RIZVI, ISA, AFRIDI & ANGELLAhsan Zahir Rizvvi\1asood Khan AfridiA% la AhmedAresha MalikIlasnain Naq ee1 ousaf KhosaBilal Shaukat\adir AltafOmer SuumroMazhar Bangash

12 September 2011

AFRIDI & AAGELLDubai . Sharjah.

Abu DhabiAFRIDI & ANGELL

ShanghaiAFRII)I & ANGELL LLC

New York

LAWMEMBER

LEXMUNDI1.1 M`UMO 31UOi.c A3S000riOM W ^.M.1.0txl,.w nxMS

ADVOCATES & CORPORATE COUNSELLORS

68. Nazi, iddin RoadSects, F-814

IS LA MA It,AD44000

VAN (92 51 ) 11 I-LAWYER337Tel (92 51)28`-'427-30.2851

1-ax 192-1122850444

L-Mad islama: --ado riaalaH com

www.riaalaw.com

Syed Safeer Hussain

RegistrarNational Electric Power Regulatory AuthorityOPF Building, G-5/2, Islamabad

Dear Sir.

Tariff Petition filed by Yunus Energy Ltd. for 50 MW Wind Power Project atJhampir Area , Taluka & District Thatta, Sindh

While processing YEL's subject tariff petition, filed on 29 August 2011. NEPRA. videits letter No. NEPR/TRF-100/7869 dated 7 September 20 i I sought certain documents.which were provided to NEPRA on different dates and explained to its satisfaction.

More spc-:ifcally, it as explained that on 6 September 201 !, YEL had submitted itsduly signed tariff and generation license petitions ( the "Petitions "). On the 7September 201 1. YEL submitted to NEI'RA the signed pages of its EPC Contracts andO&M Agreements. The duty notarized Affidavits were also submitted to NEPRA on 8September 201 -

During your meeting with us, it was explained that the Company has attached with itsPetitions . AEDB ' s provisional acceptance of its feasibility study along with theverifications of AEDB ' s independent c onsultant ' Riso'. It was highlighted that thefinal acceptance of feasibility study and verification of independent consultants is stillawaited and will be communicated to NEPRA as soon it is made available to theCompany. It may be pertinent to mention that the instani petitions have been filed byYEL in accordance with the express requirements of AEDi3 letter # 1;/3/1/LEPLi08dated 24 March 2011 against the Bank Guarantee for USS 250,000 submitted byLucky Energy Private Limited ( Sponsor), cop) whereon ire provided to NEPRA. Thefeasibility study was required under the terms of LOI which was conducted andprepared by Wind Rose Consultancy (Pvt.) Limited and l .gurr Energy Limited UKwhich had to be later revised on account of modifications in the technology.

In response to NEPRA's requirement regarding the `Consent of Po''.er Purchaser to

Purchase I'o\%er' From the Company. EL submitted the c,--p^ of' its 'Offer Letter toCPPA of NTDC for sale of power' dated 8 Septerthci; 2011. YEL undertakes toprovide the same to NEPRA as it is made available toil. By way of clarification

however, it may be pertinent to highlight that pursuar:t to provisit,n 5.2.! of the

13-67, Mock 4 , (T ifton,Karachi 75600

PAN (92 21 (I 1I-LAWYEKrel. (92 21) ;i8o-i 108. 35ti ,-o308. 3587-2870

fay 40222113587-O0!4, 3O86-,1117

I -Mail k,uachi 4r naalatt cunt

54-II E I. Culber- 111,Lahore

UAN (0242) 111(el (02 4213 i7(,-4194, 3;70-419:-

Far I'12:21 1c76 o311rI -Mail 1a1111rc it ir.lalal\ 'om

I

1' n

RIZVI, ISA, AFRIDI & ANGELLPage 2

Policy for Development of Renewable Energy for Power Generation, 2006. (the

R.E. Policy"), it is mandatory for the power distribution utilities to buy all

electricity offered to them by renewable energy projects that are established inaccordance with the provisions given in 8.2.2 of the RE Policy 2006. Since YEL'sProject is in accordance with section 8.2.2 of the RE Policy, 8.2.1 is applicable to it.

In light of the aforesaid we would request the Authority to process the petition. Incase any further documents/clarification is required, please feel free to contact us.

Yours truly,

ik

RIZVI ISA AFRIDI & ANGELL

Enclosed: AEDB letter # B/3/1/LEPL/08 dated 24 Mardi 2011

Government of PakistanAlternative Energy Development Board (AEDB)

3, Street No. 8, F-8/3, IslamabadPh: 051-9262947-50 Fax: 051-9262977

No. B/3/1 /LEPL/08

Mr. Sohail TabbaChief Executive OfficerLucky Energy (Pvt.) Ltd.L-A, 21B, Block # 21, Federal B. AreaRashid Minhas RoadKarachi

AED13March 2011

Subject: Acknowledgement

We acknowledge receipt of your letter No . LEPUAEDB/11-L/2010, dated 121"March 2011 along with the Bank Guarantee of amount USD 250,000/- to achieve followingmilestones by August 31, 2011:

a) Sign / Award EPC Contract; provide evidence to AEDB in this regard.b) File tariff application to NEPRA; the application should be accepted by

NEPRA to process for tariff determination.

2. LOI and Agreement to Lease stand extended to this date

/lrff:Deputy Director (CDM

Copy to:

1. Secretary, Sindh Board of Investment, Government of Sindh, Karachi2. Secretary, Environment and Alternative Energy Department , Government of Sindh,

Karachi3. Deputy Secretary (Staff) to Chief Secretary Sindh, Karachi. for information of the

Chief Secretary, Sindh,4. Incharge AEDB Camp Office, Karachi5. PS to CEO, AEDB (for information)

29`x' August'201 1

Mr. Safeer Hussain Shah

Registrar

National Electric Power Regulatory Authority (NEPRA)

OPF Building , 2nd Floor , Shahrah -e-Jamhurriyat,

G-5/2, Islamabad

Dear Sir

Submission of the Tariff Petition of Yunus Energy Limited (the "Company") for 50 MW power

plant (the "Project ") at Jhimpir

r

Kindly accept the Company's Tariff Petition, along NNith such fee as determined by the National Electric

Power Regulatory Authority ("NEPRA" or the --Authority-). for kind consideration and favorable

approval by the Authority in accordance. inter alia, %sith section-31 of the Regulation of Generation.

Transmission and Distribution of Electric Poser Act, 1997 read %%ith Rule 3 of the NEPRA tariff

Standards and Procedure Rules, 1998 and other applicable provisions of NEPRA lax\.

This Petition is being submitted along with a duly e>ecuted copy of an affidavit attached to the Petition.

Yours sincerely, -:--A

For Yunp Energy Limited

P//Abdul Satta bdullahDirector Fina e & Company Secretary

j,. G /4e2 rYi^1CZh

._ . u

Friday, August 26, 201 1

VAKALATNAMA

I, Abdul Sattar Abdullah , Director Finance & Company Secretary of Yunus Energy Limited (the

"Company"), hereby appoint and constitute M/s MR. NADIR ALTAF, MR. WASEE-UL-HASNAIN

NAQVEE to appear and act for us as our advocates in connection with the processing, presentation of the

Company's Application for the Tariff Determination for the Company's proposed power project (the

"Petition ") with the National Electric Power Regulatory Authority ("NEPRA").

I also authorize the said Advocates or any one of them to do all acts and things necessary for the

processing , completion and finalization of the Petition with NEPRA.

ACCEPTEDRIZVI, ISA, AFRIDI & ANGELL

Nadir Altaf

Wasee -Ul-Hasnain

RIZVI, ISA, AFRIDI & ANGELLADVOCATES & CORPORATE COUNSELLORS68 NAZIMUDDIN ROAD, F-8/4,ISLAMABAD

UAN: I I I-LAWYER

For \Aunus Energy Limited

Abdul Sattar Abdullah

EXTRACT OF THE RESOLUTION PASSED BY THE BOARD OF DIRECTORS OF

YUNUS ENERGY LIMITED ON 25 AUGUST 2011 AT KARACHI

"RESOLVED THAT each of Mr. Sohail Tabba (Chief Executive Officer) or Mr. Abdul Sattar (Director

Finance & Company Secretary) are hereby authorized to file in person or through a duly appointed legal

council (i) an application for the grant of a generation license; (ii) an application for the determination

of generation tariff (including any review petitions); (iii) any documents in support thereof and/or to

make any oral/written representations on behalf of Yunus Energy Limited (YEL), before the National

Electric Power Regulatory Authority (NEPRA); and (iv) to engage a legal counsel to represent the

Company before the NEPRA in relation to the YEL's 50 MW wind power project at Jhimpir Area, Taluka &

District Thatta, Sindh, Pakistan; and to undertake any matter(s) necessary or incidental thereto."

Cer+'fled th2t the above p ;cd c i 25 August 2011 in Karachi at a meeting of the

Board of Directors of YEL at which a quorum of directors was present ; and (ii) has not been rescinded

and is in operation and that this is a true copy of the said resolution.

CERTIFIED TO BE TRUE COPY

1 /

Abdul Satta IbbdullahCompany Sec etary

Dated: 25 August 2011

nk AL Habib Limited

MACKINNONS BUILDING, 1.1 CIIUNDRIGAKiWAI)-KAKALIII,I'AKISIAN. - IUUI

-J U

ON DEMA^NDtPA11.f•.(il }t1C it6WER REGULATORY

I OFAU II IORITY,

PAKISTAN ! RUPEFiS FOUR }It1NDRED FORTY THOUSANDAMOUNT

ONLY.

TOBANK Al. IIAI3111 LIMITTiI) In Reimbursement Debit our A/CISLAMABAD')II-91 ItAZIA SI IARII I'LA/.A. IINNAI I AVE'MW Yourtti tii \Iti A.ISI.i\MAItAII. ISI.AMAt3AI).

v.\h1`IAN. • 11' 201.535611'0 23 100 0:

26 August 2011DateTHIS INSTRUMENT IS VALID FOR SIXMONTHS FROM DATE OF ISSUE.

DDH 2045356PKR 440,864.00

Amount

/10141709/2011/0396-62

DR[:I) SIXTY-FOURFor Bank AL Habib Limited

RIZVI, ISA, AFRIDI & ANGELLAhsan Zahir RizviMasood Khan AfridiAvila AhmedA^esha Malik

Hasnain Nagvee1'ousaf KhosaBilal ShaukatNadir AltafOmer SoomroAlazhar Bangash

8th September, 2011

AFRIDI & ANGELLDubai, Sharjah,

Abu Dhabi

AFRIDI & ANGELLShanghai

AFRIDI & ANGELL LLC

New York

"-;--ME 111[a

LEXMUNDIIM[ OOKY1 Wuitl uUC1AJ IN minMYIIT uw P11W

ADVOCATES & CORPORATE COUNSELLORS

8. Nazunudd:n RoadSector r-8/4

iSLAiNIAIS.-\D 44000

UAN: (92 51) 111-LAWYER

Tel: (92 51) 2852427-30, 2851337Fax: (92 51 ) 2850444

E-Mail: islamabad @ riaalaw.com

www.riaalaw.com

By Hand

RegistrarNational Electric Power Regulatory AuthorityOPF Building, Shahrah-e-Jamhuriat,G-5/2, Islamabad

Dear Sir,

Subject : Tariff Petition of Yunus Energy Limited (the "Company")MW. Wind Power Project at Jhampir

We write with reference to the documents submitted in respect of the subject

Tariff Petition. Along with the subject Tariff Petition we had previously submitted

affidavits that were objected to due to lack of proper notarization.

In this connection, appended .herewith are two notarized affidavits of the

Company Secretary , both dated 29.08.2011.

Sincerely,

Rizvi , Isa, Afridi & Angell

D-67, Block 4 , Clifton,

Karachi 756011

Tel: 9_22)).3 5,-- I"S. ;;53-0',(-8.

Fax (9221)',;S7-0014,3586-11:7L-Mal: karachi@riaalaw com

191-A, Cavalry Ground

Shami Road, Lahore Cantt.nnl 101 41 I I I _I-4U/VFR

Tel (9242)3662-0588 .3662-0599Fax (92 42) 3662-0577

E-Mail: lahore @ riaalaw.com

V

AKI STAN

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Value Rs .................. Attached ............3tamp Vendor 's Signature ....`^.17- If- !;....(NOT USE FOR FREE WILL & DIVORCE PURPOSE)

BEFORE THE NATIONAL ELECTRIC POWER REGULATORY AUTHORITY

I, Abdul Sattar Abdullah, Company Secretary, Yunus Energy Limited, hereby solemnly affirm

and declare that the contents of the accompanying Tariff Petition including all supporting

documents are true and correct to the best of my knowledge and belief and that nothing has been

concealed. I also affirm that all further documentation and information to be provided by me in

connection with the -,accompanying Petition shall be true to the best of my knowledge and belief.

Karachi dated 29th August'2011

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BEFORE THE NATIONAL ELECTRICPOWER REGULATORYAUTHORITY

AFFIDAVIT

I, Abdul Sattar Abdullah, Company Secretary of Yunus Energy Limited, being the duly authorizedrepresentative of Yunus Energy Limited, hereby solemnly affirm and declare that the contents of theaccompanying petition/application dated 29'h August'2011 including all supporting documents aretrue and correct to the best of my knowledge and belief and that nothing has been concealed.

I also affirm that all further documentation and information to be provided by me in connection withthe accompanying petition shall be true to the best of my knowledge and belief.

Karachi dated 29th August'201I

i:All Countries Out

Take Effect 1R'Notarized to

of Pakistan UnderInternational Law

r! i-.! a.:V U)iJ^JU ... r It

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Abdul Ariz. H;,ji Hashim Tabba Street , Karachi

"I .- : -4-197?t1" ?3 Fax: 92-021- 34382436

Mr. Safeer Hussain Shah

RegistrarNational Electric Power Regulatory Authority (NEPRA)

OPF Building , 2nd Floor , Shahrah-e-Jamhurriyat,

G-5/2, Islamabad

Dear Sir

Submission of the Tariff Petition of Yunus Energy Limited (the "Company") for 50 MW power

plant (the "Project") at Jhimpir

In continuation to our letter dated 29`h August'20I 1 regarding subject matter, we are pleased to enclose

herewith Original along with 2 copies of Tariff Petition duly signed, as desired by your good self.

Kindly acknowledge the same.

Yours sincerely,

for Yunus Eq(e}gy Limited

Abdul SattardrllahDirector Finance ompany Secretary

BEFORETHE NATIONAL ELECTRIC

POWER REGULATORY AUTHORITY

PETITION FOR TARIFF DETERMINATION

ON BEHALF OFYUNUS ENERGY LIMITED

IN RESPECT OF50MW WIND POWER PROJECT

JHAMPIR , NEAR KARACHI

Dated : August 29, 2011

Financial Advisors Leal ConsultantsHabib Bank Limited Rizvi , Isa, Afridi & AngellTel: (021) 3246 7357 Tel: (021, 042, 051) 111 -LAWYERFax: (021) 3243 5914 Fax: (051) 285-0444www.hbl.com www.riaalaw.com

I

TARIFF PETITION

50 MW WIND POWER PROJECT AT JHIMPIR, SINDH

PROJECT COMPANY:

PROJECT TECHNICAL CONSULTANT:

PROJECT FINANCIAL ADVISOR:

LEGAL COI!NSEL:

YUNUS ENERGY LIMITED

SGURR ENERGY LIMITED

HABIB BANK LIMITED

Rizv i, ISA, AFRIDI & ANGELL

2

0 1,! !

SECTION-1

EXECUTIVE SUMMARY

YUNUS ENERGY LIMITED

50MW WIND POWER PROJECTJHAMPIR, NEAR KARACHI

Legal Basis: This tariff petition (the "Petition") is filed by Yunus Energy

Limitedunder, inter alia, the National Electric Power RegulatoryAuthority ("NEPRA") Regulation of Generation, Transmission andDistribution of Electric Power Act (XL of) 1997 (the "NEPRAAct"), NEPRA (Tariff Standards and Procedure) Rules, 1998 (the"NEPRA Tariff Rules"), read with other applicable provisions ofNEPRA laws, the Government of Pakistan's Policy for Developmentof Renewable Energy for Power Generation, 2006 (the "Policy") andthe Government of Pakistan's Guideline for Determination of Tarifffor Wind Power Generation ( the "Guidelines").

