Solar 350 EIS Brochure

Commercial Solutions to Climate Change

ENTERPRISE INVESTMENT SCHEME PLACING Offered for Subscription: 350,000 A SHARES PRICED AT £14.00

This offer will open on the 1st of May 2013 and close on Friday 7th of June 2013 or when fully subscribed, whichever is sooner In the event that Solar 350 does not raise at least £3,000,000 across SEIS, EIS and Institutional Placings, all funds received will be returned to investors with no deductions Seed enterprise investment scheme offers also available Allocations based on completed subscription documents, KYC documentation and cleared funds.

For High Net Worth and Sophisticated Investors Only

SOLAR 350 LTD 22 Hanover Square, London, w1s 1jp T: 0203 151 1 350 F: 0203 151 9 350 W: solar350.co.uk Solar 350 Ltd Registered Office: Unit 42, The Coach House, St Mary’s Business Centre,66-70 Bourne Road, Bexley, Kent. DA5 1LU T: 0203 151 1 350 T: 0203 151 9350 W: solar350.co.uk Solar 350 Ltd is registered in The United Kingdom under Company Number: 07678367

inDeX 1.

Executive Summary

2.

The Fight against Global Warming

3.

Solar 350 Ltd 3.1 Grue og Hornstrup A/s 3.2 Solar 350’s Board 3.3 Additional Team Members 3.4 Corporate Participants 3.5 Organisational Structure for 2013

4.

Renewable Energy Markets 4.1 Solar Voltaic Technology 4.2 Solar Design provided by Grue and Hornstrup A/s 4.3 Solar Projects Due Diligence 4.4 Solar Projects Undergoing Due Diligence

5.

Key Performance Indicators 5.1 Solar Irradiation 5.2 Renewable Energy Subsidy 5.3 Electricity Price 5.4 Existing Energy Generation 5.5 Land and Labour Cost

6.

C D E F G H I J K L M N O P Q R S

Mitigation of Solar Risks

7. Financials 7.1 Valuation 7.2 Financial Illustration 7.3 Cash flow 7.4 Notes 8.

SEIS Tax Reliefs 8.1 EIS Tax Reliefs 8.2 Further Information on Tax Relief 8.3 Suitability 8.4 Corporate Governance

9.

Addendum and Supporting Information A Certificate of Incorporation B Certificate of Name Change

T U 10.

Financial Information on Solar 350 Stakeholders Shareholding Shareholdings Post Equity Raise Stakeholder Agreements Additional References for G+H A/s Project Design and Slate Solar Equipment Equipment Transport Assessment Project Costings O&M Cost Breakdown 1st Year G&A Cost Breakdown Future Year G&A Cost Breakdown Cash Flow Forecast Sample Project Letter of Intent for Equipment and Mezzanine Finance Conditional Letter of Intent for Debt Finance EU Press Release on Romania’s Green Certificate Scheme Opinion on Romania’s Green Certificate Scheme by Grue og Hornstrup & Supporting Press Releases in Romanian and English Legal Opinion on Romanian Green Certificate Scheme Confirmation of Advanced Assurance in Relation to Tax Status from HMRC

Subscription Bundle 10.1 Procedure 10.2 Terms and Conditions of the Restricted Offer 10.3 Application Form 10.4 Agreement 10.5 Statement of High Net Wealth Status 10.6 Statement of Sophisticated Investor Status

ImpoRtant InfoRmation

This information memorandum is being issued by SOLAR 350 1 to a limited number of parties in connection with the issue of shares in SOLAR 350.

The content of this promotion has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.

The purpose of this information memorandum is to assist the recipient in deciding whether it wishes to proceed with further investigations of SOLAR 350’s offering.

This information memorandum does not constitute an offer or invitation for the sale or purchase of securities or any of the businesses or assets described in it.

The information in this information memorandum, which does not purport to be comprehensive, has been provided by SOLAR 350 and has not been independently verified. While this information has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by SOLAR 350 or by any of its respective officers, employees or agents in relation to the accuracy or completeness of this information memorandum or any other written or oral information made available to any interested party or its advisers and any such liability is expressly disclaimed. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievement or reasonableness of any future projections, management estimates, prospects or returns contained in this Memorandum or in such other written or oral information.

No information set out or referred to in this information memorandum shall form the basis of any contract. Any prospective purchaser of shares in SOLAR 350 shall be required to acknowledge that it has not relied on or been induced to enter into such an agreement by any representation or warranty, save as expressly set out in such agreement.

1

Within this document SOLAR 350 LTD shall be known as SOLAR 350.

This information memorandum has been delivered to interested parties for information only and on the express understanding that they shall use it only for the purpose set out above. SOLAR 350 gives no undertaking to provide the recipient with access to any additional information or to update this information memorandum or any additional information, or to correct any inaccuracies in it which may become apparent, and it reserves the right, without giving reasons, at any time and in any respect, to amend or terminate the procedure for the issue of its shares or to terminate negotiations with any prospective purchaser. The issue of this information memorandum shall not be deemed to be any form of commitment on the part of SOLAR 350 to proceed with any transaction.

This information memorandum is being distributed on the basis that each person in the United Kingdom to whom it is issued is reasonably believed to be such a person as is described in Article 19 (Investment professionals) or Article 48 (certified high net worth individuals) or Article 50 (certified sophisticated investors) or Article 50A (self-certified sophisticated investors) or Article 49 (High net worth companies, unincorporated associations etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended or is a person to whom this information memorandum may otherwise lawfully be distributed. Persons who do not fall within such descriptions may not act upon the information contained in it.

