse effect);  almost complete quiet operation;  WPS has no need of considerable land amortization;  relatively short terms of putting into operation. Despite a fairly new and advanced form of electricity generation, WPS can be put into operation and connected to the grid in a shorter time and at lower cost compared with the introduction of large thermal and hydropower plants, which require a complex infrastructure upon the production and transmission of electricity;  scale use of wind energy strengthens the energy security of any state (especially it is important for Ukraine);  the fact of wind energy development and use – is a sign of success of the owner and the state. The most favourable territories in our country in terms of wind power usage are the Crimea, Carpathians (Lviv, Ivano-Frankivsk, Zakarpattya, Chernivtsy regions), coast of the Black and Azov seas (Odesa, Mykolaiv, Kherson, Zaporizhzhya and Donetsk regions), and also Lugansk region. Several major domestic and foreign groups have announced the beginning of project implementation of wind power stations with total capacity about 2 ths MW. BENEFITS OF INVESTING IN "GREEN" INDUSTRY OF UKRAINE  favorable climate conditions for use of wind, solar and small hydro energy, powerful raw material base for production of biofuel;  state support:  the total volume of produced electric power by renewable sources is bought out by the Wholesale Energy Market (state organization);  the tariff for purchase of electric energy («green» tariff) is fixed by law, is at top-level and profitable for almost all RER;  the «green» tariff is fixed in EUR. Thus, changes of national currency will not advert to investor’s proceeds and possible depreciation will even increase the owner’s profit;  in places of potential construction of alternative energy sources systems the electricity networks are developed very well that reduce capital costs for infrastructure. Asset Management Company “NIKO” | Illinsky Business Center, 8 Illinska Str., Entrance 11, Kyiv, 04070, Ukraine Т: +38 (044) 200 2122, F: +38 (044) 200 2123 | e-mail: amc@niko.ua | website: www.amc.niko.ua

Country: UKRAINE Sector: GREEN ENERGY Type of project: START-UP Date: JUNE 2011 CONTENTS OF THE INVESTMENT MEMORANDUM 3 Summary Market 5 World market of alternative energy 7 Usage potential of alternative energy sources in Ukraine 9 Wind power potential of Ukraine 10 Benefits of investing in "green" industry of Ukraine Chernivtsy region 11 Region climate conditions 11 Wind structure 12 Energy infrastructure of Chernivtsy region Project 13 General information about the project 14 Description of sites for placement of WPP 17 Operational plan 18 SWOT-analysis 19 Project schedule 20 Wind speed measurement 23 Selection of the wind turbine model 26 Production plan 27 Tariff policy Financials 28 Project expenses 29 Profit and loss account 30 Electricity cost of sales 31 Financial performance of the project 32 Net Cash-flows 33 Cash-flows, breakeven point 34 Abbreviations, definitions 35 Appendices Asset Management Company “NIKO” | Illinsky Business Center, 8 Illinska Str., Entrance 11, Kyiv, 04070, Ukraine Т: +38 (044) 200 2122, F: +38 (044) 200 2123 | e-mail: amc@niko.ua | website: www.amc.niko.ua

Country: UKRAINE Sector: GREEN ENERGY Type of project: START-UP Date: JUNE 2011 ABOUT THE COMPANY ASSET MANAGEMENT COMPANY “NIKO” is the investment company, a member of the international “NIKO” Group of companies. The main Companys activity priority is the development of global strategy and selection of the individual instruments for each client: the formation of investment portfolio based on the clients requirements, operational management of the investment targets, share and debt capital raising, M&A, the development of new investment projects and their implementation. The main Companys mission is to not only provide a full-range of wealth management services based on the total confidentiality but to guarantee the flexibility and formation of financial model which matches all clients needs and expectations. AMC “NIKO” areas of expertise among others include: І) Investment Banking (fund raising, M&A); ІІ) Alternative Investments (direct and venture investments, corporate treasury); ІІІ) Asset Management (for private investors and corporate clients). Established in 2006, the Company currently manages more than UAH 440 million in assets. The Companys activity is regulated by the State Commission on Securities and Stock Market of Ukraine (licence AB №456907 dated 05.02.2009). RISK DISCLOSURES Trading foreign exchange, commodities, and securities, as well as investing in different kinds of projects carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange or investing in projects you should carefully consider your monetary objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your deposited funds and therefore you should not speculate with capital that you cannot afford to lose. You may be liable for losses that exceed the amount of margin that you post. You should be aware of all the risks associated with foreign exchange, commodities, securities trading, investing in projects and seek advice from an independent advisor if you have any doubts. Past performance is not necessarily indicative of future results. Material in this report does not constitute investment advice or a recommendation. LLC “ASSET MANAGEMENT COMPANY “NIKO” and its affiliates assume no responsibility for errors, inaccuracies or omissions in these materials. They do not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. LLC “ASSET MANAGEMENT COMPANY “NIKO” and its affiliates shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. This email is not a solicitation to buy or sell currency or to invest in projects. All information contained in this e-mail is strictly confidential and is only intended for use by the recipient. Asset Management Company “NIKO” | Illinsky Business Center, 8 Illinska Str., Entrance 11, Kyiv, 04070, Ukraine Т: +38 (044) 200 2122, F: +38 (044) 200 2123 | e-mail: amc@niko.ua | website: www.amc.niko.ua

CONSTRUCTION OF THE WIND POWER STATION WITH A CAPACITY OF 500 MW

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