Policy Incentives : This Project is being developed under the Policy. The Policy isdesigned to encourage investment and development of renewableprojects via attractive tariffs. The Policy, inter alia, offers thefollowing incentives to the Project and its sponsors:

Petitioner:

Tariffs calculated on a project-specific basis, designed to covercosts and provide a reasonable return on equity.Guaranteed access to market.Guaranteed evacuation of power.Removal of the need for planning. consent ( which has so oftenbeen the Achilles heel of wind energy projects).Facilities for direct sales contracts between generators 'andconsumers.Transfer of wind risk to the power purchaser.Incentives for power produced above benchmark levels,Sharing of carbon credit revenuesComprehensive security package.

There are further incentives for lenders to ensure that lenders'capital is exposed to minimal risk . The commitment of theGovernment of Pakistan to supporting private sector development ofrenewable energy projects is clear . The package of incentives andrisk cover in the short-term renewable energy policy presents anexcellent opportunity for private sector developers, as certainincentives have been retracted in the draft of the medium term policy,as disclosed by AEDB.

As required under the Section-24 of Act, Yunus Energy Limited("Petitioner" or "YEL" or the "Project Company") is an entityincorporated under the Companies Ordinance, 1984, to act as aspecial purpose vehicle (the "SPV") and develop a 50MW WindPower Project at DehKohistan, TalukaJhampir, District Thatta SindhProvince, Pakistan (the "Project").

3

The certificate of incorporation, it memorandum and articles ofassociations are appended herewith as Annex - A & B.

Rule 3(2)(a): Petitioner 's Address& Registered Office

Yunus Energy Limited7-A, Abdul Aziz Haji HashimTabba Street,Muhammad Ali Society, Karachi, 75350 Pakistan.

Petitioner Representatives

Mr. SohailTabbaChief Executive Officer

Rule 3 (2)(a): Generation License

The Petitioner is applying for the generation license together withthis Petition.

Rule 3 (2)(b): Grounds

The Petition encapsulates the grounds.

Rule 3 (2)(c): Relief Sought

The Petition encapsulates the relief sought from the esteemedAuthority.

Rule 3(2)(f): Summary of Evidence (Brief Particulars of Data, Facts &Evidence in Support of the Petition)

Submission:

The Petition is supported with the pertinent documents. Furtheradditional documents/evidence if required by the Authority shall besubmitted upon request.

As per terms ofthe NEPRA Rules , NEPRA Act, the Policy and theGuidelines , and on basis of compliance with the various conditions,YEL submits herewith a Petition for the kind consideration ofNEPRA, and for approval of the following:

(i) the Reference Generation Tariff;

(ii) the energy production estimates , the Benchmark EnergyTable and Monthly Complex Power Curves;

(iii) the Indexations and Adjustments;

(iv) Adjustments at commercial operations date; and

(v) other matters set out in this Petition,

4

SECTION-2

PROJECT SUMMARY

Project Company Yunus Energy Limited

LOI Com pany Lucky Energy (Pvt) Limited

Main Sponsors Yunus Brothers Group (-YB Group")Project Ca pacity 50.0 MWProject Location Jhimpir, District Thatta, Province of Sindh, Pakistan

Land Area 696 AcresConcession Period 20 years from Commercial Operation Date

Power Purchaser National Transmission and Despatch Company Limited ("NTDC")through Central Power Purchasing Agency

Wind Turbine Su her Nordex Singapore Equipment Private Limited (" Nordex")Wind Turbine Model N 100/2500 x 20 WTGs of 2.5 M W eachEPC and O&MContractor

Consortium of Nordex Singapore Equipment Private Limited, NordexSingapore Services Private Limited, Descon EngineeringLimited,Descon Integrated Private Limited and Descon FZE, UAEwith Nordex as the Lead Contractor

Benchmark EnergyGeneration Estimates

138.9 G Wh

Net Plant Ca paci ty Factor 31.71%Estimated Project Cost United States Dollar

Total EPC Cost including LCconfirmation charges

110,200,000

Non EPC Costs 1,906,00Project Development Cost 3,615,300Land rentals and Survey Cost ofAEDB for first Ten Years

349,243

Duties and Taxes 763,35Pre-COD Insurance 1,471,50Financial Charges 2,554,582'Interest During Construction 11,669,26Total Project Cost 132,529,255

Debt to Equity ratio 80:20

Debt 9,107,410,405PKR1 Fquity 2,276,852,605 PKR

Financing facility through Local long term sndicated project finance facilityLead Arrangers Habib Bank Limited ("HBL")

MCB Bank Limited ("MCB")United Bank Limited ("UBL")Allied Bank Limited ("ABL")Bank Al Habib Limited ("BAHL")Fa sal Bank Limited ("FB "

Terms of Long Term Currency istani RWetr-project Financing Loan Term 12

Grace Period U to 24 monthsRe at'ment Schedule 20 equal semi-annual installmentsInterest rate 6 months KIBOR + 3% per annum

5

(1 1.

Project Operation Cost United States Do llarYear Year Year Year1-2 3-5 6 - 10 11-20

O&M Cost 1,722,000 3,260,000 3,476,000 4,723,176Insurance 1,102,000 1,102,000 1,102,000 1,102,000Total O&M 2,824,000 4,362,000 4,578,000 5,825,176

Levelized Tariff (US¢ ]•]per kWh ) n ROE 3.51

• Debt Service Component 11.38n Levelized Tariff 18.14

Legal Counsel Rizvi, Isa, Afridi & AngellTechnical Advisor Sgurr Energy Limited, UKFinancial Advisor Habib Bank LimitedTax Consultant KPMG TaseerHadi& Co

Concession Documents • Energy Purchase Agreement with the Power Purchaser• Implementation Agreement with the Government of Pakistan

through AEDB.• Government of Pakistan Guarantee• Site Sub-Lease between the Project Company and AEDB as Sub-

Lessor;

Applicable GOP Policy Policy for Development of Renewable Energy for Power Generation2006

6

0 2,1 11

SECTION-3

MILESTONES ACHIEVED

ACTIVITYIssuance of LOI by AEDBProvisional allocation of land by AEDBAccess of Limited portion of land made possible

Appointment of technical consultants

Installation of Wind Mast and Instruments

Preliminary Geo-technical Survey

Topography SurveySubmission of Draft Feasibility ReportGrid Interconnection Study submitted to Power Purchaser

IEE Report submission to Sindh EPA

Approval decision in respect of the EIA Report received from

Sindh EPA

Submission of Revised Feasibility Report based on Siemens

Technology

Signing of Exclusivity Letter with Descon

Approval of Grid Interconnection Studies

Signing of Debt arrangement term sheetSigning of EPC and O&M Term SheetsSigning of EPC and O&M ContractsTariff Petition submission & Generation License Application

COMPLETION DATEMay 6, 2006

April 8, 2008October 2008

November 2008November 2008

March 2009March 2009

May 9, 2009May 15, 2009July 11, 2009

August 6, 2009

October 14,2009

August 10, 2010Feb 21, 2011

May 2011July 03, 2011

August 28, 2011August 29, 201 1

FUTURE MILESTONESReference Generation Tariff determination & Issuance Of Generation License by.NEPRASubmission of Performance Guarantee and Issuance Of Letter of Support By AEDBExecution of Site Sub LeaseExecution of Energy Purchase AgreementExecution of Implementation AgreementExecution of Financing Agreement with LendersAchievement of Financial Close and issuance of Notice to CommenceProject execution / constructionCommercial Operation DateAdjustment of Reference Generation Tariff by NEPRA

7

SECTION-4

KEY PROJECT STRENGTHS

The key strengths of the Project are proposed below:

a) Executed EPC and O&M Contracts with a global leader in wind technology and the

leading name in Pakistan in heavy engineering works

i. The Project Company has been able to execute its EPC and O&M Contracts with aconsortium of Nordex Singapore Equipment Private Limited and Descon EngineeringLimited (along with associated companies). This is a huge achievement in view of thesecurity situation in Pakistan. The Project Company had undergone discussions with theleading wind turbine manufacturers of the world including Nordex, General Electric,Siemens, Gamesaand Vestas. Based on the best commercial terms, technical soundnessand relevant experience in Pakistan, Project Company selected Nordex-Descon as theEPC Contractor and O&M Operator.

ii. Nordex SE is a German company based in Norderstedt, to the north of Hamburg. Nordexwas founded in Denmark in 1985 and has 20 years of experience in the WTGmanufacturing industry. Nordex SE is the management holding company that has 100%ownership of two subsidiaries, namely Nordex Energy GmbH and NPV Planung andVertrieb GmbH. Nordex SE will be providing an irrevocable, unconditional parentcompany guarantee, guaranteeing the full performance of the entire consortium of EPCContractors and their affiliates and associated companies.

iii. Nordex was the 1 1 th largest supplier of WTGs worldwide in 2009. Nordex has arelatively strong presence in the European market, being the number two supplier toPortugal in 2009 and the largest supplier to the French market in 2007 for the second yearrunning. Nordex supplies a range of WTG models to the market from 1.3MW to 2.5M W.

iv. Descon Company Introduction

Descon OverviewDescon is a multi-faceted engineering and manufacturing concern which has furtherspawned new entities with a diverse activities portfolio encompassing engineering,manufacturing, construction, operation & maintenance, software, chemicals, inspectionservices, trading and EPC contracts.

Resources

Today the company has a work force of exceeding 30,000 persons of 21 nationalitiesworking at various operations spread over the Middle East and Asia giving it a true multi-national flavor. The company is unique in its resource base with in-house capabilities forhandling all aspects of project development and implementation with downstreamservices after commissioning. These are applicable to a wide variety of projects related toindustrial plants, energy and infrastructure development projects for which services areprovided selectively or on EPC basis.

Operations & Clients

The company operations span Pakistan, the UAE, Saudi Arabia, Qatar, Kuwait. Jointventure partners and technology alliances are in place for acquisition of technology andspecialist expertise.

8

SystemsAll establishments operate on systems based on the frameworks of ISO, OHSAScertifications and ASME stamps. HSE achievements are reflected in the statistics withover 350 million man-hours of work executed in the core business of construction.Strong IT-based project management systems are a key factor in achieving successfulrealization of projects. Considerable investment is made in human resources area focusingon development of this vital asset.

Engineering & Project ManagementDescon has the capability of in house design. This was developed by joining hands withJGC Japan known as Descon Integrated Projects Private Limited JDL (formally known asJGC Descon Engineering Limited) was established. DIPL has the capacity of 900,000man - hours/years with team of 500 professionals. The company provides engineeringservices and project management services for all major oil & gas and petrochemicalprojects in the Middle East, Africa and Asia.

Today, Descon is well recognized as the industry leader and will become No. I windtower maker in Pakistan, not only because of its unmatched quality, but also because ofits services & customer support.

Descon in future would manufactured and delivered more than 80-100 sets of highquality wind towers to support all kinds of turbines, from 100KW to 3MW, manufacturedby major turbine producers including Nordex, Vestas, Gamesa, Suzlon, GE, Repower&Goldwind among others.

ConstructionOver the years DEL has established its reputation as the leading construction contractor ofPakistan. Participation in the construction of almost all major cement plants, setting up ofmajor gas plants, construction of largest Oil Refinery of Pakistan (PARCO), constructionof Dam and barrages are some glorious examples of Descon's modest achievements in thefield.

EPCCombining the wealth of experience in all facets of project development and execution,Descon has embarked on providing EPC solutions for projects. EPC synergizes thecapabilities within the group companies to undertake projects as a turnkey package. Thecurrent endeavor includes Wind Power Projects, Hydel Power Projects, Thermal PowerPlants, Fertilizer and Oil and Gas project.

MaintenanceDescon has contributed massively in the development of engineering sector in Pakistan.Descon has always been at the forefront for providing maintenance services particularlyfor Oil & Gas, Fertilizer, Chemical and Petrochemical industry. It has carried out plentifulTurnarounds / Shutdowns and Long Term Maintenance Services in Pakistan. Apart fromPakistan it has also successfully accomplished several maintenance jobs in Middle Eastadding an inimitable glory to Descon's already well reputed image.

Group Companies & New VenturesAnother group company which specializes in gas-processing plants is PressonDesconInternational Limited. This is a partnership between Descon Engineering andEnerflexPresson, Canada and has executed various gas plants projects on EPC basis withclients such as Petronas, MOL, Pakistan Petroleum Ltd, Oil & Gas DevelopmentCompany etc. Other group companies include Descon Information Systems for softwaredevelopment, Descon Chemicals for resins production and Descon Power Solutionsproviding Genet to Different size to various industrial sector, Rental Power and 0 & M

9

solution. Descon has also diversified in investments and DesconOxychem HydrogenPeroxide plant is one of the recent establishments. Other ventures in the offing includeownership and operation of a 450 MW thermal power plant.

Major Milestones

Company established 1977Acquired the Pak Arab Fertilizer Project 1978OlayanDescon formed; a JV with Olayan Saudi Arabia 1980Acquired the first major project i.e. NRL Lube Oil Refinery 1981Descon Manufacturing Works commissioned 1982Office established in Abu Dhabi 1982Acquired the first Gas Field project (an LPG Plant at POFL) 1983First project in cement sector acquired 1984Engro Fertilizer Relocation project acquired 1992First Contract in Qatar acquired 1999EPC Contract for Mirani Dam acquired 2000JGC Descon formed, a JV with JGC Japan 2000Fabrication shop established in Ruwais, Abu Dhabi 2001PressonDescon (PDIL)fonned, a JV with Presson Canada 2001Descon Engineering Qatar LLC established 2002Yanbu Workshop Commissioned 2002Hamriyah Manufacturing Works, Sharjah, commissioned 2005Ghayathi Shop established in Abu Dhabi 2006Rousch Power Plant and Altern Energy acquired by Descon 2006Karachi Manufacturing Works commissioned 2007First major EPC contract in UAE acquired 2007DesconOxychem commissioned 20081200 Tons crane added to equipment resource base 2009First EPC Project in Saudia Arabia 2010First EPC Project in Wind Sector Acquired 2010750 tons crane added to equipment resource base 2010

b) Definitive contracts

i. Lump sum, fixed price and date certain.

ii. Fuller scope of work, seamless transition between EPC and O&M phases. Nordex-Desconconsortium's obligations are backstopped by Nordex SE guarantee.

iii. Sufficient contractor security/performance warranties to ensure completion andperformance.

c) Improved Technology

i. N 100/2500 being the latest technology on offer - based on successful predecessorversions that have already been running around the world and featuring importantimprovements

ii. Better energy production.iii. Ability to work at full load upto 42°civ. . IEC Class IIA hence suitable to the sitev. European make

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d) One of the largest business groups as Sponsor

i. Proven track record of successful implication / execution of various industrial ventures inrecord time;

ii. Sound sponsor - One of the largest business houses with around USD 1.0 billion worthof assets and annual turnover of over USD 900 million;

iii. Unwavering commitment to the development of renewable energy sector in the country.

e) Executed financing term sheetYEL has been successfully able to attract commitment from the largest and the mostreputable banks of Pakistan for financing the debt component of the Project cost. Thesebanks are currently undergoing due diligence in order to finalize the terms of theirfinancing, however their in-principle commitment in the form of a term sheet is already inplace. The Sponsors have been able to lock in this commitment entirely from the localmarket, without tapping international avenues, based on the reputation they enjoy in thelocal banking sector along with attractive incentives on offer, like strong sponsorbacking/commitment, and significant progress in project development in terms ofexecution of firm EPC and O&M Contracts.

f) Strong Project Management TeamThe Project is being managed by an in house team of professionals, who deriveexperience of commissioning various projects of the YB Group.YEL has also employed a team of leading and most reputable foreign and local names toact as the consultants to-the Project Company for the development of the Project. Theteam of consultants brings with it knowledge of the global wind energy market andpractices, experience of transaction structuring, strong grasp of concessionary frameworkin Pakistan and transaction execution capability. Brief profiles of the same are providedbelow:

Rizvi Isa , Afridi. & Angell - Project's Legal Counsel

The firm, Rizvi, Isa, Afridi & Angell, was established in 1989 as Rizvi, Isa & Co. In2003, Rizvi, lsa & Co. merged with Afridi, Angell & Khan, thus creating Rizvi, Isa,Afridi& Angell. The merger brought together partners of a combined experience of morethan 150 years of corporate practice.