This communication is exempt from the general restriction (in section 21 of the Financial Services Act 2000) on the communication of invitations or inducements to engage in investment activity on the grounds that it is made to professionals/ certified high net worth individuals / self-certified investors. You should consider carefully any decision to engage in investment activity to which the communication relates.

If you are in any doubt about the investment to which the communication relates you should consult an authorised person specialising in advising on investments of the kind in question.

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ImpoRtant InfoRmation (Cont.)

This information memorandum is not being distributed to persons outside the UK. However, any recipient of this information memorandum in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements. This information memorandum does not constitute an offer to sell or an invitation to purchase securities in the Company in any jurisdiction.

This information memorandum shall not exclude any liability for, or remedy in respect of, fraudulent misrepresentation.

By accepting this information memorandum, the recipient agrees to be bound by the foregoing limitations. If you have not received this document directly from SOLAR 350, your receipt is unauthorized. Please return this document to SOLAR 350 LTD immediately or delete any electronic copies.

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Outside Investors being investors not directly connected to the business’s operations

EXECUTIVE SUMMARY

Planning for Solar 350 Ltd officially began in May 2012.

The stakeholders of Solar 350 are the team behind the 350 Group (www.350ppm.co.uk) and Grue og Hornstrup A/S, (http://www.g-h.dk/) the Danish Engineering Company.

icant political momentum to encourage energy generation from renewable sources. This presents a significant opportunity for companies and investors to participate in the emerging ‘green economy’.

As of 15th April 2013, all components of the businesses operation have been identified and sourced. Documents supporting these developments can be found in Section 9.

To promote these changes, Governments around the world have set challenging targets to reduce sovereign emissions and promote renewable energy generation.

The European Union has been a leader in this field.

Solar 350’s business model, just like solar power, is highly scalable. Significant efforts have been made to reduce fixed costs to a minimum and ensure that Solar 350’s management’s objectives are aligned with the shareholders.

The EU’s Climate and Energy Package3 is a set of binding legislation which aims to ensure the European Union meets its ambitious climate and energy targets for 2020.

These targets, known as the “20-20-20” targets, set three key objectives for 2020. These are:

Solar 350 is now launching SEIS, EIS and Institutional Equity Placings aiming to raise circa £7.9 Million in equity.

This equates to a 2013 CAPEX of £31M when combined with debt finance.

> A 20% reduction in EU greenhouse gas emissions from 1990 levels;

Subject to Solar 350 raising at least £3M, the placing and issuance of shares will proceed. In the event that Solar 350 does not raise at least £3M, all funds raised via this placing will be returned to investors with no deductions or charges.

The £3M mark relates to approximately 2 Mega Watts of installed capacity.

Background

In addition, there has been a growing consensus that a reduction of carbon emissions is vital to avoid the risk of climate change. These factors have brought about signif-

4

http://ec.europa.eu/clima/policies/package/index_en.htm http://www.350ppm.co.uk/0projects

> A 20% improvement in the EU’s energy efficiency.

A commitment to support the shift to renewable energy has now been made by the majority of OECD countries.

The form of regulatory and policy support varies from measures such as caps on industrial emissions to price support mechanisms to stimulate capital investment in renewable energy infrastructure.

Solar 350

As global energy demands increase, the existing dominance of fossil fuels in the energy generation sector is becoming increasingly unsustainable.

3

> Raising the share of EU energy consumption produced from renewable resources to 20%;

Solar 350 (formerly Carbon 350 Direct Limited) was formed in June 2011. The company is linked via its personnel to Carbon 350 Ltd. Carbon 350 was formed in 2008 and went on successfully to broker and/or Executive Develop 214 Carbon Abatement / Green Energy Projects with an aggregate Capex of in excess of €1

5 Grue og Hornstrup A/S is the full Danish Company name.

The English translation is Grue and Hornstrup A/s.

In this document, we use G+H to refer to Grue og Hornstrup A/s.

6 http://www.g-h.dk/uk/profile.html

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1. EXECUTIVE SUMMARY (Cont.)

Solar 350’s objective is to install 20MW of Solar Power in Romania in 2013 and 100MW of Solar Power in 2014 and each subsequent year. Our country focus is not limited to Romania. However, we have selected Romania because of a number of factors:

billion. (Executive Development being the identification, due diligence, accreditation, development and subsequent sale of assets created through carbon abatement projects).

The objective of Solar 350 is to develop and commercialise projects for the benefit of the company’s shareholders. SOLAR 350 aims to exploit the commercial potential for solar energy generation in countries that exhibit favorable characteristics for solar energy generation. These characteristics are defined below.

> Romania’s day time electricity price averages circa €55 per MWh, and peaks at over €70 during the peak hours of the day7. This is a relatively high energy price. The electricity market in Romania is deregulated and the market is traded via the OPCOM exchange. Thus, our output (electricity) can be sold at a relatively good price in a liquid market.

Significant subsidy available and stable sovereign credit rating

High Electricy Price

> Romania offers an EU Approved Subsidy Program8 though the issuance of Green Certificates for every MWh of electricity produced from renewable energy. The Green Certificate Program is running well and again is a liquid market. Thus our second output (Green Certificates), can be sold at a relatively high price in a liquid market. Once capacity is installed, the Green Certificate program runs for 15 years under the terms of the subsidy in the year of installation.

