S.C. Complexul Energetic Turceni S.A.

Development Strategies Department

FGD-PM1U

DESCRIPTION SHEET

"Turceni Thermal Power Plant Pollution Abatement Project"

1. General Information

S.C. Complexul Energetic Turceni S.A.

1.1. Field of Activity:

> Generation of lignite-based electricity and heating energy

> Extraction and preparation of lignite

1.2. Associations with other companies or participations in joint companies: -

1.3. Shareholding's Structure:

> 74.63 % Ministry of Economy;

> 24.79 % Fondul Proprietatea;

> 0.58% Termoelectrica.

1.4. Incorporation Date: 01.04.2004

2. Relevant Economic Data:

2.1. Equity Capital: 458,031,141.89 lei (subscribed and paid-in).

2.2. Turnover: 1.125.501.865.2 lei (31.12.2009).

2.3. Generating Capacities and Use Rate:

> Power Unit No. 1: 330 MW/h-use rate - 15.4 %;

> Power Unit No. 2: 330 MW/h - use rate - 0.0%;

> Power Unit No. 3: 330 MW/h - use rate - 44.0 %;

> Power Unit No. 4: 330 MW/h - use rate - 63.5 %;

> Power Unit No. 5: 330 MW/h - use rate- 65.9 %;

> Power Unit No. 6: 330 MW/h - use rate - 0.0%;

> Power Unit No. 7: 330 MW/h - use rate - 35.9 %;

Total 2,310 MW/h - use rate - 45.1 %;

2.4. Number of Employees: 4.495

3. Markets (domestic, external):

> Beneficiaries within the country - transactions on the domestic market only.

4. Provisions with raw materials and products:

> Domestic market (materials).

5. Recognitions from International Financing Organisations:

> E.B.R.D.

> KfW-Germany

> E.l.B.

> J.I.C.A

6. Project Objective:

6.1. The objective of the Turceni Thermal Power Pollution Abatement Project is to erect 4

flue gas desulphurization units, which aim to reduce sulphur dioxide (SO2) emissions to less

than 200 mg/Nm3 resulted from fossil fuel combustion in power unit No. 3, 4, 5 and 6 withinS.C. Complexul Energetic Turceni S.A., Gorj County.

6.2. Requirement and opportunity of the investment:

Tn future, energy coal wi]l further have an important role on the energy resources

market, considering the potential of payable reserves, the trend to reduce unit costs and the

existing infrastructure. Therefore it is foreseen to attract investments in order to reduce

pollutant emissions from power plants, for meeting the limits provided by the Romanian and

European Union legislation.

Chapter VI - "Restructuring of the energy production sector and operation of the

producers on (he market", of the "Road map of the Romanian energy sector" referring to

the period 2003 - 2015, issued by the Ministry of Economy and Trade, provides further

operation of power unit No. 3, 4, 5 and 6 of S.C. Complexul Energetic Turceni S.A.

The Turceni Thermal Power Pollution Abatement Project aims to implement 4 flue gas

desulphurization plants at power unit no.3, 4, 5and 6 in view of compliance with the

provisions of the Decision of Government No. 541/17.05.2003, which establishes actions to

limit emission of certain pollutants into the air resulted from large combustion plants in

accordance with Directive 2001 /80/EC.

6.3 Brief technical description of the Project

In the feasibility study is provided a wet type flue gas desulphurization plant, using as

absorbent limestone; as by-product ofthe desulphurization process resulting gypsum.

Flue gases, which are evacuated through the desulphurization plants directly into the

atmosphere, will be passed through an absorber and scrubbed by limestone slurry. Due to the

contact with limestone suspension, the flue gas sulphur content reacts being retained within a

new product, i.e. gypsum. Hereby, sulphur is no more released into the atmosphere, being also

eliminated the noxious effect on the environment.

There will be erected a desulphurization plant (absorber) for each of the 4 power units.

For the 4 desulphurization plants will be realized one common limestone slurry preparation

plant to all for power units. Evacuation of the by-product, gypsum, is made through a

dehydration unit, common to two absorbers.

6.4 Studies, documentations, analyses elaborated for the Pollution Abatement Project:

In order to study the modalities to comply with the legislative requirements, as well as

meeting the limits stipulated by the Romanian and European documents in the environment

protection area, there were issued studies which revealed the requirement of development and

implementation of the Project by erection of sulphur dioxide (SO2) pollution abatement

plants:

SAPROF study - issued by Tokyo Electric Power Services TEPSCO Japan (December2003)

Feasibility study - issued by ISPE Bucharest (May 2004)

6.5 Duration foreseen to accomplish the project:

The duration foreseen to accomplish the project is 2008 - 2013.

6.6. Participation of the Romanian party;

- provision of a part of financing, construction services and equipment installation, delivery of

utilities, manufacturing of a part of equipment.

6.7 Participation of the foreign party:

- provision of a part of financing, design, equipment delivery, engineering, consultancy.

7. Estimated value of the project:

The estimated value of the Project (General Estimate updated by prices valid on 30.04.2009);

Lei 1,079,676,325 (Euro 258,308,379) without VAT

Of which: C+M - Lei 263,621,616 (Euro 62,966,884)

On March 31, 2005 was signed Loan Agreement No. ROM-P4 between Romania and the

Japan Bank for International Cooperation (JBIC) in amount ofJPY 28,746,000,000 in view of

Turceni Thermal Power Pollution Abatement Project implementation - as external financing

source, following the difference to the total amount of investment to be born by own S.C.

Complexul Energetic Turceni S.A. sources.

8. Status of the Project

After Loan Agreement signing were covered the following steps:

- Law No. 257 for ratification of the Loan Agreement was promulgated by the

President of Romania by Decree No. 924 dated September 19, 2005 and published

in the Official Journal of Romania No. 890/ Oct. 5, 2005.

- The consultant selection process for the project was performed (Oct. 2005 - Apr.

2006), being finalized by employment in the Project of the consortium of firms

Tokyo Electric Power Services Co. Ltd (TEPSCO) Japan, Lahmeyer

International GmbH Germany and the Institute for Studies and Power

Engineering (1SPE) Bucharest.

- Following performance of the Two Step International Bidding Procedure for

General Contractor's selection was declared successful the firm AUSTRIAN

ENERGY & ENVIRONEMNT AG & Co KG.

At present are performed FGD plant construction and equipment erection works.

o Absorber Unit 4

Civil works are finalized; equipment erection works are ongoing, being

finalized in amount of65%

o Absorber Unit 5

Civil works are finalized; equipment erection works are ongoing, being

finalized in amount of 55%

o Absorber Unit 6

Civil works are finalized; equipment erection works are ongoing, being

finalized in amount of 10%

9. Conclusions regarding the Turceni Thermal Power Pollution Abatement Project

implementation efficiency

The investment is vital for ensuring further operation of the company. Also, the

Turceni Thermal Power Pollution Abatement Project aims to comply with the provisions of

the Decision of Government No. 541/17.05.2003, which establishes actions for limiting

emission of certain pollutants into the air, resulted from large combustion plants in

accordance with the Directive 2001/80/EC.

The importance of the project is outstanding considering the following arguments:

- Ensuring medium and long term operation of S.C. Complexul Energetic Turceni

S.A.

- Alignment with the national and European environment standards

Increasing of the Romanian energy sector competitiveness

Avoiding significant energy import

Assurance of work places having a positive impact on the area

Generation of new work places by horizontal development of new activities

connected to capitalization of the by-product resulted from the desulphurization

process.

General Manager

Laurentiu Octavian Graure