The-firm is among the largest and most reputed law firms in Pakistan. While offering itsclients the whole gamut of legal services, the firm has particular expertise in areas ofproject fnance, mergers and acquisitions, privatizations, power projects, oil and gasprojects, infrastructure projects, banking and finance, intellectual property, internationaltrade, anti-dumping, telecommunication, construction, mining and pharmaceuticalsectors.

The firm is recognized as the leading Project Finance law firm of Pakistan. Its partnershave been involved for more than 20 years in more than 90% of all project financetransactions undertaken in the private sector.

Spurr Energy Limited - Project's Technical Consultant

SgurrEnergy is a leading independent engineering consultancy specializing in worldwiderenewable energy projects. Their multi-disciplinary consultants have extensivesustainable energy experience worldwide and to date have assessed over 65,000MW ofrenewable energy development internationally.

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SgurrEnergy is one of a small number of internationally recognized advisors deliveringdue diligence services to project companies, banks and finance houses investing inonshore wind projects. YEL has engaged them primarily to benefit from their global windenergy experience, which aptly places them to advise the nascent yet budding windenergy market in Pakistan in all technical aspects of wind farm development.

Habib Bank Limited - Project' s Financial Advisor

Since its establishment in 1947, HBL has grown its branch network and become thelargest private sector bank with over 1,450 branches across the country and a customerbase exceeding five million relationships.HBL also has the largest Corporate Bankingportfolio in the country, and offers full-service Investment Banking capabilities to itsclientele. HBL's Project Finance practice revolves around the power sector. Prior to thepower policy of 2002, HBL actively pioneered Project Finance in Pakistan through thefunding of a gas-fired co-generation plant. Subsequent to the 2002 power policy, HBLcontinues to play a fervent role in the sector and was the Lead Advisor to most of thethermal IPP transactions that achieved financial close and have now successfully achievedcommercial operations.

HBL has also developed in-house project financing and financial advisory expertise forthe power sector, leading to the achievement of financial close of the first wind poweredIPP in Pakistan - HBL acted as Joint Lead Advisor to FFC Energy Limited. In additionto YEL, HBL is acting as Financial Advisor / Lead Arranger for a select group ofupcoming power projects like TGL Wind and Star Hydro Power Limited. HBL has beenselected to provide support to YEL on all financial matters including transactionstructuring, financial modeling, tariff application, conducting negotiations with projectpartners and liaison with debt arrangers, so as to arrange feasible and sustainable financialsolutions for the Project.

12

SECT ION-5

SPONSOR'S PROFILE & INITIAL STEPS TOWARDS PROJECT DEVELOPMENT

THE SPONSORS - YUNUS BROTHERS GROUP

The Petitioner is a part of the Yunus Brothers Group of Companies (the "YB Group").

In 2006, YB Group, being the sponsors of Yunus Energy Limited, became desirous of utilizing itsexperience in the power sector to ease power shortage being presently faced in Pakistan by providinghigh-quality, low-cost electricity by establishing a wind energy project in the province of Sindh,Pakistan. Accordingly, YB Group through its subsidiary Lucky Energy Limited ( the "Sponsors")obtained an LOI from Alternative Energy Development Board of Pakistan (the "AEDB") for a 50MWwind farm in Sindh.

YB Group currently consists of nine companies. Besides playing a leading role in textiles, YB Groupis one the most prestigious and progressive business houses of Pakistan with diversified activities. Itowns the largest cement manufacturing plant in the country with current production capacity of7.75mm tons per annum. Other businesses include international commodities trading, manufacturingand exports of a wide variety and range of textile goods, power generation and export, with an annualturnover over and above US$ 900mm. YB Group has always strived hard to be the champions ofexports and the leading exporter of textile products and cement from Pakistan. The YB Group isamong the top exporters of the country with unmatched expertise in textile and cement trade. Textilesactivities include diverse aspects of textile manufacturing consisting of spinning, weaving, knitting,processing, finishing and stitching..

Besides the Project Company, the YB Group also includes the following entities:

Yunus BrothersLucky Textile MillsFazal Textile Mills Ltd. (FTML)Gadoon Textile Mills Limited (GTML)Lucky Cement LimitedLucky Energy (Pvt) LimitedYunus Textile Mills LimitedLucky Knits (Pvt) Limited -Lucky Paragon Ready Mix Limited

The proposed shareholding of the Sponsor and other companies of YB Group in the Project Companyshall be as follows:

Lucky Cement Limited 35%Gadoon Textile Mills Limited 20%Lucky Energy (Private) Limited 15%Yunus Textile Mills Limited 15%Lucky Textile Mills Limited 15%

YB Group also actively participates in social development through a number of foundations andcharitable trusts by using financial resources of group companies. Some of the most prominentfoundations and trusts sponsored by YB Group are:

Fellowship Fund for Pakistan - a charitable trust formed to provide opportunities to thecountry s highest quality thinkers.Aziz Tabba Foundation - responsible for community welfare projects.

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- Aziz Tabba Dialysis Centre - provides free of cost treatment to the underprivileged.- Tabba Heart Institute - operates a 120-bed state of the art cardiac treatment facility, the most

modem hospital in Pakistan in terms of infrastructure and equipment.

YB Group 's experience in Power Generation

Lucky Energy Private Limited (''LEPL") is a licensee of NEPRA for operation as small powerproducer ("SPP"). LEPL was established to cater for the internal power requirement of groupcompanies, particularly Fazal Textile Mills Limited, Lucky Knits (Pvt) Limited and Lucky TextileMills. Many companies of the YB Group now have self-generation capabilities to meet their energydemands shown as below:

Self-generation Capacity of YB Group

Company Generation Capacity (MW)

Gadoon Textile Mills Ltd. 45.25

Lucky Cement Ltd. Karachi 90.00

Lucky Cement Ltd. NWFP 70.80

Yunus Textile Mills Limited 9.50

Lucky Textile Mills Limited 4.00

Lucky Energy (Pvt) Ltd 17.00

Group 's Total Generation Capacity 236.55

It is worth mentioning that out of the total energy generation capacity of Lucky Cement Limited, 25 MWof electricity is being generated from Waste Heat Recovery System.

Sale of Electricity to National Grid

Currently, a cumulative of 35 MW of electricity, produced by the captive power plants of YB Group, isbeing supplied to National Grid / Karachi Electric Supply Corporation ("KESC"). The break-up of theelectricity supplied to National Grid is as under:

Gadoon Textile Mills Limited 10 M WLucky Cement Ltd. Karachi 15 MWLucky Cement Ltd. NWFP 10 MW

YB Group is on the move to further upgrade and enhance its existing power generation capacityand is simultaneously initiating a diversification plan to explore new avenues for commercial supplyof electricity to the National Grid by making best use of (i) hydel resources in the north of Pakistanand (ii) wind energy in wind corridor of Sindh Province of Pakistan.

All pre-equipment selection surveys and relevant formalities are underway for a 215 MW run-of-the-river hydel power project to be constructed at Asrit-Kedam at River Swat in Pakistan.

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SECTION-6

STEPS TOWARDS PROJECT DEVELOPMENT

Project Company

Yunus Energy Limited, is a newly incorporated public limited unlisted company, fully owned bythe YB Group, and is registered under the Companies Ordinance 1984. YEL is in the process ofdeveloping a 50 MW wind farm at a proposed site located in Jhimpir, District Thatta, province ofSindh, on a Build Own and Operate ("BOO") basis ("the Project"). The construction of the windfarm will take approximately 16 months from the issuance of notice to commence to the projectcontractors, so that plant commissioning is expected in the end of October, 2013.

Issuance of "Letter of Intent" by AEDB

On 6`h May 2006 the original sponsor of the Project i.e. Lucky Energy Limited obtained a Letter ofInterest ("First LOl') from AEDB for the development of a 50MW wind farm situated in the vicinityof Sindh province, southern Pakistan. A copy of the First LOI is attached hereto at Annex - C.

Subsequently, however, the YB Group arranged for the incorporation of a special purpose vehicle bythe name of Yunus Energy Limited on May I t'h, 2011, for the purpose of constructing,commissioning, and operating the Project. Accordingly, the Sponsor informed the AEDB that inorder to develop the Project, YB Group considers it expedient to develop the Project through YunusEnergy Limited. Acknowledgement copy from AEDB through Letter # B/3/l/LEPL/08 dated 21"July'201 1 is attached as Annex - D.

Project Site

The site is located approximately 80kmeast of Karachi atDehKohistan,TalukaJhampir, District Thatta SindhProvince, Pakistan ( the "Site").

On 12 March 2008, the Petitioner executedthe `Agreement to Lease' the Site, withAEDB. The Site includes 696 acres ofland. Pursuant to the aforesaid, on 8 April2008 vide AEDB letter no.B/3/12/2008/khi the Petitioner took overthe physical possession of the. land fromAEDB (the "Handing & Taking Over ofthe Land"). Copies of Agreement to Lease and Handingherewith as Annex- EandF , hereto.

Figure 1 Project Location

Figure 2 Project Site

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Submission and Approval of the Feasibility Study

On May 091h 2009, the Sponsor submitted draft feasibility to the AEDB for its review and approvalwhich was revised subsequently on 14" Oct'2009.In compliance with the requirements of the Policyand the LOI, the Project Company has completed the final feasibility study (the "FeasibilityStudy")on the basis of selected turbine of Nordex N100/2500for the Project.

The production estimates calculated by the Petitioner based on SgurrEnergy's reports, whichconstitute integr Lpart"o t e ro t Feasibility Study, were independently verified by AEDB throughM/s Risoe,., ° EDB's lett # B/3/l/LEPL/08 dated 1 July 2011, confirming the productionestimat , f 138.9 GWh (Nooriabad PMD Mast Data using 20 x Nordex N100 WTGs areappend herew' nex - thereto.

Power Purchaser

The entire power generated by the Project will be sold to National Transmission and DespatchCompany (the "Power Purchaser") for the term of 20 years starting from the CommercialOperations Date.

The 20 year tariff concession period is in line with the design life of the wind turbines, as they aredesigned to have a very low probability of failure within. 20 years. Although, the wind turbinesmay have an even longer life span but factors such as turbine quality, local climatic conditionsimpact on the expected life of the assets.

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SECTION-7

KEY PROJECT CONSIDERATIONS

1. RATIONALE FOR WIND POWER

a. Pakistan ' s Current Electric Power Shortage

The electricity consumption in the country during 2009-2010 has increased by 5.65% to74,348GWh as compared to 70,371GWh for the same period the year before. The electricitydemand in the country is projected to grow at a growth rate of 7.5% during the period 2011-15, and increase from 23,563 MW in 2011 to 31,299 MW in 2011 - 2015. This growth hasbeen projected on the basis of increase both in population and per capita income and thelinkage between the increasing population, per capita income and electricity consumption.

Pakistan as a whole is an energy-deficient country and per capita electricity generation has

traditionally been low (581 K Wh as against the World average of 2,657 K Why).

b. Pakistan 's Power Generation Mix & Fossil Fuel Reliance

Power is provided through conventional and non-conventional sources, which is the main

asset needed for any development activity within the country. Conventional thermal plants,

those that use oil, natural gas and coal, contribute to 67.3% of Pakistan's power generation

capacity, followed by hydro power generation, which is contributing up to 29.4% of

Pakistan's power generation capacity and lastly, nuclear power generation forming up to 3.3%

of the country's power generation mix.

As for Pakistan's dependence on such fossil fuels, the overall energy requirement of thecountry is expected to increase to about by 48% to 80 million tons of oils equivalents in 2011.

The serious threat of rising prices to Pakistan was evidenced during 2008-2009 when the

prices of oil equivalents sky rocketed globally - leaving the country's economy in distress.

If Pakistan is to develop at a faster pace to attain a seven to eight per cent GDP growth, then itis imperative to address its energy needs. Pakistan is currently short by between 3,500 to5,000 MW whereby the shortage is likely to be around 20,000 MW within 10 years.

The demand for oil is highly dependent on global macroeconomic conditions. According to

the International Energy Agency, high oil prices generally have a large negative impact on the

global economic growth. Such volatile prices adversely affect economies of developing

countries like Pakistan and will continue to do so if alternate resources are not harnessed for

development of renewable energy.

In order to circumvent power shortfalls resulting from the volatility of fossil fuel availabilityand prices, solutions need to be sought from local energy resources like domestic coal andrenewable energy resources such as hide, wind and solar. All of these options could assist inreducing Pakistan's reliance on imported fuel, and consequent vulnerability to changes inglobal oil prices.

Source: Medium Term Development Framework 2005-10, Government of Pakistan, 2005

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c. Wind is a global power source - A case in point

From an emerging fuel source twenty years ago, wind energy has mushroomed into a mature

and booming global business. Generation costs have fallen dramatically over the last 15 years,

moving closer to the cost of conventional energy sources. Modem wind turbines have

improved dramatically in their power rating, efficiency and reliability. There is huge and

growing global demand for emissions-free wind power, which can be installed quickly,

virtually everywhere in the world.

Over the past ten years, global wind power capacity has continued to grow at an average

cumulative rate of over 30%, and 2008 was another record year with more than 27 G W of

new installations , bringing the total up to over 120 G W. The United States passed Germany to

become the number one market in wind power, and China's total capacity doubled fpr the

fourth year in a row.

Wind energy is the only power generation technology that can deliver the necessary cuts in

C02 in the critical period up to 2020, when. greenhouse cases must peak and begin to decline

to avoid dangerous climate change. The 120.8 GW of global wind capacity will produce 260

TWh and save 158 million tons of C02 every year. Wind power continues to lead the

renewable electricity sector, with more new capacity installed in 2010 than for any other

technology.. Equally important to note is that in 2010 for the first time, more wind power was

added in developing countries and emerging markets than in the industrialized world2

Some industrialized nations' wind power industry already see a spinoff from the nuclear

tragedy in Japan (at Fukushima Dai-ichi nuclear power station) which has cast doubt about

nuclear power and raised questions about potentially harmful generation. Demand for windturbines in Germany increased in the first half of the year 2011 after the government decided

to phase out the nuclear plants which provide 23 percent of the country's generating capacity.

German Chancellor Angela Merkel shut down eight of the country's nuclear reactors in

March, 2011 after the accident at the Fukushima reactor in Japan stoked safety concerns in

Europe's largest power market and as Germany decided to exit from nuclear energy by 2022'.

d. Wind Power in Pakistan

In order for a sustainable future for Pakistan with regards to energy, it is necessary that theenergy sector be accorded with high priority. It is considered that wind power generationcould become an important supplier to Pakistan 's electricity demand in the future. Thedevelopment of wind generation projects supports the objectives of the Government ofPakistan by:

(a) diminish reliance on fossil fuels for thermal power generation;

(b) broadening the variety in Pakistan's electricity generation mix;

(c) decreasing greenhouse gas emissions by prevention of thermal power generation; and(d) facilitating in the declination of the excessive trade deficit,

2Global Wind Energy Council - http:/hvww .gwec . net/index .php?id=l3

3German wind-turbine demand rises as Merkel plans nuclear exit , July 28h, 2011, By Bloomberg

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Furthermore, in the current environment of increasing dependence on imported crude oil, the

benefit of Renewable Energy technology in saving foreign exchange by displacing foreign

currency inputs is being highlighted.