High levels of Solar irradiation Existing energy generation is highly carbon intensive

Low land and labour costs relative to other performance indicators

In September of last year (2012) Solar 350 signed a Memorandum of Understanding with Grue of Hornstrup5 A/S (“G+H”). G+H is an AA rated6 Danish engineering consultancy with extensive experience within renewable energy, environmental technologies, energy management and carbon abatement projects.

> Energy Generation in Romania is currently highly carbon intensive. Romania possesses huge resources of coal and thus historically, they have based their energy generation strategy on coal fired power stations. In order to comply with the EU legislation of 20% of energy generation coming from renewable means by 2020, and to achieve their own renewable energy targets, it is necessary that Romania increases it’s renewable energy installations significantly. In addition to this, any increase

Under this Memorandum of Understanding (MOU), G+H will act as Consulting Engineers on all Solar 350’s projects and will source and manage the acquisition and development of Solar Projects on behalf of Solar 350. G+H has agreed to defer their fees until Solar 350 is in a position to pay them. In February 2013, under the terms of the MOU, G+H purchased a 50% share in Solar 350 Ltd.

http://www.opcom.ro/pp/grafice_ip/raportPIPsiVolumTranzactionat.php?lang=en (daily prices by hour) http://europa.eu/rapid/press-release_IP-11-867_en.htm 9 http://www.gfmag.com/gdp-data-country-reports/194-romania-gdp-country-report.html#axzz2IpJ6rJxy 10 http://www.gfmag.com/gdp-data-country-reports/194-romania-gdp-country-report.html#axzz2IpJ6rJxy 7

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in the carbon price should increase the price of electricity in Romania significantly. This would not be the case in countries whose Renewables percentage capacity is higher. > Romania, while growing at 2.5% per annum9, with a BBB+ Stable Credit Rating and with unemployment at 7.2%10 and falling, still has relatively low land and labour costs. Hence, the costs to build and subsequently operate the installations will be relatively low relative to other factors. > In terms of Solar Irradiation, Romania is one of the preferred locations across Europe with 3.4 Hours of peak sunshine per day and up to between 14001500 KWh/m2 of sunlight. The United Kingdom, at its most southern point receives 1000-1100. > In addition to the above factors, which make the business case for Romanian Solar generation, Solar 350’s management have been active in Romania since 2010 through a branch office of Carbon 350 Ltd (Solar 350’s sister company) and G+H have been active in the Romanian Market since 1998.

Recent Developments Solar 350 has now identified 4 Solar Projects to acquire and commercialise. G&H are negotiating, on behalf of Solar 350 Ltd for the purchase of the rights to these projects. In addition to these projects we are completing due diligence on additional projects. These additional projects can be found in Section 9H of this document,

http://www.gfmag.com/gdp-data-country-reports/194-romania-gdp-country-report.html#axzz2IpJ6rJxy Please note: within this document we have assumed the GBP/EURO Currency Rate to be 1.16.

12 This is the anticipated level of mezzanine finance provided; 80% Mezzanine to 20% equity.

We have modelled 75% mezzanine to 25% equity in the financial illustration.

13 Please see Letter of Intent for mezzanine finance in Addendum Section.

We have also conducted discussions with a Chinese Solar Panel Manufacturer that is willing to provide both Solar Panels and project finance for the initial build of the projects (on the condition that an exit is provided to the manufacturer once the project is complete). The most likely source of these funds are from either Chinese banks or the Chinese Export Bank, which is rumored to have over €50 billion of financing capacity to assist in the promotion of Chinese industry. Within this document we have termed this “Mezzanine Finance”. A Letter of Intent from the Solar Panel Manufacturer can be found in Section 9P. We have removed reference to the actual supplier for obvious reasons.

We have also identified a number of European Banks that, once the project is completed and producing electricity, have indicated their potential interest to lend to the project, replacing the mezzanine finance provided by the Chinese Export Bank.

Lately, we have identified a European Lender who has offered to provide debt finance to the projects. In this case, the debt finance would be a single step approach where the lender lends to the project pre-build phase with the tenure of the loan being 10 years. The interest rate on this loan would be 8%. Details of this offer can be found in Section 9Q on page 82.

Returns Throughout this document we are basing our assumptions on utilizing a debt to equity ratio of 75/25. This has been confirmed by our potential lenders. Utilizing debt finance allows us to leverage the operations of the business significantly.

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In order to complete our objective of 20MW in 2013, in total, Solar 350 needs to sell 600,000 Shares (60% of Solar 350) at an average price of £13.20. A placement price of £13.20 when matched with 75% of debt finance creates an equity IRR of 28% and a ROI of 197%.

These figures are based on an exit strategy where the business is valued at the end of every year from year 3 to year 12 and each year Solar 350 offers to repurchase 10% of investor shares at the valuation level. We cannot guarantee we will adopt this strategy and it is in no way a predetermined exit yet it does provide a method of measurement for equity returns. In terms of actual exit strategy, Solar 350 objective is to list on an exchange within three years. Thus, this will provide investors with a suitable exit point should they wish for one.

SEIS and EIS investors will notice that they are paying a small premium to the average share price. This is because Solar 350 anticipates the majority of equity funding will come from institutional investors.