The wind power generation program in Pakistan was initiated around five years ago by

installation of wind measuring stations in the coastal areas of Sindh, Pakistan. The energypotential of 346,000 MW in the country is estimated by National Renewable Energy

Laboratory, USA and only the Gharo - KetiBander - Hyderabad wind corridor (the Wind

Corridor) has a potential of 43,000 MW of wind power generation. If harnessed adequately,

wind energy alone would eradicate energy shortages in the country. The Government of

Pakistan is currently looking to build wind farms in the Wind Corridor, some of which are

regions where electricity supply through the national grid has been a challenge.

The Government of Pakistan has clearly articulated its support for the development of

renewable energies. Due to the fact that the use of wind energy is one of the most economical

and efficient renewable energy production technique, the focus is on supporting thedevelopment of wind farms through wind based independent power producers (the Wind

IPPs).

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():;

SECTION-8

SELECTION OF TECHNOLOGY & CONTRACTORS

Selection of Technology / WTGs

Forthe development of the Project, the Petitioner contacted following leading WTG

manufacturers . The following classifications 3f the WTGs were considered:

GE1.5xle - IEC Class 11IB.Hyundai HQ1650 - IEC Class IIA.Nordex S77 1.5M W - IEC Class IIA.Siemens SWT2.3-101 - IEC Class 11B.Vestas V90-1.8MW - IEC Class IIA.Nordex N100 2.5 MW -IEC Class [IA.

For the five suppliers and the selected WTG models, detailed assessment was then carried

out of:

Manufacturing capability.WTG and drive train components.Power curve and fleet availability.Grid code compliance.Known operational issues.Type certification status.WTG spacing.Suitability to the project environment.Annual energy output.

The Petitioner's 85m site mast was erected in November 2008. The dataset used to undertake

a wind regime assessment includes data from 27 November 2008 to 1 December 2009.

Based on the aforesaid analysis and assessment, it was concluded that Nordex N100 would

prove the most suitable equipment for the Project. The conclusion is based on a detail

comparison of the energy output for the different WTG types. One year wind data has been

used to undertake the Wind Regime assessment. The N-100 is considered to be suitable for

the Site with regard to the Wind regime.

Brief technical information regarding N100 WTG is given below.

Design

The Nordex N 100/2500 wind turbine is a speed-variable wind turbine with a rotor diameter of

99.8 m and a nominal power of 2500 kW. The wind turbine is offered in the variants 50 Hz

and 60 Hz.

The wind turbine is a further development of the sophisticated turbine family NordexN802500 and N902500.

Wind turbines are integrated in wind farms for economic and technical reasons and operatedas a unit. In addition, met masts and a substation are often part of a wind farm. Depending onthe topology of the area, a wind farm layout is created that aims achieve minimuminvestments, maximum yield and minimized loads caused by turbulences.

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Climatic design data

The tower, nacelle, and rotor blades are certified according to national and international

standards for wind turbines.

Ambient temperatures Standard:

Survival : -20 °C...+50 °C

Nominal power : -10 °C...+42 °C

De-rating 42 °C....45 °C

Stop 45 °C, restart at 43 °C

Stop: -10 °C, restart at -8 °C

Pitch system

For each single rotor blade, the pitch system comprises an electromagnetic drive with three

phase motor, planetary gearbox and drive pinion as well as a control unit with frequencyconverter and emergency power supply. The pitch system controls the angles of the rotor

blades. It can rotate the rotor blades around their longitudinal axes. These blade angles are

optimized during operation so that energy is taken from the wind in the most efficient way

and then transferred into rotational movement.

Gearbox

The gearbox speed is increased until it reaches the speed required for the generator. There are

two approved gearbox types, one of which is a multi-stage planetary gearbox with a one-stage

spur gear and the other a differential gear unit. The gearbox is cooled through an oil/ air

cooling circuit with stepped cooling capacity. The bearings and gearings are continuouslylubricated with cooled oil. The gear oil used for lubrication also serves as a gearbox cooling.

The temperatures of the gearbox bearings and the oil are continually monitored.

Generator

The generator is a double-fed asynchronous machine. The generator is kept in its optimumtemperature range by a cooling circuit. The generator is cooled by a coolant.

Yawing (yaw system)

The wind direction is continually monitored by two separate sensors at hub height. One ofthese sensors is an ultrasonic anemometer . All wind measuring instruments are heated.

Upon exceeding a permissible deviation (limit value) from the wind direction, the nacelle is

actively yawed. Yawing is effected by four yaw drives. The yaw drives are located on the

machine frame of the nacelle. A yaw drives consist of electric motor, multi-stage planetary

gearbox and drive pinion. The drive pinions mesh with the outside gearing of the yawbearing.

Lightning protection

During the development of the wind turbine, the utmost attention has been devoted tolightning protection. For all components, a most reliable protection has been achieved. The

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lightning and overvoltage protection of the wind turbine is based on the lightning protection

zone concept and meets the EN 62305 standard.

EPC Arrangement

Following intense negotiations between the parties for the development of contractual

documents for the provision of a EPC arrangement for the Project, definitive and legallybinding agreements (" the EPC Contracts -EPCC") were executed between the parties thatincluded:

• an agreement for "engineering, procurement and supply of offshore equipment" datedAugust 28, 2011 and entered between the Project Company and consortium of NordexSingapore Equipment Private Limited and Descon Engineering FZE, UAE (the OffshoreAgreement); and

• an agreement for "engineering, procurement and supply of certain equipment,construction, erection & installment, commissioning, testing and provision of certainonshore services" dated August 28, 2011 and entered between the Project Company andconsortium of Nordex Singapore Service Private Limited, Descon Engineering Limitedand Descon Integrated Projects Private Limited ( the Onshore Agreement).

Under the EPCC, the EPC Contractor shall install twenty (20) N100 2,500 kW HCV wind

turbine generators at a hub height of 80 meters and twenty (20) 3x49m blades (forming arotor of 100 meters in diameter) (all together, the "WTGs").

It is highlighted, as one of the key strengths of the Project, that the EPCC is based on a

firm EPC price and confirmed time for completion failing which the EPC Contractors will

he liable to compensate (through liquidated damages) the Project Company for all itslosses incurred due to the delay.

For the sake of brevity, the EPCC executed between the Project Company and the EPCContractor is appended herewith as Annex - Hhereto, which constitutes and may be read asthe integral part of this Petition.

Operating and Maintenance Arrangements

Operation and management philosophy for the Project is to maximize safety, maintain high

efficiency and minimize costs in that order. For the operations and maintenance of the

Complex the Project Company has executed the "O&M Contract" with Nordex Singapore

Service Private Limited,Descon Engineering Limited and Descon Integrated Projects PrivateLimited (collectively, the "O&M Contractor"), appended herewith as Annex - I whichconstitutes integral part of this Petition.

O&M Contractor shall jointly and severally provide the operation and maintenance services tothe Project Company for the period of ten years as follows:

(a) in case of first two years of operations (warranty period) pursuant to an arrangemententered into between the Project Company and O&M Contractor (the 2 Year O&MAgreement); and

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(b) in case of next eight years of operations (i.e. Year 3 to Year 10 Post COD), pursuant

to a separate agreement entered into between the Project Company and O&MContractor dated August 28, 2011 (the 8 Year O&M Agreement); and

This arrangement is specially designed to provide the necessary comfort to the potential

lenders of the Project Company, which are offering term loan to the Project Company with a

repayment schedule extended to ten (10) years.

As per the O&M Contract, the O&M Contractor shall, inter alia, perform as per OEM O&M

manuals/SOPS, the works including the operation of the Complex, security of the Complex, tools

& tackles, residence camp and offices, services, labour, parts and consumables for scheduled &

unscheduled maintenance of WTGs and all its components (e.g. gear boxes, generator, yaw

motors etc.), complete electrical balance of plant including WTG step-up transformer, medium &

high voltage switch gear, collection & communication network, power transformers and other

components in sub-station, civil & mechanical balance of plant including towers, foundations,

buildings and roads, supply, transportation/shipment of defective parts etc.

Production Estimate Analysis

Based on N100/2500 turbines, Risoe has estimated an annual energy production of 138.9GWH on P50 after taking into consideration of terrain, topography and losses on account of

wake impact of neighboring wind farms and technical losses etc. The assessed energy is lower

as compared to the precedent wind farm, FFC Energy Limited (FFCEL). This is mainly due

to site location and topography. If we use same technology (i.e. Nordex S77), the energyfigure is even lower.

Please find below a comparison of Risoe'sestimate for Nordex S77 on YEL and FFCEL'ssites:

AEP in GWH comparison for the YEL and FFCEL Site - as certified by RisoeProject Site FFCEL YELSupplier Nordex NordexTechnology S 77 S 77P50 143.6 130.1

Therefore by using the N 100 technology, YEL has essentially cashed in on improved

technology to increase the energy yield beyond what S 77 would yield on the Project s;tc.

This can be demonstrated by the table below wherein the annual energy estimate, based onRisoe's certification, is depicted for both S 77 and N100 /2500.

AEP in GWH comparison for YEL Site - as certi fied by RisoeProject Site YEL YELSupplier Nordex NordexTechnology S77 N100 / 2500P 50 130 . 1 138.9P 70 118 .5 126.4P 90 101 .6 108.5

Risoe 'sestimates based on S 77 and N 100/2500 is appended herewith as Annex - J

24

SECTION-9

CONCESSIONARY FRAMEWORKINCENTIVES & ENVIRONMENTAL CONSIDERATIONS

Environment

The Petitioner carried out the initial environmental examination (lEE), which was submitted

to the Environmental Protection Agency (EPA), Government of Sindh on 11 July 2009.

Following review meeting on 6 August 2009, EPA Sindh accorded approval to the Project.

There is no significant environmental impact that would prevent or adversely affect the

construction of the Project.

Copy of EPA, Sindh's IEE approval is appended herewith as Annex- K

Wind Risk

The proposed tariff is designed keeping in view the fact that the wind risk is assumed bythe Power Purchaser. It is intended to provide protection to revenue in low wind months,by compensating the developer according to the revenue associated with a benchmarkoutput. Therefore, monthly payments shall be made for the benchmark energy produced bythe Project.

Further, bonus payments are also applied on any energy produced over and above the

benchmark energy. The standard EPA approved by the GOP provides for payment of bonus

energy on monthly basis. There is no differentiation in the Policy between the timing for

payments for monthly benchmark energy and bonus payments. NTDC has in recent

negotiations shifted the bonus payments towards the end of.the year on the argument that

"NEPRA's determination was silent on this issue". The Petitioner therefore prays that NEPRA

state explicitly in the tariff determination that bonus energy payments should also be made on

monthly basis as well.

Carbon Credits

As Pakistan is an eligible party under the UN Clean Development Mechanism (CDM) and its

qualifying projects may generate Certified Emission Reductions (CERs), which can then be

sold to help the buyers to comply with their emission reduction targets. Each CER is

equivalent to the prevention of one tonne of carbon dioxide emissions. However, this revenuesource cannot be predicted as it is uncertain whether the project will be accredited, what

period of time it will be accredited for, and what the value of the CERs will be, as this

fluctuates considerably. Certification may be for one, two or three accreditation periods of 7

years each. Potential revenue from Certified Emission Reductions (CERs) under the UN

Clean Development Mechanism is not included in determination of the tariff, however the

Petitioner plans to register for the same.

The section 8.3.3 of Policy allows the qualifying projects to register for CER credits with theCDM Executive Board. The CER revenues available shall be distributed in the followingmanner in accordance with the Policy:

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An upfront nominal deduction will be made for the administrative cost to join CER

mechanism.An amount NOT exceeding that required to bring the IPP's ROE to the level allowed byNEPRA shall be payable to power purchaser.The remaining revenues shall be divided in equal proportions between the 1PP (as a "greencredit" for enhancing financial returns accruing to the project's investors ) and the powerpurchaser (as a "green tariff' support for lowering the per unit price of clean RE power,thereby increasing its attractiveness and mitigating the increased cost for purchasers andconsumers).

26

() 0

SECTION-10

PROJECT FINANCIALS

Capital Structure

The capital structure of the Project is as follows:

Exchange Rate I US$ = PKR 85.90Equity US $ 26,505,851Total Debt US $ 106,023,404Total Project Cost US $ 132,529,255Debt Equity Ratio 80:20Euro / Dollar parity 1.40

Project Cost

The total Project Cost, expressed in United States Dollars, has been calculated after thoroughanalysis, evaluation and understanding of the dynamics that affect the development andoperation of a wind farm. The reference exchange rates used to convert the relevant costs intoUnited States Dollars are USD I = PKR 85.90

The breakup of the Project Cost is as follows:

Capex Item Capex Amount($'000)

A EPC Costs

Off-Shore Cost 89,806.425On-Shore Cost 19,193.575L/C Confirmation Charges 1,200.000

Total EPC Cost 110,200.000B Non EPC Costs 1,906.009C Project Development Cost 3,615.300D Land rentals and Survey.Cost of AEDB for first 349.243

ETen YearsDuties and Taxes 763.355

F Pre-COD Insurance 1,471.500G Financial Fees & Charges 2,554.582H Interest During Construction 11,669.266

Total Project Cost 132,529.255

A. EPC Costs Component

Details of the EPC Costs are provided in the EPCC appended with this Petition, which form theintegral part of this Petition. The contract has been signed on August 28,201 1 in Bangkok, Kingdomof Thailand. The contract is based on fixed and firm price.

As stated above , the EPC Cost includes:

a) the price being charged by the EPC Contractor for the Project and is based on the firm,legally binding, executed EPC Contract between the Project Company and the EPC

27

0 -t I

Contractor; and

b) the L/C confirmation charges to be incurred on the amounts payable to Nordex underthe Offshore Portion of EPCC.

The EPC Cost represents the cost of 20(twenty) N 100 WTGs, 3x49m blades (forming a rotor of99.8 meters in diameter), electrical equipment, together with ancillary equipment and other goods,systems and machinery and includes the cost of, inter alia, the erection, testing, completion andcommissioning of the equipment and construction of the Facility that is capable of fulfilling theintended purpose.

Breakup of EPC price in USD and Euro is as follows:

('000') ('000')Euro Component Dollar Component

Offshore 39,168.214 34,970.925Onshore - 19,193.575Total 39,168.214 54,164.5000Note: Euro cost has been converted into USD on euro / dollar parity of 1.40, wherever applicable inthis petition.

The requirement to have the L/C confirmed through an international bank has specificallybeen requested by Nordex taking into account the recent credit ratings assigned to Pakistan byStandard & Poor' s and Moody's.

It is highlighted, as a major strength of the Project's EPC Cost structure that the onshoreportion of the EPC Costis inclusive of all withholding taxes payable in respect of the payments tobe made to the EPC Contractor pursuant to the EPCC. Though it is exclusive of any customduties, import taxes etc.

B. Non EPC Cost Components

The Non EPC Cost includes the cost of items that are not part of the EPC Contractor's scopeof work pursuant to the executed EPCC. Such costs mainly include, inter alia, the costs of:

Non EPC Cost Amount ($'000)Fixed Assets 993.937Residential facility/Office Block/ Masjid 582.072Security for Expats 130.000Optic Fiber / Communication link with WAPDA 200.000Total Non EPC Cost 1,906,009

a) Fixed Assets:

This includes cost of various instruments, equipment and other assets (excluding suchassets that are supplied under EPC Contract) that include:

(i) Two wind measurement masts (instrumentation, recalibration, security, maintenanceand insurance), as required under the EPA;

(ii) Vehicles, equipment and furniture

(iii)Telecommunication equipment

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b) Residentialfacility/Office Block/Masjid:

This represents the cost of the residential facility, office block furniture and equipment, andMasjid to be constructed by the Project Company, in order to provide housing facilities to thepermanently residing O&M staff and officers. A fit for purpose residential facility has beenplanned which will accommodate necessary staff at Site , and will contain bare minimumfacilities for the residents . Since the Site is not too far from Karachi, the facility is not intendedto cater to the families of the operating staff.

c) Security for Expats:

Pakistan is going through a tough time with respect to the security situation in the country. TheProject Company is also concerned about the security of its personnel. Therefore, securityarrangement costs become one of the important components of the Project cost. This represents thecost associated with providing security at offices, accommodation and site. It is highlighted that inview of the present security situation in Pakistan, the provision of security by the Project Company isconsidered critical.

d) Optic Fiber/Communication link wit/r WAPDA:

In accordance with the requirements of the EPA, the Project Company is required to provideconnectivity to the Power Purchaser through fiber optic. The total deployment cost (includingequipment, materials; and lying of the fiber optic) has been included under this head. Thiscommunication link is essential as the Project Company is bound to transmit wind speed and poweroutput data to the Power Purchaser for record of data in line with EPA requirement.