In terms of returns to the SEIS and EIS Investor, a placement price of £14.00 provides for an overall Return on Investment (ROI) of 136% before tax reliefs and tax benefits are taken into consideration. Please see pages 44 and 45 for SEIS and EIS financial illustrations.

It may be worth nothing that this calculation does not take into account the following: At 20MW of installed ca-

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pacity, after General & Administration Fees (15% of operating profit) and while servicing debt finance, Solar 350 generates circa £2M of free cash flow every year.

This free cash flow can be utilized to scale the operations of the company further. Based on our model within Romania; £2M of free cash flow reinvestment equates to a further 5MW of installed capacity each year.

Conversely, in the event that debt finance is not forthcoming, Solar 350 may consider issuing an additional 20% of equity to existing investors and financing with 100% equity. In this case, the equity ROI for investors before tax benefits are taken into account are 45.40%.

Future Plans Please note, Solar 350 reserves the rights to develop other renewable energy installations in addition to Solar in future years subject to the following: >

the additional development would enhance the commercial returns of a Solar site (for instance Wind+Solar combined) and, or;

>

the stakeholders have a successful record of development in the specific project type (for example Hydro Electric (350) or Biomass Combined Heat and Power (CHP) in the case of G+H.

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2. THE FIGHT AGAINST GLOBAL WARMING

The Intergovernmental Panel on Climate Change (IPCC) was formed by the United Nations in 1988 to prove the link between Green House Gas concentrations and global warming.

This chart details the increases in CO2 Concentrations over the last 50 years14:

temperatures. This would lead to changes in ecosystems, wild fires, droughts, increases in desert areas and increased precipitation, which in turn was expected to lead to freak weather events including hurricanes, tornadoes, and flooding.

Of serious concern is the increase in global temperatures through the erosion of the world’s ability to regulate its own temperature within predefined limits through: I. The erosion/destruction of carbon sinks (the forests and vegetation) through fire leading to further GHG emissions, leading to further global warming.

II. The oceans ability to absorb CO2 and the potential for temperature increases within the oceans resulting in methane releases from the sea bed, leading to further global warming.

III. Reductions in ice leading to increasing absorption of heat from the sun and less reflection of the sun’s rays back into the atmosphere, leading to further global warming.

Subsequently, the United Nations formed its climate change division, the UNFCCC (United Nations Framework Convention on Climate Change) to assist in the fight against Climate Change and assist poorer countries to adapt to the changes climate change will bring.

During the 1990’s global negotiations began to establish a global treaty in order to fight climate change and to deal with the anticipated effects of climate change, both from a humanitarian and economic point of view.

Greater concentrations of Green House Gases in the atmosphere were expected to result in increasing global

IV. Increased development and burning of fossil fuels.

However, the ultimate concern results from the melting of sea ice, the melting of the Greenland ice sheets (including the Arctic) and the melting of ice in Antarctica. For unknown reasons, increases in global temperature are especially pronounced at the top and bottom of the globe.

If the Greenland Ice Sheet melted, scientists estimate that sea level would rise about 6 meters (20 feet). If the Antarctic Ice Sheet melted, sea level would rise by about 60 meters (200 feet)15.

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15

http://www.esrl.noaa.gov/gmd/ccgg/trends/ National Snow and Ice Data Centre: http://nsidc.org/cryosphere/quickfacts/icesheets.html

This chart details Sea Level rise projections to 2100:

Past and projected global average sea level: The gray shaded area shows the estimates of sea level change from 1800 to 1870 when measurements are not available. The red line is a reconstruction of sea level change measured by tide gauges with the surrounding shaded area depicting the uncertainty. The green line shows sea level change as measured by satellite. The purple shaded area represents the range of model projections for a medium growth emissions scenario (IPCC SRES A1B). For reference 100mm is about 4 inches. Source: IPCC (2007) The Kyoto Protocol (including the Clean Development Mechanism) was adopted in 1997 and came into force in February 2005. As a result of the Kyoto Protocol, a few countries that had ratified the Protocol developed their own emission reductions frameworks. Europe took the lead and created the European Union Emissions Trading Scheme (The EU ETS) in 2005.

Today, the European Union Emissions Trading Scheme covers 15,000 polluting installations in Europe across the eight heavy industries. These industries account for approximately 60% of Europe’s emissions. Each one of these installations must monitor and verify its emissions every year and retire an equal number of Carbon Permits (EUAs – European Union Allowances) and/or EU ETS CER to those emissions. As a consequence, each year, the installations’ emissions are reduced.

In addition to the utilization of emissions market to reduce emissions, governments also laid down legislation to promote the development of renewable energy in line with the EU Directive of 20% of energy generation achieved through renewable means by 202017.

http://www.ipcc.ch/publications_and_data/ar4/wg1/en/faq-5-1-figure-1.html European Commission: http://ec.europa.eu/clima/policies/package/index_en.htm

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3. SOLAR 350 LTD

SOLAR 350 Ltd was formed in June 2011 (formerly Carbon 350 Direct Ltd) and is associated via its personnel with CARBON 350 Ltd. CARBON 350 is an Executive Project Developer of Green Energy Projects. Both companies share the same office at 22 Hanover Square, London, W1S 1JP. CARBON 350 was formed in 2008 and gained Advanced Assurance18 under the Enterprise Investment Scheme from HMRC in January 2009. Subsequently, CARBON 350 raised approximately £78,000 and began trading in 2009. CARBON 350 has brokered and/or Executive Developed 21 Clean Development Mechanism19 (CDM) Projects.