C. Project Development Cost

The Project Development Cost includes the costs incurred for the purpose of Project development andincludes all costs, fees and expenses incurred or to be incurred for such purpose. These costs include,inter alia, costs of feasibility studies, topographical survey of land, preliminary geotechnicalinvestigation of land, wind resource study, environment study, grid interconnection and other studies,fees of Project consultants/advisors, costs related to the performance guarantee to be furnished toAEDB, various regulatory fees to be paid to NEPRA, costs incurred during Project Companyformation, and costs relating to various permits for the Project.

Project Development Costs also include the "Project Administration Costs," which are costs requiredto maintain office for coordination with project stakeholders and to coordinate the construction andmonitoring services at project site, under Project Administration Costs. The costs include rent,utilities, and vehicles running expenses, maintenance and other office expenses during theconstruction period.

Following is the breakup of the costs:

Project Development CostFeasibility Cost

Permits, License and Company formation FeeSoftware Configuration CostProject ConsultantsProject Administration CostsHR CostsTraveling Expenses

Amount ($000)600.000570.431116.414938.882225.428931.315232.829

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Total Project Development Cost

a) Feasibilit;' Study Cost:

3,615.300

This head includes cost of technical feasibility, electrical and grid interconnection studies,geo-technical and topographic studies.

b) Permits, License and Company formation Fees:This includes fees paid or payable to NEPRA in respect of obtaining generation license, tariffapplications, annual license fees, and fees paid or payable to AEDB for the purpose of LOSand LOI for the implementation of the Project, NTDC and Environmental Protection Agency

of Government of Sindh.

The fees relating to Project Company incorporation and capitalization incurred on registrationof authorized capital of the Project Company with the Securities and Exchange Commissionof Pakistan ("SECP") are included in this cost.

c) Software Configuration Cost:This includes the online software configuration cost.

d) Project Consultants:YEL has engaged the highly reputed consultants , who lead in their respective fields,as project advisors, and have unmatched expertise in planning, engineering,financial, legal, tax, insurance , and technical matters . YEL has endeavored to puttogether the best team of consultants for the Project"so as to ensure that wind powersector in the country develops and the Project is bankable in all respects.

e) Project Administration Cost:

This portion of the Project Development Cost includes costs associated with rent,utilities, equipment inspection, vehicles fuel and maintenance and other alliedexpenses during the development and construction period.

The Project Company's head office is based in Karachi, which shall operate the initiallaunching of the Project development activities. This office is required to maintaincoordination with the Project Company 's lenders, shareholders and various governmentalagencies and shall work during the whole process of making the feasibility study,determination of tariff, signing of EPA / IA and other Project development activities.

J) HR Costs:The HR Costs include salaries, wages & benefits (except Workers Profit ParticipationFund("WPPF") and Workers Welfare Fund ("WWF")) of the following personnel;• Management Executivesn Technical and Operations department• Finance Departmentn Training and Human Resource Departmentn Supply and Logistic Department

These staff members shall be employed by the Project Company at the site and in Karachioffice.

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99) Travelling Cost:The Project Company has incurred travelling costs on both domestic and international routes,and is expected to incur further expenses during the project development and constructionphase.

D. Land rentals and Survey Cost of AEDB for first Ten Years

These costs covers the lease of 696 acres of land for the Project from AEDB together withstamp duty, registration fees, and cost of survey and demarcation of the land for the Projectalready paid to AEDB. This costs account for the rentals payment uptil year 2018 and paidupfront and hence it is capitalized as Project Costs. Furthermore, this cost also includes the costsassociated with acquisition of the right-of-way required for access to the Site.

E. Duties and Taxes

Custom, Taxes, Duties and Cess (including Sales Tax)Taxes and Customs Duty have been calculated by the Project Company in accordance with theRE Policy 2006 as follows:

Custom Duty & Sales Tax@ 0.00% (Zero Percent) has been assumed on import of machinery,equipment , goods, spares and materials for the Project, in accordance with the RE Policy 2006. It ishowever highlighted for NEPRA that the reduced rate of Custom Duty on imported items pursuant tothe RE Policy 2006 is 0.00% (Zero Percent) whereas the same is 5.00% pursuant to the Wind TariffGuidelines 2006. It is understood that this discrepancy emanates from the provision of SRO575(I)12006 through which the reduced rate of Customs Duty and Sales Tax is enacted.

The SRO 575(1)/2006 provides for reduced Customs Duty @ 5.00% and Sales Tax @ 0.00% (ZeroPercent) for following items imported under Serial Number 11:

"Machinery, equipment and spares meant for initial installation, balancing,

modernization, replacement or expansion of projects for power generation through

oil, gas, coal, wind and wave energy including under construction projects, which

entered into an implementation agreement with the Government of Pakistan.... ..

However, under the same SRO, Customs Duty and Sales Tax @ 0.00% (Zero Percent) are attributablefor following items imported under Serial Number 13:

"l. Machinery, equipment and spares meant for initial installation, balancing,modernization, replacement or expansion of projects for power generation through'

nuclear and renewable energy sources like solar, wind, micro-l yd.. l bio-ercrg ,

ocean, waste-to-energy and hydrogen cell etc.... ..

Since there seems to be an ambiguity on the reduced rate of Customs Duty to be applied on the importof machinery, equipment, goods, spares and materials for the wind IPPs, we request NEPRA to allowadjustment of capital cost of the Project and the tariff, in each case, for actual Customs Duty and SalesTax paid on imports, at COD.

Further, it is submitted that pursuant to SRO 575(1)/2006, in the event the contract price is greaterthan USD 50 million, locally produced machinery can be imported and no Custom Duty will be leviedin respect thereof. Considering that the EPC Cost (being the agreement price set out in the EPCContracts) is greater than USD 50 million, no provision for payment of Customs Duty against importof locally produced machinery has been made and in the event any Custom Duty is levied on any

31

imported machinery, equipment, goods, spares and materials that can be locally produced, such levied

Custom Duty shall be charged and adjusted as per actual at COD.

During selection process of the EPC Contractor, the Project Company has made all possible efforts ingood faith to require the EPC Contractor to incorporate as much locally produced material,equipment, and supplies as possible for the design, construction, completion, operation and the powercomplex. The Petitioner respectfully submits that the nature of the EPCC arrangement is such thatEPC Contractors generally do not warranty the performance of a power plant where certaincomponents thereof are purchased from sources other than the EPC Contractor. Power plants aretypically designed and constructed as a "package deal". In light thereof, if the customs authoritiesimpose customs duties or import taxes in excess of the number assumed in this Petition on account ofcertain equipment treated by the customs authorities as the one which is "locally manufactured" thensuch excess customs duties or import taxes shall be adjusted in the Project cost at the COD.

Adjustments shall be made at the COD in accordance with the Authority's settled principle in earlier

tariff rulings and in accordance with the final EPC Price.

Special Excise DutyThe Petitioner has assumed 0% Special Excise Duty at the time of import of plant, equipment,

machinery, goods, spares and material for the project, as the same is correlated with the rate of custom

duty. if the custom duty is charged then the special excise duty is also applicable, then the Petitioner

requests NEPRA to allow adjustment of capital cost of the Project and tariff, in each case , for actual

on imports, at COD.

Income TaxNo Income Tax is assumed at import stage in view of the SRO 947( 1)/2008 dated September 05, 2008and SRO 263(1)/201 I dated March 19,2011.

Sindh Infra-structure TaxThe Petitioner has assumed 0.85°%o Sindh Infra-structure Tax on account of imports for the Project. AsSindh Infra-structure Tax is applicable depending on the weight and distance of the Site from the port,then petitioner request NEPRA to allow adjustment of capital cost of the project and tariff, in eachcase, for actual on imports, at COD.

Taxes payable on various Consultants and Advisors feeThe Petitioner has not considered taxes / duties payable on fees of various consultants and advisorsand requests NEPRA to allow adjustment at actual at the time of COD.

F. Pre-COD Insurance Cost

It covers the cost of insurances of the Complex during the construction phase and up-to the COD.This is estimated at 1.35% of EPC Costs (exclusive of L/C confirmation charges). Pre-COD Insurancecost covers the insurance cost of Project Company's assets during construction as well as the costincurred prior to COD. Insurance cost during construction will be adjusted and trued up as per actualupon COD.

The Project Company, in view of the practices set by the other IPPs in Pakistan and in accordancewith the requirements set out by the Lenders funding the Project, intends to procure thecomprehensive insurance cover and include (but not limited to):

Construction, Erection All Risk Insurance (CEAR) / Third Party liabilityCEAR Delay - In startup InsurancesMarine Cargo and Inland TransitMarine Cargo and Inland Transit - Delay -In Startup Insurances

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ii.; ^^n

- Workmen's' Compensation Insurance- The Insurance Cost does not covers administrative surcharge, Federal Excise Duty and Federal

Insurance Fee, in each case relating to Pre-COD Insurance, the Petitioner requests NEPRA toallow adjustment on account of such taxes and duties, etc on actual, at the time of COD.

C. Financing Fees & Charges

Financial Charges include the costs related to the debt financing of the Project. It includes theupfront arrangement fee, agency fee, security trustee fee, lenders' monitoring fee, commitment fee,opening and retirement charges on letters of credit issued in favour of the EPC Contractor and theSeller's L/C to be issued in favour of the Power Purchaser and stamp duties and registration fees onthe financing agreements. These costs will be incurred upto COD.

In addition to above fees, all charges, fees on account of Lenders' consultant (technical, legal andinsurance, etc) have been included in this cost item. However the taxes and duties on FinancialCharges, advisors and consultants fees are assumed to bezero and will be adjusted at the time of CODas pass through.

Financing Fees and Charges Amount ($000)Arrangement Fee 1,589.057Commitment Fee 158.721Agency , Monitoring and Security Trustee Fee 97.012Lender's Advisors Fee 709.792Total Financing Fees and Charges 2,554.582

In light of the Authority's previous rulings , the Petitioner has assumed approximately 3% of the debtamount for this cost item . Financing Fees R Charges will be adjusted and trued up as per actual uponCOD.

H. Interest during Construction

Interest during construction is calculated on the basis of anticipated interest rates, equity injections,and the provisional construction payment schedule. It is assumed that the entire equity will be injectedup front, however the IDC figure is estimated on tentative drawdown schedule and would beadjustable at COD based on actual timing and amount of loans drawdown during the projectconstruction period, fluctuations in base rate (6-month KIBOR), changes in Project Cost includingchanges due to Taxes and Duties, and variations in PKR / USD exchange rate.

Basis for IDC Calculation

KIBOR 13.37%SPREAD 3.00%Total Interest Rate 16.37%

Return on Equity During Construction (ROEDC)

Based on the precedent determinations by NEPRA, the Petitioner has not included ROEDC in thetariff petition on the understanding that same shall be determined and allowed at the time of tariff trueup after COD based on the actual equity injection.

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114

SECTION-11

PROJECT FUNDING

The Funding Arrangement:

The capital structure of the company has been envisaged at a Debt: Equity ratio of 80:20, therebyresulting in the following capital structure for the Project:

%age Amount ($000)A Equity 20% 26,505.851

B Debt 80% 106,023.404

Total Project Cost 132,529.255

A. EQUITY:

The Sponsors will be committing at least 20% of the Project cost as equity.

(i) Arrangement of Equity:

The Sponsor has shown its commitment to the Project since its inception and in order to ensuretimely availability of the funds required by the Project Company, the Sponsorsare in the processof getting requisite approvals from their respective Boards of Directors and shareholders for theentire equity portion of the Project Cost.

(ii) Return on Equity and Return on Equi !y during Construction:

The return on equity ("ROE") component includes a return on invested equity giving aninternal rate of return ("IRR") of 17% net after deduction of withholding tax. ThePetitioner has assumed an IRR of 17% after dividend withholding tax of 7.5%. TheGovernment of Pakistan Guidelines requires that the tariff should be determined afterallowing for reasonable Internal Rateof Return ("IRR") on equity investment.

As mentioned earlier , ROEDC is not included in the tariff. Actual ROE and ROEDC shallbe subject to change depending on actual equity injection during the construction period,changes in Project Cost including changes due to Taxes and Duties, variations . in PKR /USD exchange rate and interest rate fluctuation.

B. DEBT:

A term sheet, dated 11 May 2011, was executed by the Petitioner with the leading local banks,including Habib Bank Limited ("HBL"), MCB Bank Limited ("MCB"), United Bank Limited("UBL"), Allied Bank Limited ("ABL"), Faysal Bank Limited ("FBL"), and Bank ALHabib Limited("BAHL") (collectively referred to as "Lenders"), to arrange debt financing for the purpose offunding the Project (the "Loan Term Sheet"). By way of the Loan Term Sheet, YEL has securedcommitments for the debt financing, which is a significant step and essentially a vote of confidence ofprospective lenders in the Project and the Sponsor.

The debt financing has been priced at 6 month-KIBOR plus 300 basis points (bps) per annum, with nofloor or cap; the salient features of the facilities are briefly encapsulated below:

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Summary of Terms

FacilityFacility AmountAvailability Period

TenorPricingPrincipal RepaymentMark-up

Advisors to theLenders

Syndicated Project Finance Facility ("PF Facility")Up to PKR 10,000 MillionUp to 24 months

Up to 12 years (inclusive of Grace Period)6 month KIBOR plus 300 bps per annumIn 20 consecutive, semi-annual installments6 months KIBOR plus 300 bps per annum , with no floor or cap.Mark-up shall be paid semi-annually in arrears.The Project Company is required to appoint the following advisors for theLenders, at its own costs:

a) Legal Counselb) Technical Advisorc) Insurance Advisord) Audit/ Tax Advisore) Any other advisor deemed necessary by Lenders.

PF & LC Facility Fees - Prior to CODArrangement Fee 1.5% on the arranged amountCommitment Fee 0.25% per year, payable quarterly in arrears on the undrawn balance of the PF

FacilityLC Commission 0.10% per quarter, which shall be paid quarterly in advance.Agency Fee PKR 3.0 million per annumProject Monitoring PKR 1.25 million per annumFeeSecurity Trustee Fee PKR 2.0 million per annum

PF & LC Facility Fees - Post CODAgency Fee PKR 3.0 per annumSecurity Trustee Fee PKR 2.0 per annum

Local versus Foreign Debt Financing

At a time when several potential wind IPPs are in the pipeline , and several wind farm developers aresimultaneously seeking crucial commitments . from the local and /or foreign project financiers, YELhas decided to- seek commitments from the local banks. While a few of these wind farm developersmay have acquired project financing commitments from the foreign financing institutions , YEL hasinstead chosen to avail commitments from major and well -reputed financial institutions in Pakistan,for the following reasons:

a) Mitigation of Project' s and Government of Pakistan's riskYEL is cognizant that the foreign financing option would be cheaper and may optically resultin a lower project cost and tariff per unit of elec_ricity; however, we fully appreciate the realcosts of this decision on the electricity consumers of Pakistan and the GOP - with respect toits exposure to the financing arrangement for the Project.