These projects are due to produce approximately 44 Million United Nations Certified Emission Reductions (CERs) between 2012 and 2034 resulting in success fees for Carbon 350 of between €3.9M and €26M dependent on price of the asset on the day of delivery.

Although Carbon 350 does not own any of the underlying projects itself, the approximate capex of all projects is in excess of €1 Billion.

Carbon 350 has acted as Broker (1st two projects) and Executive Developer on the following Clean Development Mechanism Projects:

Annual Emission Reductions

Initial Crediting period

Emissions Reductions Initial Crediting Period

Total Emissions Reductions

Status

Municipal Solid Waste based Composting at Kolhapur, Maharashtra

30430

7

213010

639030

OPERATIONAL & REGISTERED

Anning River Wa’nao Hydropower Station in Xichang City Liangshan Prefecture

116684

10

1166840

1166840

OPERATIONAL & REGISTERED

Pengshui County Xiamakou Hydropower Project

35894

7

251258

753774

UNSUBMITTED

Kuanping 1st Level and Kuanping 2nd Level Bundle Small Hydropower Project

11246

7

78722

236166

OPERATIONAL & REGISTERED

Fang County Wafangping 2nd Level Hydropower Project

56179

7

393253

1179759

OPERATIONAL & REGISTERED

Yulong County Gezihe 1st Level and Gezihe 2nd Level Bundle Hydropoewr Project

40647

7

284529

853587

OPERATIONAL & REGISTERED

Yongping County Dawantang 2nd Level Hydropower Project

22697

7

158879

476637

OPERATIONAL & REGISTERED

Yongping County Dawantang 1st Level Hydropower Project

63116

7

441812

1325436

OPERATIONAL & REGISTERED

Yunnan Yongde County Dedanghe 3rd Cascade Hydropower Project

48463

7

339241

1017723

OPERATIONAL & REGISTERED

Yunnan Yongde County Manglinghe 2nd and 3rd Cascade Bundled Small Hydropower Project

35130

7

245910

737730

OPERATIONAL & REGISTERED

Yunnan Yongde County Manghaihe 6th and 7th Cascade Bundled Small Hydropower Project

33966

7

237762

713286

OPERATIONAL & REGISTERED

Taizhou Municipal Solid Waste Power Generation

104217

7

729519

2188557

OPERATIONAL & REGISTERED

Shantou Municipal Solid Waste Power Generation

92087

10

920870

920870

OPERATIONAL & REGISTERED

Jinshan Municipal Solid Waste Power Generation

98129

10

981290

981290

UNSUBMITTED

Guangxi Jinyuan Methane Recovery Project

197,172

10

1971720

1971720

OPERATIONAL & REGISTERED

Guangxi Heng County Methane Recovery Project

98,812

10

988120

988120

OPERATIONAL & REGISTERED

Rural Eco-energy Project of Henan Hengyou Husbandry Development Co., Ltd

166,546

7

1165822

3497466

OPERATIONAL & REGISTERED

Sichuan Da County Jiujietan Hydropower Project

131,078

7

917546

6422822

OPERATIONAL & REGISTERED

Xingjiang Aletai Kesaiyi hydropower project

257,532

7

1802724

12619068

OPERATIONAL & REGISTERED

Qinghai Xining Calcium Carbide Residue Utilization for Clinker Production Project

239607

10

2396070

2396070

DEVELOPMENT

Hebei Yuaishi Huaiyang Biomass Coproduction

145227

7

1016589

3049767

DEVELOPMENT

Project Name

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Please see Letter of Advanced Assurance of SEIS from HMRC in addendum section of document. http://unfccc.int/kyoto_protocol/mechanisms/clean_development_mechanism/items/2718.php

3.1 GRUE OG HORNSTRUP A/S

SOLAR 350 has commissioned Grue og Hornstrup A/S20, a Danish Engineering company to act as Consulting Engineers on all Solar Farms developed by SOLAR 350. Grue og Hornstrup has purchased a 50% shareholding in SOLAR 350 Ltd. Grue og Hornstrup A/S was one of the first engineering consultancies to provide tailor-made services to the environmental markets. Since 2001 G+H has directly participated in the development and implementation of over 30 green projects (including CDM/ JI) and has provided customized Post Implementation engineering and monitoring services to more than 20 operational green projects from Asia to Eastern Europe. Grue + Hornstrup have been active in the Romanian Market since 1998 and have completed a number of industrial scale projects including the following:

Sawdust 2000 is a €13M investment into the establishment of biomass central heating plants and district heating systems in five towns in western Romania. The projects were developed

by Grue + Hornstrup during the years from 2000 to 2004.

G+H is involved in monitoring the operational quality of the projects.

Geothermal in Oradea & Beus is a €5M investment into the establishment of geothermal based central heating plants and district heating systems in two towns in western Romania. The projects were developed by Grue + Hornstrup during the years from 2002 to 2004. G+H is involved in monitoring the operational quality of the projects.

Solar Power in Holstebro is a €1.9M investment by the Holstebro Municipality in Denmark for grid connected Solar Power installation in public buildings. Grue + Hornstrup are responsible for the concept design, tender, and engineering supervision of the entire project which includes over a dozen different installations.

Grue og Hornstrup A/S is the full Danish Company name. The English translation is Grue and Hornstrup A/s. In this document, we use G+H to refer to Grue og Hornstrup A/s.

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3.2 SOLAR 350 LTD BOARD

Nick Dimmock Managing Director Nick has a BA Honours Degree in Business Science and a Masters of Business Administration from CASS Business School. From 1996-2001, Nick worked as a foreign exchange broker and subsequently as a stockbroker, finishing his stock broking career as an institutional equity salesperson at Raymond James in 2002. In 2003, Nick became a founding member of Azure Films Plc which executive produced a number of feature films and TV Series. Nick completed his Executive MBA at Cass Business School London in 2007 and sold out of the film business in 2008.

Post MBA, Nick joined Tullet Prebon‘s emissions trading desk and subsequently founded CARBON 350 LTD in 2008. Carbon 350 has Executive Developed 21 Carbon Abatement Projects with aggregate Capex of over €1 Billion.

Douglas A. Marett Non Executive Director, Solar 350 Ltd Douglas is a Partner at Grue + Hornstrup and head of the company’s Energy & Environment Group. He has a decade of experience with project development, design, implementation, and due diligence of renewable energy and environmental projects predominately in Europe and Asia. Douglas has since 2003 worked on the development and implementation of Grue + Hornstrup‘s projects in Romania which include operational biomass, geothermal, and energy efficiency projects.

Douglas has a Msc from the Technical University of Denmark, and a BSc from Clemson University in USA. In 2009 Douglas was awarded the “Young Consultant of the Year” award by the Danish Association of Consulting Engineers, and one of “Top 100 Talents” in Denmark by Berlingske News Magazine.

John Nicol Chairman of Solar 350 Ltd John began his working life as an Electronics Design Engineer. In 1972 he founded Norbain Electronics Ltd. The company was taken public via the USM in 1984 and over the next decade became the largest distributor of CCTV in Europe and one of the largest manufacturers in the UK. When John sold his interests in 1996, the company was capitalised at £60m, was fully listed, employed some 600 people and he was the Chairman with a 30% shareholding.

Since then he has been involved in several start up SME’s in various fields including mining in Zambia. John was a founding member of Carbon 350 in 2008 and has served as Chairman of Carbon 350 since this date.

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David Burns Non-Executive Director, Solar 350 Ltd David is a Finance professional (MCT, FCCA, DipIoD), with a background in major industrial companies which includes twenty years’ experience with Shell, BASF, Basell Polyolefins and Lyondell Basell Industries. As Project Finance Manager at Shell he designed key parts of the launch of Knightsbridge Tankers on NASDAQ in 1997; other highlights included the creation of the Treasury function as Group Treasurer for the Elenac carveout from Shell and BASF from 1997 to 2000, and Chief Audit Executive for Basell from 2000 to 2007.

At Solar 350, drawing on his strong background in internal controls for international companies, David’s role as Senior Independent Director will be to represent the interests of those equity investors who are not involved in the day-to-day direction of the Company.

Tessa Laws, Non Executive Director, Solar 350 Ltd Tessa is a fully qualified lawyer. After a distinguished career at Rosenblatts, Tessa set up New Laws Legal in 2010. New Laws Legal is a full service law firm authorised and regulated by the Solicitors Regulation Authority.

The practice is run by Tessa Laws as a sole practitioner and gives corporate and commercial legal advice to individuals and businesses. Tessa has been active in the Renewables field since 2008 and also organises the New Energy Awards at the Natural History Museum.

Tessa has assisted in the development of 200MW of Wind and 40MW of Solar Power and has worked as Carbon 350’s legal council since 2012.

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3.3 ADDITIONAL tEAM mEMBERS

Bill Goldie Head of Procurement and Mezzanine Finance at Solar 350 Ltd. In 1994 Bill became the General Manager of Ingram Electronics (part of Beales Hunter Plc) and was responsible for setting up ‘mirror’ manufacturing partners in China. In 1996 he was promoted to Managing Director and in 1998 the company was bought by Stadium Plc. In 1999 he was promoted to divisional MD running the Power and automotive facilities in the South of England and managing the Asia based supply chain and manufacturing partnerships. In 2002 he completed his MBA at Canterbury University and left Stadium to set up a company with his previous group Managing Director called Anglo China Strategies Ltd. From 2003 to 2010 his major focus was assisting a UK company called Retronix set up a China facility in Tianjin setting up further facilities in Zhuhai and Shenzhen.

Bill joined Carbon 350 in January 2010, and brought with him his team from China.

Bill is responsible for procurement of solar based equipment, mezzanine and equity finance from China.

Doru Laslau Commercial Manager, Romania Having graduated in Marketing and International Economics from the University of Bucharest, Doru started his career with TNT in 2004 within Integrated Logistics. Doru then progressed from TNT to Mobius and then onto Schenker in 2008 gaining stature in each organisation.

Doru joined Carbon 350 in 2009 and has assisted with the development of Carbon 350 Romanian operations since this time. Doru has been working with Solar 350 since September 2012 and is assisting in the operation of the Romanian Businesses and the sales of electricity and green certificates produced by the solar farms.

Please note that we have agreed in principal contract terms with a further individual in regard to assisting with the operations of the Solar Farms in Romania. As we are negotiating the contract and these negotiations are not concluded we cannot disclose identities and background.