While the local currency denominated debt would be subject to indexations on account ofbenchmark (i.e. KIBOR) variations, any foreign currency financing would expose NTDC andthe end consumers to not only the fluctuations in LIBOR but also to the impact of exchangerate fluctuations on the debt repayment obligations, since that is a pass through item under thetariff. In the present environment, where such rupee devaluation is foreseeable (as evidencedby the fluctuations against major world currencies over the past 2 years), it would not be

35

04 11

prudent to enter into an arrangement that incurs exorbitant debt servicing costs denominatedin foreign currency and causes a drain on the national exchequer. Further important point tonote is that LIBOR is currently at historically low level and in future it is expected to increase

which will further increase the tariff.

b) Proven commitment of the local banks as lenders to the various IPPs in PakistanSeveral of the early IPPs set up under the 2002 Power Policy, including the likes of OrientPower, Sapphire Electric, Atlas Power, Nishat Power(s) etc. were setup under the aegis of thelocal banks that are also a part of the lending consortium to this Project. These early projectsfaced various formidable challenges during their respective financing, construction andcommission phases; in such testing times, the local banks, as the lenders, showed appreciationfor the nature of these challenges and proved their unbending commitment to the interest ofthe Project at every stage. This continued and reliable commitment has been essential, as seenin past precedents, for projects to achieve successful commercial operations.

c) Lead on the Learning Curve:Most of the local banks through participation in the recent wind IPP precedent, are alreadyahead on the learning curve vis-a-vis Pakistan's wind power generation sector and the risksthat accompany it. This better places them to undertake such transactions, as this Project,through a speedy execution of a feasible and sustainable financing and security structure. It ispertinent to note that only wind project that has achieved financial close was also all locallyfinanced.

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05 1)

SECTION-12

OPERATION AND MAINTANANCE COSTS

O&M expenses are one of the major unknowns for the wind developers in Pakistan, as there aren't anyup and running wind farms. O&M costs primarily cater for spare parts resulting from normal wear andtear and unexpected components failure, especially electronic controls, generators, rotor blades etc.This is even more critical in Pakistan where the temperatures during the high wind season are very highand machines have to work on almost full capacity in extreme weathers. Yet these maintenance costsare lesser as compared to overhauling and fuel costs of thermal power projects.

Another important thing to note is that there is no allied infrastructure available in Pakistan and it isanticipated that for the first 300 to 500 MWs, the O&M costs can be even more than the internationalindustry benchmark.

Summary of Operations Cost

These costs include the operations and maintenance costs of the Project and the cost of theoperational insurances to be taken out by the Project Company. Break-up of the sameisprovided hereunder:

O&M Cost Components US$ in Thousands ('000s) per annum

Year 1 - 2 Year 3 - 5 Year 6 - Year 11 - 2010

A O&M Outsourced Cost 700 1,908 1,908 -

B O&M by Project Company - - - 3,000C Technical Consultant's Cost 120 120 120 120D Unscheduled Maintenance Cost - 300 500 700E Fixed Assets / Spare parts 20 50 50 80F Payroll & allied expenses .350 350 350 350G Security Arrangement Cost 25 25 25 25H Vehicles Fuel and Maintenance 40 40 40 40I Administrative Cost 467 467 467 392J Land Cost payable to AEDB - - 16 16K Insurance Cost 1,102 1,102 1,102 1,102

Total O&M Cost 2,824 4,362 4,578 5,825

A. O&M Outsourced Cost

The variation in the O&M outsourced costs during the initial two years period and thereafter is due tothe O&M being carried out by the EPC Contractor as part of its warranty obligations during the initialperiod. From the third year onwards, the O&M of the Project will be carried out by the O&MContractor on a stand-alone basis.

The prices provided above are based on the price agreed with the EPC Contractor and the O&MContractor for performance of O&M services for the initial two years period and thereafterrespectively . The prices agreed include the costs associated with scheduled maintenance , routinemaintenance , services required for unscheduled maintenance and any spare parts and consumables

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fl.51

required for carrying out the scheduled and routine maintenance. During the initial two year period,costs of all unscheduled maintenance and spare parts will also be borne by the EPC Contractor and asit is under warranty period the quantum of O&M fee is low also . After the initial two years period

(post warranty period ) the cost of O&M is higher and also the major portion of the costs ofunscheduled maintenance and spare parts will be borne by the Project Company.

Breakup of O&M price in USD and Euro is as follows:

(1000') ('000')Euro Component Dollar Component

I - 2 years O&M 428.572 800.000

3 - 10 years O&M - 15,266.000

Note: Euro cost has been converted into USD on Euro / Dollar parity of 1.40, wherever applicable inthis petition.

B. O&M by Project Company

The Project Company shall carry out the O&M itself, after 10 years of COD. The cost is higherduring years 11-20 as compared to the initial 3-10 years period because the Project is expected torequire replacement of various items, and overhauling after 10 years of operations. Moreover, as wearand tear of the wind turbines is likely to increase after tenth year of operations, it is therefore assumedthat cost of spare parts of the Project will consequently increase which results in an increase in Fixed

O&M Costs.

C. Technical Consultant's Cost

Unlike conventional thermal power projects, wind power plants' performance is tested during the 2-year warranty period. International reputable technical consultant will be responsible for verification ofwarranty claims under the performance guarantees offered by the EPC Contractor in case of non-compliance of the Project with the agreed performance parameters.

In addition, the Project Company requires the services of international reputabletechnical consultantduring the entire operational to ensure that the Project performs in accordance with the performanceparameters agreed under with the Power Purchaser. This cost will be incurred in US Dollars.

D. Unscheduled Maintenance Cost

The prices include the costs associated with services required for unscheduled maintenance and anyspare parts and consumables required for carrying out the unscheduled maintenance. These costs willbe incurred only from year three onward as first two years costs is already covered under the 2 yearO&M contract. This cost is expected to be incurred in US Dollars.

E. Fixed Assets / Spare Parts

This includes cost of vehicles, office equipment, furniture, electrical appliances and tools required atsite for inspection of WTG equipment. 50% of such procurement shall be from the local market whilebalance shall be purchased from abroad and have been appropriately classified aslocal and foreignO&M respectively

The procurement of fixed assets has been catered for in each time band. These costshave registered anincrease in the year 11-20, as the fixed assets purchased during earlier periods would havedepreciated, become worn out and obsolete. In order to efficiently carry out the project activities,

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these fixed assets shall be phased out and replaced with new assets for the remaining 10 years of the

Project.

F. Payroll &Allied expenses

The payroll costs includes salaries, wages & benefits (excepts WPPF and WWF) of all staff as

follows;n Management Executivesn Engineering and Operations departmentsn Commercial & Legal Affairs department• Finance Department• Training and Human Resource Departmentn Supply and Logistic Department

These staff members shall be employed by the Project Company at the site and in Karachi office. Thiscost will all be incurred in Pak Rupee.

G. Security Arrangement Cost

Due to the volatile law and order situation in Pakistan and in the region overall, security arrangementsare a very important and vital subject. The Project has thus deputed a full time security team at its Siteoffice as well as for its accommodation to ensure that the Project Company is able to attract the besttalents in the field of renewable energy to Pakistan and address their valid security concerns. This costwill all be incurred in Pak Rupee.

H. Vehicles Fuel and Maintenance

This component includes the costs associated with the running and maintenance of vehicles at theKarachi and site offices of the Project Company. The vehicles include the vehicles required by thesecurity personnel for securing the site and vehicles required for supervision and coordination ofO&M activities, office use at Karachi office. This cost is will be incurred in Pak Rupee.

I. Administrative Cost

This cost component includes other administrative costs such as phone bills, travelling, rent andutilities, printing and stationary, entertainment expenses, audit fees, generation license fees, agencyand security trustee fees payable to the Lenders' representatives and the costs of their legal andtechnical advisors during the operational phase and includes certain other costs of running the officesduring the operation period of 20 years. This cost will all be incurred in Pak Rupee.

J. Land Cost payable to AEDB

The land lease has been paid to AEDB for first 10 years (upto year 2018) and is part of the Projectcost. This cost head includes the land cost to be paid to AEDB for the last 10 years. This cost will allbe incurred in Pak Rupee.

K. Insurance Costs

The insurance costs consist of the premium to be paid for insurances required undertheimplementation Agreement and those customarily required for the project financing transactions,including all-risk insurance/reinsurance for the Project, as well as business-interruption insurance(which is a Lender-stipulated requirement). As machinery breakdown, natural calamities (such asearthquakes), sabotage and consequential business interruption are the biggest threat to the Petitioner,it is imperative that all aspects of the risk are covered adequately and no compromise is made in thisrespect. As is the common practice in project financing lending throughout the world, a

39

i 1) 3

comprehensive operational insurance and reinsurance arrangement is fundamental to the bankabilityof the Project.

The insurance expense for the Project during its operational phase is expected to be denominated inforeign currency i.e. United States Dollars. The rationale for such assumed foreign currency coststructure is as follows:

Pakistan's insurance & reinsurance industry does not have sufficient capacity and expertise tomanage the operational risks of the Project entirely on their own. As a result, the local industrynormally retains only about 5% to 10% of the risk while 90% to 95% is reinsured abroad. Consideringthat the reinsurance abroad forms a major part of the insurance cost, it is submitted that NEPRAapproves the Project's insurance costs in United States Dollars, as has been the practice in NEPRA'sdeterminations for thermal IPPs;

Lenders financing the Project will require insurance of the Project's assets on a replacementcost basis, which will inevitably be in foreign currency. In view of the Project's EPC Cost beingdenominated in United States Dollars, it is expected that any replacement costs resulting from aninsurable event will be incurred in United States Dollars.

The operational phase insurance costs forming the Insurance Costs have been calculated at 1% perannum of the EPC Cost. In light of NEPRA's determinations for recent Wind IPPs and for thermalIPPs, it is submitted that NEPRA approves and allows the operational insurance costs up to 1.35% perannum of the EPC Cost provided that such costs will be charged by the Project Company at actual andwill be recoverable as the Insurance Cost component.

The insurance cost shall be charged by the Project Company at actual and will be recoverable asthe insurance cost components , The Insurance Costs does not include the administrativesurcharge, the Federal Insurance Fee and the Federal Excise Duty, in each case, relating to theoperational phase insurances and is assumed as Pass through costs.

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SECTION-13

TARIFF SUMMARY

The Petitioner seeks a levelized Reference Tariff of USC 18.14/kWh for the term of 20 yearsfrom the commercial operations date on BOO basis. The. Project construction period is assumedto be 16 nnual Energy Production of the Project based on 20 Nordex N100/2500 WTGs

.9`GWhroved by AEDB at 80 meters /sec benchmark wind speed at 80 meter hub

Tariff Structure

The proposed tariff for the Project is designed to cover the project costs both initial and on-goingincluding return on equity over the project life cycle. Components of costs covered by theproposed tariff are as follows:

• Fixed O&M (Foreign + Local)• Fixed O&M Foreign• Insurance

• ROE

• WHT on ROE• Debt Servicing (Principal + Interest)

41

Tariff

The Reference Generation Tariff for the Project over the 20 year concession term is given below:

PKR/K%Vh PKR/kWh UScents/kWh

Year Foreign Local Insurance WIIT ROE Local Debt Service Total TotalO&M O&M

PrincipalPayment

InterestPayment

EnergyPayment

EnergyPayment

1 0.51 0.55 0.68 0.23 2.79 2.92 10.62 18 .30 21.302 0.51 0.55 0.68 0.23 2.79 3.42 10.12 18.30 21.303 1.46 0.56 0.68 0.23 2.79 4.00 9.54 19.25 22.414 1.46 0.56 0.68 0.23 2.79 4. 69 8.86 19 .25 22.415 1.46 0.56 0.68 0.23 2.79 5.48 8.06 19.25 22.416 1.58 0 .57 0.68 0.23 2.79 6.42 7.12 19.38 22.577 1.58 0.57 0.68 0.23 2.79 7.51 6.03 19.38 22.578 1.58 0 .57 0.68 0.23 2.79 8.79 4.75 19.38 22.579 1.58 0 .57 0.68 0.23 2.79 10.29 3.25 19.38 22.5710 1.58 0 .57 0.68 0.23 2.79 12.04 1.50 19.38 22.5711 2.39 0 .53 0.68 0 .23 2.79 6.62 7.7012 2.39 0.53 0.68 0.23 2.79 - 6.62 7.7013 2.39 0.53 0.68 0.23 2.79 - - 6.62 7.7014 2.39 0.53 0.68 0.23 2.79 - - 6.62 7.7015 2.39 0 .53 0.68 0.23 2.79 - - 6.62 7.7016 2.39 0.53 0.68 0.23 2.79 - - 6.62 7.7017 2.39 0.53 0.68 0.23 2.79 - - 6.62 7.7018 2.39 0 .53 0.68 0.23 2.79 - - 6.62 7.7019 2.39 0.53 0.68 0.23 2.79 - - 6.62 7.7020 2.39 0.53 0.68 0.23 2.79 - - 6.62 7.70

1.56 0.55 0.68 0.23 2.79 4.19 5.58 15.58 18.14

Average (I to 2 years) US cents 21.30/KWhAverage (3 to 10 years) US cents 22.51/KWhAverage (I I to 20 years) US cents 7.70/KWhAverage (I to 20 years) US cents .] 4.98/KWhLevelized (1-20 years) US cents 18.14/KWh

42

A F f;

Debt Payment Schedule

The Local Debt Payment Schedule , based on the capital cost of the Project is as follows.

RepayPeri

mentod

PrincipalOpening

PrincipalRepayment

PrincipalTariff

InterestExpense

InterestTariff

TotalInstallment

Total DebtService

PrincipalClosing

Annual CashFlow

Semi Year Balance Component Component Tariff Balanceannuall (Rs/kWh) (Rs/kWh) Component

y (Rs/kWh)

0 -1 - 9,107,410,405 194,975,194 1.4037 745,441,542 5.3667 940,416,736 6.7705 8,912,435,211 -2 1 8,912,435,211 210,933,914 1.5186 729,482,822 5.2519 940,416,736 6.7705 8,701,501,298 1,880,833,4713 - 8,701,501,298 228,198,854 1.6429 712,217,881 5.1276 940,416,736 6.7705 8,473,302,443 -4 2 8,473,302,443 246,876,931 1.7774 693,539,805 4.9931 940,416,736 6.7705 8,226,425,513 1,880,833,4715 - 8,226,425,513 267,083,807 1.9228 673,332,928 4.8476 940,416,736 6.7705 7,959,341,705 -6 3 7,959,341,705 288,944,617 2.0802 651,472,119 4.6902 940,416,736 6.7705 7,670,397,088 1,880,833,4717 - 7,670,397,088 312,594,734 2.2505 627,822,002 4.5200 940,416,736 6.7705 7,357,802,355 -8 4 7,357,802,355 338,180,613 2.4347 602,236,123 4.3358 940,416,736 6.7705 7,019,621,742 1,880,833,4719 - 7,019,621,742 365,860,696 2.6340 574,556,040 4.1365 940,416,736 6.7705 6,653,761,046 -10 5 6,653,761,046 395,806,394 2.8496 544,610,342 3.9209 940,416,736 6.7705 6,257,954,652 1,880,833,47111 - 6,257,954,652 428,203,147 3.0828 512,213,588 3.6876 940,416,736 6.7705 5,829,751,504 -12 6 5,829,751,504 463,251,575 3.3351 477,165,161 3.4353 940,416,736 6.7705 5,366,499,930 1,880,833,47113 - 5,366,499,930 501,168,716 3.6081 439,248,019 3.1623 940,416,736 6.7705 4,865,331,213 -14 7 4,865,331,213 542,189,376 3.9035 398,227,360 2.8670 940,416,736 6.7705 4,323,141,838 1,880,833,47115 - 4,323,141,838 586,567,576 4.2229 353,849,159 2.5475 940,416,736 6.7705 3,736,574,261 -16 8 3,736,574,261 634,578,132 4.5686 305,838,603 2.2019 940,416,736 6.7705 3,101,996,129 1,880,833,47117 - 3,101,996,129 686,518,352 4.9425 253,898,383 1.8279 940,416,736 6.7705 2,415,477,77718 9 2,415,477,777 742,709,880 5.3471 197,706,856 1.4234 940,416,736 6.7705 1,672,767,897 1,880,833,47119 - 1,672,767,897 803,500,683 5.7847 136,916,052 0.9857 940,416,736 6.7705 869,267,214 -20 10 869,267,214 869,267,214 6.2582 71,149,521 0.5122 940,416,736 6.7705 - 1,880,833,471

43

Tariff Rationalization

The tariff requested by the Petitioner in this section may seem to be on the higher side as comparedthe precedent of FF'CEL, however certain assumptions need to be made uniform in order to make avalid comparison with the precedent transaction. The table below shows the impact of (i) KIBOR - InFFCEL's case the 6 Month KIBOR was 12.38% as opposed to the currently prevailing 6 monthKIBOR of 13.37%, (ii) Energy yield - due to the site related conditions as highlighted herein above,if138.9 GWh per annum with N100 as compared to FFCEL's annual energy yield of 143.6 GWH perannum, and (iii) higher outsourced O&M cost.

Following table recalculates the YEL tariff had the same assumptions for Kibor, Energy Yield andO&M are used as in the case of FFCEL.

Assumption Tariff Base Case(USc/KWh )

Tariff with FFCELAssumption(USc/KWh)

Variation(USc/KWh)

KIBOR 18.14 17.64 0.50Energy Yield 18.14 17.54 0.60Higher O&M Cost 18.14 16.99 1.15

As can be seen from the above table that Tariff requested by the Petitioner is comparable to theprecedent transaction i.e. FFCEL and hence it is requested that be allowed without any adjustment andrevision.

In addition, EPCC is lower as compared to precedent transactions where Nepra has approved Tariff asshown in the following table:

($"000") FFCEL Zorlu YELEPC cost per MW 2 ,246 2 ,461 2,180

Other factors to be noted are as follows:

I. N 100 is the latest technology on offer by Nordex that has been developed based on itspredecessor versions and therefore is an improved version as it incorporates the correction ofcertain issues that were witnessed in these predecessor versions.

2. The turbines and major equipment is manufactured in Europe, therefore is expected to be ofhigher quality than equipment manufactured in China

3. Due to the equipment being sourced from Europe, as opposed to China, the EPC Contractor hasincorporated higher transportation cost in the EPC price.

4. As"depicted in Section 3, Part 2 (a) NordexN100 results in better yield, given the topographicand terrain characteristics of YEL's site.

5. Based on the fact that the first 2 years of O&M are encapsulated in the EPC Contract, there isfuller scope of work, and seamless transition between EPC and O&M phases. The same is alsoreflected in the 8 year O&M Contract as the EPC and O&M Contractors are related entities

44

055

SECTION-14

INDEXATION ESCALATION. AND OTHER ASSUMPTIONS

As per the decision of the Economic Coordination Committee, the ROEDC, ROE and WithholdingTax component of the reference generation tariff shall be quarterly indexed to the US$/PKR exchangerate, based. on the revised TT & OD selling rate of US$ notified by National Bank of Pakistan.

INDEXATIONSNEPRA is requested to allow indexation for the various Reference Generation Tariff components in

the following manner.

1. Local Fixed O&M Cost Component

The Reference Local Fixed O&M Cost Component shall be quarterly indexed to the WPI of

manufacturing in Pakistan, as notified by the Federal Bureau of Statistics based on the followingformula:

LFO&M,LPev, = Relevant Reference Generation Tariff Component

PIR, WFI1140

Where:

WPI(Ref)

LFO&M'^LRev)

WP!Rev)

the revised Local Fixed O&M CostComponent applicable for the relevant quarter

the revised WPI of manufacturing in Pakistan for themonth prior to the month in which indexation is applicable,

as notified by the Federal Bureau of Statistics.

the WPI of manufacturing in Pakistan for the monthin which tariff is determined, as notified by the Federal

Bureau of Statistics.

2. Foreign Fixed O&M Cost Component

The Reference Foreign Fixed O&M Cost Component shall be quarterly indexed to both:

(a)

(b)

the USD/PKR exchange rate, based on the revised TT & OD selling rate of USDnotified by the National Bank of Pakistan; and

the US CPI (for all Urban-consumers), issued by the US Bureau of Labor Statistics.

The applicable formula shall be as follows:

FO&M = Relevant Reference Generation Tariff Component

'SUS CPI,ReV,/ US CPI, Ren) * (FX USD,RCV /FX USD 1 Ren)I

45

Where:

FFO&M,FKev) = the revised Foreign Fixed O&M Cost Component,

applicable for the relevant quarter

US CPI(Rev) = the revised US CPI (for all Urban-consumers) for the month

prior to the month in which indexation is applicable, issued

by US Bureau of Labor Statistics.

US CPI(Ren = the US CPI (for all Urban-consumers) for the month

in which tariff is determined, as issued by US

Bureau of Labor Statistics.

FX USD(RCV) = the revised TT & OD selling rate of PKR/USD as on

the date on which indexation is applicable, as

notified by the National Bank of Pakistan.

FX USD(Re0 = TT & OD selling rate of PKR/USD,as notified by the National Bank of Pakistanprevailing on the date of tariff determination.

A portion of the Foreign O&M cost is in Euros. It is prayed that on this Euro portion currencyindexation on the basis of Euro and escalation on the basis of "HICP" Euro Zone be allowed.

3. Foreign Variable O&M Cost Component

The Reference Foreign Variable O&M Cost Component of the Variable O&M Cost shall be quarterly

indexed to both:

(a) the IJSD/PKR exchange rate, based on the revised TT & OD selling rate of USD asnotified by the National Bank of Pakistan; and

(b) US CPI ( for all Urban-consumer), as issued by the US Bureau of Labor Statistics.

The applicable formula shall he as follows:

O&M,FRe,,, = Relevant Reference Generation Tariff Component

US CPI,RevJUS CPI(Ren) * (FX USD,Re,,/FX USD,Renjl

Where:

VO&M(FReV) = the revised Foreign Variable O&M Cost

Component applicable for the relevant quarter

US CPI(ReV) = the revised US CPI (for all Urban-consumers) for the month prior

to the month in which indexation is applicable, as issued by the

US Bureau of Labor Statistics

US CPI(RC) = the US CPI (for all Urban-consumers) for the month in

which tariff is determined, as issued by the US Bureau ofLabor Statistics.

46

FX USD(RCV)= the revised Ti' & OD selling rate of PKR/USD as on the

date on which indexation is applicable, as notified bythe National Bank of Pakistan.

FX USD(Refl = TT & OD selling rate of PKR/USD, prevailing on the dateof tariff determination as notified by the National Bank of

Pakistan

4. Insurance Cost

The Reference Insurance Cost Component shall he quarterly indexed to USD/PKR exchange rate,

based on the revised TT & OD selling rate of USD notified by the National Bank of Pakistan.

Furthermore, the Reference Insurance Cost Component has been calculated on the basis of insurancepremium of US$ 1.102 million (1% of the EPC Price) per annum, which is subject to a maximum cap

of US$ 1.471 million (1.35% of the EPC Price) per annum on the production of actual insurance

premium. This adjustment of Insurance Cost Component of the Reference Generation Tariff for

increased insurance premium shall only be applicable if the actual insurance premium for any year is

more than' US$ 1.471 million (1.35% of the EPC Price) and shall be applied for by the Project

Company along with the quarterly indexations and shall be applicable for the next year.

(a) Indexation Formula

The indexation of the Insurance Cost Component shall be based on the followingformula:

Insurance , HeVl = Relevant Reference Generation Tariff Component

(FX USD,ReV„FX USD,Ren

Where:

Insurance(RCV) = the revised Insurance Cost Component applicable for the relevant

quarter

FX USD(R,,)= the revised TT & OD selling rate of PKR/USD as on thedate on which indexation is applicable , as notified by theNational Bank of Pakistan.

FX USD(R,O = TT & OD selling rate of PKR/USD, prevailing on the date oftariff determination as notified by the National Bank of Pakistan

(b) Adjustment Formula

The adjustment of the Insurance Cost Component for increase in insurance premium

shall be based on the following formula:

47

Insurance

Where:

(A!!ii = Relevant Reference Generation Tariff Corn onent *p d

Insurance(AdJ) = the revised Insurance Cost Component applicable for therelevant year

P(Act) _

Nei)

Actual Insurance Premium or 1.35% of the

EPC Price whichever is lower

Reference Insurance Premium of US$ [.]million (1.35% of the EPC Price)

5. Return On Equity .

In line with NEPRA's previous determinations for thermal IPPs and the Wind IPPs, the ROE

Component of the Reference Generation Tariff shall be quarterly indexed to the USD/PKR

exchange rate, based on the revised TT & OD selling rate of USD notified by the National

Bank of Pakistan.

The applicable formula shall be as follows:

ROE = Relevant Reference Generation Tariff Component*

I(FX USD (R.) /FX USDJ

Where:

ROE(R,,) the revised ROE component applicable for the

relevant quarter

FX USD(RC) = the revised TT & OD selling rate of PKR/USD as on

the date on which indexation is applicable, as notified

by the National Bank of Pakistan.

FX USD(Ref= TT.& OD selling rate of PKR/USD, prevailing on the

date of tariff determination as notified by the National Bankof Pakistan

6. Withholding Tax on Dividend

The Reference Withholding Tax Component shall be quarterly indexed to USD/PKRexchange rate, based on the revised TT & OD selling rate of USD notified by the NationalBank of Pakistan.

The applicable formula shall he as follows:

HT R _ Relevant Reference Generation Tariff Component * (FX USD(Re,,), F

USD Re

48

Where:

WHT(RC,.) = the revised Withholding Tax Component applicable for the relevantquarter

FX USD(Rev)

FX USD(Ken =

7. Interest Charges

the revised TT & OD selling rate of PKR/USD as on thedate on which indexation is applicable, as notified by

the National Bank of Pak(_tan.

TT & OD selling rate of PKR/USD, prevailing on the date of

tariff determination as notified by the National Bank of

Pakistan

The Interest Charges part of the Reference Local Debt Service Component shall beseriniannually adjusted for variations in interest rate as a result of variation in 6 monthKIBOR.

The Interest Charges of the Local Debt Service Component shall be indexed based on thefollowing formula:

I v = Relevant Generation Tariff Component * (KIBOR,RCV, + [*I%)

KIBOR,Ren+ I•I%

Where:

'(Rev) the revised Interest Charge component applicable for therelevant semi-annual period

Kibor( RC.,) = the revised 6 month KIBOR rate at the end of each6 months period.

Kibor(Re) = 6 month KIBOR rate prevailing on the date of tariffDetermination (lei %)

ADJUSTMENTS AT COD

NEPRA is requested to allow the adjustments (as set out in this Section (Adjustments at COD)) to theReference Generation Tariff at the time of true up at COD.

1. Adjustments To Project Cost

It is submitted that the Project Cost be adjuster: at COD for the following based on theassumptions detailed in Section 5 (Project Financials) and the adjustment to the Project Costto be reflected in the relevant tariff components (Return on Equity and Debt Servicing):

(a) US$ / PKR exchange rate variations during the construction period;(b) Onetime adjustment for the Euro Portion of the EPC Cost for Euro / US$ fluctuation

during the Construction period

49

(c) All such Project Cost, which are subject to be adjusted, as per actual(d) all local Duties and Taxes paid or withheld;(e) arrangement and commitment fee charges and any other fees/charges by the Lenders

of the Project;(f) Interest during Construction for increase in Project Cost, change in interest base rate

(KII3OR), variation in loan & equity drawdowns;(g) Return on Equity during Construction (ROEDC; IRR based) based on actual equity

drawdown.

Pass-Through Items

In addition to the pass-through items stipulated in the standardized EPA (with its Schedules) and inthe Petition herein, any taxes, duties and levies etc. not factored in the tariff calculation shall be

treated as part of the Project cost at the time of COD.

Power Purchase Prior to COD

At present, it has been considered and planned that the whole facility shall come online at once at thetime of COD. However, setting up wind power Projects involves massive infrastructure. The energyequipment is commissioned in pieces. The finalization of Project security documents can also pushthe Project to an alternate route. Particularly, it is emphasized that the Petitioner shall commence withconstruction from equity contribution even before the Financial Close. In the context of above, it isproposed to allow sale of any power to the purchaser which is dispatched on the grid before achievingthe COD under the provisions of EPA. This shall also include the power dispatched on the grid duringtesting and commissioning of the plant.

General Assumptions

The Petitioner' s proposed tariff has been worked on the basis of following non-exhaustive list ofassumptions - any change in relation thereto will require an appropriate adjustment in the proposedtariff:

I. Debt: Equity ratio is assumed to be 80:20.2. 100% of Debt has been assumed to be financed through local banks and financial institutions.3. Interest rate for debt is assUimed at 16.37% (6 Month KIBOR plus 3%),. to be indexed semi-

annually.

4. A constant ROE of 17% (IRR based) is assumed (net of 7.5% withholding tax on dividends)over 20 years. The ROEDC shall be accrued at the time of COD according to the actualschedule of equity injection.

5. Exchange Rate (PKR/US$) is taken @ PKR 85.9 per US$.6. Any taxes (Federal, Provincial, Local or district), stamp duties and levies etc. which are not

factored in the tariff calculation shall be treated as Pass-Through items, in term of EPA.7. No customs duties, FED sales tax and income tax have been considered for imports, other than

Sindh Infrastructure tax. Any changes in the customs duties or any other duty or tax on importof equipment and material will be treated as "Pass-Through" to the Power Purchaser. Similarly,customs duties on spare parts after COD will be considered "Pass-Through" to the PowerPurchaser.

8. Any additional amount towards withholding tax which has not been assumed, if levied, will be"Pass-Through" to the Power Purchaser.

9. 7.5% withholding tax on dividend is assumed. Any changes in the aforesaid withholding taxregime will be "Pass-Through" to the Power Purchaser. General Sales Tax and all other taxeswill also be treated as a "I pass-Through "

50

Ii fl

10. Zak-at deduction on dividends (currently u, 2.5%'%), if levied, will be considered as "Pass-Through".

If. The Power Purchaser shall he exclusively responsible for the financing of construction,operation and maintenance of the Interconnection and Transmission Lines as per the prevailingpolicy at the time of tariff determination.

12. Main Energy meter and electronic recorder for continuous recording of readings will beprovided by NTDC at its own cost.

13. No hedging cost is assumed for exchange rate fluctuations during construction and all costoverruns resulting from variations in the exchange rate during construction shall be included inthe Project Cost.

14. Any other assumptions that are not expressly stated herein but are based on the EPA draftnegotiated by the Petitioner with the Power Purchaser. Consequently any change in any suchassumptions may lead to change in the Reference Generation Tariff.

15. The payments to Workers Welfare Fund and Workers Profit Participation Fund have not beenaccounted for in the Project budget and have been assumed to be reimbursed at actual by thePower Purchaser.

16. Any incentives given to any other Wind IPP shall also be given to the Project and thePetitioner.

17. The Petitioner will be entitled to raise further and additional grounds at subsequent stage and atthe time of tariff hearing.

51

(If

SECTION-l_5

BENCHMARK ENERGY TABLE

The Benchmark Energy Table and Complex Power Curve are used by the Power Purchaser as a

means of estimating the performance of the Project. These provide a benchmark for the energy to be

produced by the Project at a given wind speed. The payments to the Project Company for the energy

produced as well as the coverage provided to the Project against wind speed variability risk shall bebased on these tables and the same shall be attached as schedules of the EPA. The said tables alsoform the basis of payment to the Project Company against Non-Project Missed Volume (as defined

under the EPA). NEPRA is therefore requested to approve the Benchmark Energy Table and Complex

Power Curve provided in Annex - L and Mrespectively in order for the same to be appended asschedules of the EPA.

52

DETERMINATION SOUGHT

The Petitioner would be pleased to provide any further information , clarification or explanation thatmay be required by the Authority during its evaluation process.

In light of the foregoing submissions , the learned Authority is kindly requested to approve thePetitioner's generation tariff together with the pertinent indexations in accordance with the Projectcosts and the assumptions related thereto mentioned above for a 20-years EPA term post COD. Anyothehiy is just , proper & better may also be awarded.

53

RIZVI, ISA, AFRIDI & ANGELL AFRIII & ANGELI.Dubai, Sharjah,

Ahsan Zahir Riz% i %D\'OCATES & ('ORI'ORATE COUNSELLORS Abu DhabiNIasood Khan Afi idi AFRII)I & ANGELLA) la Ahmed

N;vimiiJl(r Ro.id

Sector r-8/4

.