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3.4 CORPORATE PARTICIPANTS PROJECT DEVELOPER

SOLAR 350 LTD 22 Hanover Square London. W1S 1JP United Kingdom

COMMERCIAL LAWYERS TO THE PROJECT PARTICIPANT

NEW LAWS LEGAL 21 Arlington Street, London. SW1A 1RN, United Kingdom

CONSULTING ENGINEERS

GRUE OG HORNSTRUP A/S Nupark 51 – DK-7500 Holstebro Denmark

ACCOUNTANTS TO THE PROJECT PARTICIPANT

POMFREY & CO LTD Unit 42/ The Old Coach House Bexley, DA5 1LU United Kingdom

CORPORATE FINANCIERS

CASSLEY GROUP LTD Level 17, Dashwood House 69 Old Broad Street, London, EC2M 1QS United Kingdom

LAWYERS IN ROMANIA

MUSCAT & ASOCIATII 43 Aviatorilor Blvd., 1st District, Code 011853, Bucharest.

Romania

3.5 ORGANISATIONAL STRUCTURE foR 2013 Below is the organisation structure that we will create in 2013. It is most likely that this structure will be replicated around the world in countries where Solar 350 chooses to develop solar power installations.

SOLAR 350 Ltd UNITED KINGDOM

GRUE OG HORNSTRUP A/S (ENGINEERING)

SOLAR 350 PROJECT SPV 1

SOLAR 350 PROJECT SPV 2

SOLAR 350 PROJECT SPV 3

SOLAR 350 PROJECT SPV 4

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3.6 STAKEHOLDERS & STAKEHOLDERS AGREEMENTS

G+H originally approached Carbon 350 in regard to Solar Power generation in Romania in May 2012. Both companies then agreed via a Memorandum of Understanding to develop the business through a specific Special Purpose Vehicle. This was created from a dormant company that had never traded or become operational, namely Carbon 350 Direct Ltd. A name change then occurred and Carbon 350 Direct became Solar 350 Ltd.

the UK business with whatever was left being paid to Management as a form of success fee. Thus, Solar 350’s Management objectives would be aligned to the shareholders of the company, in that they would be incentivised to grow the scale and profitability of the business while reducing costs where possible. A breakdown of the 2014 G&A fee (15% of operating profit) can be in Section 9N on page 80.

The full details of the Memorandum of Understanding can be seen in the addendum section (9F). However, key clauses were as follows:

> In this way, G+H’s objectives would be to carry out the engineering necessary for the business to become operational and would be fully aligned with the objectives of the shareholders. Solar 350’s objectives would be to grow the scale and profitability of the business which again would be fully aligned with the objectives of the shareholders. Please note, Solar 350’s management would not have access to the free cash flow generated from the business and thus this should be considered shareholders funds for dividends or expansion of the business.

> Solar 350’s management and G+H would own 50% of the business each pre outside investment. > G+H would charge fees in accordance with the standard agreement from the International Federation of Consulting Engineers (FIDIC), but would not charge fees until the company had funds available. > Solar 350 Management would not take salaries from the business (with the exception of David Burns, who would act as a Senior Independent Non Executive Director specifically representing the rights of outside shareholders). Instead, Solar 350’s Management would levy a 15% charge against operational profit of the business (this would become known as the the General and Administrative (G&A) Expense).

This charge would cover all operational aspects of

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> In addition to the operational objectives as detailed above, due to the restrictions on payments of both Solar 350’s management and G+H, both stakeholders objectives would be fully aligned with shareholders objectives in terms of the potential generation of capital gains which may be available from selling individual projects after they are operational and established.

3.7 timeline

Week No

Week starting

Action

1

01/04/2013

2

08/04/2013

Source Projects, Source Debt Finance and Institutional Equity

3

15/04/2013

Source Projects, Source Debt Finance and Institutional Equity

4

22/04/2013

Source Projects, Source Debt Finance and Institutional Equity

5

29/04/2013

Source Projects, Source Debt Finance and Institutional Equity

6

06/05/2013

Finalise Institutional Equity Finalise Institutional Equity

Finalise EIS and Institutional Information Memorandum.

7

13/05/2013

8

20/05/2013

Finalise Institutional Equity

9

27/05/2013

Finalise Institutional Equity

10

03/06/2013

Order Equipment

11

10/06/2013

Order Equipment

12

17/06/2013

Order Equipment

13

24/06/2013

Order Equipment

14

01/07/2013

Build: Build may occur on multiple sites through multiple contractors.

15

08/07/2013

Build: Build may occur on multiple sites through multiple contractors.

16

15/07/2013

Build: Build may occur on multiple sites through multiple contractors.

17

22/07/2013

Build: Build may occur on multiple sites through multiple contractors.

18

29/07/2013

Build: Build may occur on multiple sites through multiple contractors.

19

05/08/2013

Build: Build may occur on multiple sites through multiple contractors.

20

12/08/2013

Build: Build may occur on multiple sites through multiple contractors.

21

19/08/2013

Build: Build may occur on multiple sites through multiple contractors.

22

26/08/2013

Build: Build may occur on multiple sites through multiple contractors.

23

02/09/2013

Build: Build may occur on multiple sites through multiple contractors.

24

09/09/2013

Build: Build may occur on multiple sites through multiple contractors.

25

16/09/2013

Build: Build may occur on multiple sites through multiple contractors.

26

23/09/2013

Build: Build may occur on multiple sites through multiple contractors.

27

30/09/2013

Build: Build may occur on multiple sites through multiple contractors.

28

07/10/2013

Build: Build may occur on multiple sites through multiple contractors.