ShanghaiAyesha Malik 1^LAMABAD 14000 AFRIDI & ANGELL LLCIlasnain Naq%ce New York1'ousaf Khosa UAN: (9251) 111 LAWYER

Bilal ShaukatTcl (9.'51) 2852,127 30, 2851337

Nadir Altaflax: (92 51 ) 2850444 LAW

Omer SoomroI Man islamaboi(q)nealaw rom

Nlazhar Bangash www.riaalaw.com Hameln

LEXMUNDIIMO NOMD O lFID .•C £IIOI.&IIOI. 01 . VDf,o,OIYI LAW:!Au3

By Hand

7th September, 2011

RegistrarNational Electric Power Regulator AuthorityOPF Building , Shahrah -e-Jamhuriat,G-5/2, Islamabad

Dear Sir,

Subject: Tariff Petition ofYunus Energy Limited (the "Company") 5oMW Wind Power Project at Jhampir

WVe write with reference to t:]e documents submitted in respect of the subjectTariff Petition. Along With the sULlect Tariff Petition we have submitted contractsillustrating the EPC and O&M arrangements.

For your record, appended hcre'.%-ith are the executed pages of 'Offshore EPCContract', 'Onshore EPC Contract' initial two years O&NI arrangement, and eightyears O&M arrangement. The c .ecuted pages attached evidence signing of theaforementioned documents.

We AA'ill submit the relevant notarir.,A affidavit within this week.

Sincerely,

Rizvi , Isa, Afridi & Angell

D-67, Block 4 , Clifton , 191-A, Cavalry Groundh:iricln 7`600 Shami Road , Lahore Cantt.

1':AN 102 211 I I I-IAA 1'LR UAN (92 42) 111-LAWYER

g e l (0'_ 1113 `96-?) )'. 3183-(i 3l lJ, -2'') Tel (92 42) 3662-0588, 3662-0599ray 1'1' 211 35'7-1 u14 iSn- I,Ll F.1\ (02-12)3662-0;77

I Mama karachi/ riaalaw.coni E Mail:lahore@riaalaw.com

Offshore

SIGNATURES

IN «'ffNras W' II-1a o , the Parties h:ve caused thk Agreement to he executed Ion the date first

ahii 'e vritten.

Foiz ;1NI) ON IWIsIIALI 01':

1`u'I s ENI :I m Lrnu ft.:n through itsaiithorl,ed signatory

Nanle:

Detil2Lnation:

in the presence bf:

si.,nature o,"NI TrNEsm1's

i- Name:

Address:

to c! 141:

Name:

Adress'

Ime in or is

c( N.\Tt Ii<r

......... .......

I

116,1

offs ho re

NoIzI)L. St.xG .v'oi t: EO III 'lIV NI.

I'Iti^:1lI.. I.I]mIII -.D throe 11 its

an horisecl si n for

Name:

1)etiTn:itionl:

in the presence of'.-" Il'C:Illlre Of 1^'I I'\I: SSI':s

Address:

NIC No:

2 Name:

Address

NIC No:

ter' .

}

J

Page 144 ol'145

/........ ......

... ..............

(171J

Oj;shore

I)r5(()v F7,1 ( F()1< .\'I) O .\ I;IAIA IT

OF liSt : L1' .\ N1) E:\(' II OIIII:R

(_I).\Ik.\(fOl< 1'.1Rl\) tluou i itsaut}i riled signau_ yy

Nalnc:

Designation:

in the presence o!

si nature 01 NV1'1 ^\'I.:Stil•;ti

I- Name: C•. J

Address: ,.` F' .:. _ - I ,r l

N I C No: ? . '1 ;- i S , i( 11

Name: . . ,'

A ddres;

NIC No:

1if

}

Page 145 OF 145

sr; J\It_ RI

.r ..............................

SIGt\',\ MRI,

SIO' Aj I IRI

(17 1

Onshore

SiCNA 1 URES

IN WI NESS WIIEREOI•, the Parties have caused this Agreement to he executed in on the date first

above written.

Foit :1\11 AN I3EiI:^Lr OF,,:

Yt:Nus E EIWC5' LRII'I'EU through itsauthorised signatory

Name:Designation:

in the presence of:signature of WITNf•:ssI:s

I- Name:Address:N1C No:

2- Name:AddressNIC No:

}

Pave 159 of 160

SIGNATURE

Onshore

Nontwx SINGAPORE SERV'tcr:SI'urv'+.Tr T.ntrrt:u it;r;iu 1 it:,authorised signatory

Name:Designatiwi:

DES(•oN ENGINLL': RtNG Lmm:nthrough its authorised signatory

Name:

Designation:

DEsCON INTECRATED PROJECTS

PVT LIMITED through its authorised

signatory

in the presence of:signature of WITNESSES

}

}

}

Name : A A-7-1//,'Add ress: - :^► fey-; T^, jt^:.;^, ,^NIC No-

1- Name:Address I't. i

O : 3; l..t 1 f (:T L .-t i L r1"IC,

Page 100 of 160

SIG`AI URF

•

........... .......................

0&&2 Year

\AI111\\\'I1,\ 1 %

alt(t\^ '„ itt l'.

I2t:O1 , th)' 1,;i1-ii-< ha\ c itn,.,C) Iit;"

FUR \\•I) I )N ISt:ll \i.l C ► G:

N liNLS F,-,v c;\ LI\Ii HA) (hrouto!1 its

:tulltorised si naiorv

Name:

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^NNEx - CGovernment of Pakistan

Alternative Energy Development Board (AEDB)13, Khayaban -e-Bahria Phase V, DHA Karachi

Ph: 021-35342710 / rax: 021-35847610

B/3/1/LEPL/08

Mr. Sohail TabbaCEOLucky Energy Pvt. Ltd.L-A, 2/B, Block #. 21, Federal B Area,Rashid Minhas Road,Karachi.

.A.PI3

r ► July 2011

Subject: VERIFICATION OF POWER PRODUCTION ESTIMATES FOR 50 MWLUCKY ENERGY PVT LTD WIND POWER PROJECT AT NordexN100 WTG IN JHAMPIR

Reference is the AEDB standard practice for verification of powerproduction estimates at IPP wind farm site for the approval of project feasibility study.

2. Alternative Energy Develop;n nt 9oard (AEDB) has received theproject feasibility study from Lucky Energ Pvt Ltd (L.EPL) for the development of 50MW wind power project in Jhampir, district i hatta Sindh. As per the standard practicefor the approval of project feasibility st,Oy AEDB verifies the power production

estimates calculated by the IPP through AEC)B's technical consultant Risoe National

Laboratory, Denmark. After internal review of project feasibility study at AEDB, the

technical information, as per the submitted feasibility study by company, forcalculating the production numbeis ai tie project ' site was sent to Risoe forverification.

3. AEDB has received the venh: ation report from Risoe. The productionestimates are verified against the AEDB c'siablished benchmark wind speeds fo!Jhampir region. The annual benchmark energy production at the LEPL wind farm site

verified by Risoe is 138 .9 GWh (p50) at Nooriabad _ PMD Mast Data using 20 x

Nordex N100 VVTGs These production es!irv ates are verified at, annual benchmarkwind speed for Jhampir region . The results of the calculations at differentprobability /confidence level calculated b,? Risoe are shown in the table below(Sunmary of the report is attached as Ai it'., A").

li s it

Governrmnit o PakistanAlternative Energy Development Board (AEDB)13, Khayaban-e-Bahria Phase V, DHA Karachi

Ph: 021-35342710? Fax: 021-35847610

Benchmark wind speed7.3 nis-I at 80m

Net r1EPwithouttechnicalloses (G Wh)

20 wind turbir .;Nordey N10tr VI %Vf-huh Ii.tight SO inetersNooriabad mast '?00 3-2006

Neighbouring wind' Neiglibuwing'aindfarmsNOh 33 Witi farm. with 21 \1'f(S7711 1 M\1J S\\'l'-101 2.3ht\t'

P50 152'.9

P70

P90

Net AEI' P50withtechnicallosses (GWh) P9O

........... .._lu?.6

AE[?1.3

4. Alternative Energy Developn-a : nt board considers the power productionnumbers verified by Risoe as the lower bound and believes that the production

numbers should not be lower than the Risoe calculated figures mentioned above at

Lucky Energy Pvt Ltd wind farm site using 20x Nordex N100 VVTGs.

Copy to:

1. PS to CEO, AEDB (for information piease)

1.`u.o 1 I r) S

Ids r ii .

(Naeem Memon)Deputy Director (wind)

Governmer.; of PakistanAlternative Energy Development Board (AEDB)13, Khayaban -e-Bahr-t , Phase V , DHA Karachi

Ph: 021-35342710 : Fax: 021-35847610

Summary of the Report

A ED S

Annex-A

The report is a verification of the energy yield for the benchmark wind speed values

developed for Jhampir region. Due to the unavailability of bankable wind data and for

the fast track development of Wind Energy in the country the Government of Pakistan

has introduced an innovative idea of establishing the benchmark wind speed values

and has taken the risk of variability of wind speed values in different regions (Gharo &

Jhimpir), so that the independent power producers may not feel the risk of

unavailability of reliable wind data. Keepinrl it in consideration the power production

estimates are verified against the Benchmark wind speed values.

Using data from the Nooriabad meteor-: lcgical mast for the period 2003-2000

resulted in an estimate of the annual energy yield from 20 x Nordex N100 WTGs in

the Lucky energy pvt Ltd (LEPL) wind farm shown in the table below. The net Annual

Energy Production (AEP) without technical losses includes losses to wake effects

between the turbines in the LEPL wind pt.trk as well as from the neighboring wind

turbines and power curve density correctior; loss. The power curve density correction

loss is calculated as 2.7°/x. The net AL_I-' with technical losses accounts for the

availability of the wind turbines with 95`, T:,-iiperature Losses as 1 5%. electrical

losses with 3% and auxiliary consumption, The total reduction due to technical

losses is therefore 0.95x0.985x0.97x0.99-D.90 or 10%. The calculations are carried

out with hub heights 80 meters for Nordex N100. The calculations by Risoe are

performed with a power curve for an air density of 1.225 kgm'. The mean air density

at the site is approximately 1.175 kgm-3, Tti - effect on the yield of using an air density

of 1.225 instead of 1.175 kgm-3 is included in the losses as a power curve density

correction.

Governrner;t .: f PakistanAlternative Energy Development Board (AEDB)13, Khayaban -e-Bahri Phase V, DHA Karachi

Ph: 021 -35342710 / Fax: 021 - 358476 1 0

13en0unark wind sped7.3 ms- I al 8Ont

Net ALTW i thoutteciuiicalloses (GWh)

Net AFTwithtechnicalTosses ((ih)

P5()

11 7 0

PO)O

P50

P70

P90

20 wind turhink-s

Nordex N 100 MWflub I laight Sti metersNooriabad m:i: 2003-2006

Nciehhouring r:H ,tl Neighbouring windfarms with 33 \\' 16 farms with 2I \V T(i57711 1.5,\MlW SW, I-101 2.31w

AED1;

YES ENEREY LIM

Ei L.t1ul ^ Ztz H"iji H.7: 'im i-3 ha %i

P C2'! _ '1`30177:`_-1 i Z

8'h September 2011

Rana Muhammad Amjad,Chief Executive Officer,National Transmission and Dispatch Company Limited,WAPDA House,Shahrah-e-Quaid-e-Azam,

Lahore.

Dear Sir

Offer to Sell Power by YEL to NTDC

As you are fully aware that on 6 'h May 2006, M/s Lucky Energy Limited ( the "Sponsor"), a companyunder the flagship of Yuntis Brothers group obtained a Letter of Interest ("LOI") from AEDB for thedevelopment of a 50 MW wind farm at a proposed site located in Jhimpir, District Thatta, province ofSindh, on a Build Own and Operate (" BOO") basis ( the "Project") in terms of the Policy forDevelopment of Renewable Energy for Power Generation, 2006, (the - R.E. Policy") which provides aclear set of incentives, with the participation of the renewable energy projects, in particular powergeneration through wind energy.

Pursuant to the aforesaid, a special purpose vehicle under the name of Yunus Energy Limited (YEL)as incorporated under the Companies Ordinance 1984, as a public liniited unlisted company, which is

fully owned by the Yunus Brother group.

As required tinder the terms of LOI, the bankable feasibility study was conducted and prepared byWind Rose Consultancy (Pvt.) Limited and Sgurr Energy Limited UK which was later revised onaccount of modifications in the technology ("Feasibility Study").

It may also be mentioned here that the Office of the Chief Operating Officer (CPPA), NationalTransmission and Dispatch Company Limited , Lahore, has formally vetted Electrical GridInterconnection Study of our project , vide its letter no .COO/CPPA/CE/MT- III/Planning/ 1579-88 dated22nd February 2011.

As required by AEDB, the one-window operation of the Government of Pakistan, the Company hasfiled before the National Electric Power Regulatory Authority ("NEPRA") the petitions for thedetermination of generation tariff and grant of generation license ( the "Petitions"). A fundamentalfeature of our Project is that its entire output of power will be available to National Transmission andDespatch Company Limited ("NTDC") through Central Power Purchasing Agency.

Cont'd on Page # 2

fS^;

Yu UZ EL Y LIM=D

Page # 2

Therefore, we, Yunus Energy Limited, refer you to the energy purchase agreement (the "Energy

Purchase Agreement") - to be executed between YEL and National Transmission & Dispatch

Company Limited through Central Power Purchasing Agency ( the "Power Purchaser") - relating to the

YEL 50MW Project.

Pursuant to the 8.2.1 of the R.E. Policy, it is mandatory for the power distribution utilities to buy allelectricity offered to them by renewable energy projects that are established in accordance with theprovisions given in 8.2.2 of the RE Policy 2006. Further, since the Project is in accordance with section8.2.2 of the RE Policy, 8.2. 1 will be applicable to it.

In view of the foregoing, YEL hereby offers for sale to the Power Purchaser the power to be generatedthrough its Project pursuant to the terms of the Energy Purchase Agreement (the "Offer for Sale of

Power").

We hope that YEL's Offer for Sale of Power to the Power Purchaser will enable the Power Purchaserto meet its regulatory requirements relating to the purchase of power from the Project'and look forwardto expeditious conclusion of such process. We thank you for your continuing support to thedevelopment of wind power sector in Pakistan and to our Prnjcct.

In light of the aforesaid, it is kindly requested that you may kindly provide us with your consent for

submission to NEPRA.

Thank you very much.

Yours sincerely,for Yunus Energy Limited

Abdull&h^kttar AbdullahCompanyS etary

U 1I

NATIONAL ELECTRIC POWER REGULATORY AUTHORITY

INTERVENTION REQUEST

PETITION FILED BY YUNUS ENERGY LIMITED FORDETERMINATION OF REFERENCE GENERATION TARIFF

(CASE NO . NEPRA/TRF-186/yel-2011)

Name/Address

Manner in which theintervener is likely tobe affected by anydetermination in the (*)proceeding.

Contention / Groundsof making the formalrequest

(*)Relief Sought (if any).

*)

Brief of evidence (ifany)

*)

Comments.

(*)

(*) Add additional Supplements if required

Date:Signature

To be accompanied with:1. An affidavit on stamped paper (sample attached), sworn before an authorized

officer.2. Intervention Request Fee

CONTENTS OF AFFIDAVIT

The affidavit to be submitted with any petition or communication where in any

statement of fact or opinion is made by the petitioner or the communicator, shall

be drawn up in the first person stating the full name, age, occupation and address

of the deponent and the capacity in which he is signing and indicating that the

statement made therein is true to the best of the knowledge of the deponent,

information received by the deponent and belief of the deponent, and shall be

signed and sworn before a person lawfully authorized to take and receive affidavit,

provided that, a communication filed during the course of a hearing may be

affirmed in person before the Authority by the person filing the same.

Where any statement in an affidavit given as per paragraph above is stated to be

true according to the information received by the deponent, the affidavit shall also

disclose the source of such information.