29

14/10/2013

Build: Build may occur on multiple sites through multiple contractors.

30

21/10/2013

Build: Build may occur on multiple sites through multiple contractors.

31

28/10/2013

Connect to Grid

32

04/11/2013

Connect to Grid

33

11/11/2013

Connect to Grid

34

18/11/2013

Connect to Grid

35

25/11/2013

Gain Final Licenses

36

02/12/2013

Gain Final Licenses

37

09/12/2013

Gain Final Licenses

38

16/12/2013

Gain Final Licenses

39

23/12/2013

Sell Electricity and Green Certificates

40

30/12/2013

Sell Electricity and Green Certificates

Page 19

4. THE RENEWABLE ENERGY MARKET As the global economies grow and energy demands increase, the existing dominance of fossil fuels in the energy generation sector is becoming increasingly unsustainable. In addition, there has been a growing consensus that the reduction of carbon emissions is vital to avoid the risk of climate change.

These factors have brought about significant political momentum to encourage energy generation from renewable sources, presenting an opportunity for companies and investors to participate in the emerging ‘green economy’. This is anticipated to show rapid growth as the world shifts to new models of energy generation.

A commitment to support the shift to renewable energy has been made by the majority of OECD countries.

The form of regulatory and policy support varies from measures such as caps on industrial emissions to price support mechanisms to stimulate capital investment in renewable energy infrastructure. Early adopters of price support mechanisms such as Germany and Spain have been followed more widely by OECD countries with the UK introducing a renewable obligation regime in 2002 and a FiT (Feed In Tariff) regime in 2010.

Such price support mechanisms were designed to build capacity in the renewable energy sector in the relevant

market and they were intended to be incrementally reduced as costs in the supply chain reduced such that Renewable Energy Projects required less regulatory price support to compete with traditional electricity generation.

The UK price support regimes, like Germany and other OECD price support regimes, have been successful in stimulating capacity growth in the renewable energy sector and the UK has been able to reduce the level of price support (particularly the high initial level of FiT for certain technologies). However, other OECD countries that were not able to mobilize capital at the rate the UK was still offer very significant subsidies.

Global investment in clean energy grew to $243 billion in 2010 – over a 30% increase from 2009 levels of $186 billion21. Significant further investment in renewable energy infrastructure is required, however, to deliver the optimum mix of global energy supply to reduce the dependence on fossil fuel and achieve a more affordable and secure distribution of energy.

It is forecast that the total value of renewable energy projects across the globe could reach $395 billion by 202022, with Europe remaining as one of the biggest markets for money spent on renewable energy projects for the next three years.

4.1 SOLAR PHOTOVOLTAIC TECHNOLOGY Solar Photovoltaic is a method of converting the power of solar radiation into electrical power using semi-conducting materials such as crystalline silicon.

These semi-conductors are typically arranged into cells which are assembled into panels to protect cells from the elements. The capacity of Solar PV technology is usually referred to in Watts-Peak (Wp), which is the maximum output of solar panels. For larger installations the terms kilo Watts-Peak (kWp) or mega Watts-Peak (MWp) are used.

Solar PV technology is well developed, long lasting and comes with high performance level guarantees. Operational risk is relatively low as there are few moving parts.

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&sqi=2&ved=0CEUQFjAD&url=http%3A%2F%2Fbnef.com%2FDownload%2Fpressr eleases%2F134%2Fpdffile%2F&ei=AO0sUdrMIcex0AXU8YC4BA&usg=AFQjCNGXreTMmH4hAGNOdcu05cuJdaaNrw&sig2=5I_OVUQR-L-r94P1ANAtvg http://www.bloomberg.com/news/2011-11-16/clean-energy-investment-may-double-to-395-billion-by-2020.html

21

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A series of linked panels mounted on the ground or on a roof, make up the solar installation. The panels produce direct current electricity and so an inverter is connected to the system to convert the power coming from the panels into alternating current power which can then be utilized by the Grid.

22

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4.2 SOLAR DESIGN PROVIDED BY GRUE AND HORNSTRUP A/S

SOLAR 350 is acquiring Solar Power Projects in the following stages of Development. > Late Stage Projects which are “shovel ready” with all licence and constriction permits, including grid connection rights and off-take agreement Certificate/FiT agreements. > Medium Stage Project with land rights, initial engineering, have started the licence and constriction permit applications. > Early Stage Project with only land rights, but close to viable grid connection points.

SOLAR 350 will utilise G+H’s “Centralised Design Concepts” to develop the sites through:

Construction Format

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MultiPanel Systems:

Central Inverter Concept

Ensured Access & Security

2 – 3 layer mounted

Multiple 1000k Units

Viable multi access roads

Galvanised Steel Structure

Lower electricity losses

Access maintenance lanes

Sigma Post of Ballast Mount

Better maintenance solution

Perimeter security fencing

Single grid connection

24 Hour CCTV security

4.3 SOLAR PROJECT DUE DILIGENCE

All commercial due diligence on potential project sites is being carried out by G+H. > G+H has a 15 year history of performing Due Diligence and more in-depth feasibility studies worldwide. > Typical clients are governments, energy companies, financial institutions, industry... (exp. Danish Energy Agency, Deutsche Bank, NEFCO, Vattenfall etc). > Level 1 - To evaluate the general project potential and determine whether the project meets the basic needs/demands of the client (a screening step). > Level 2 - To evaluate the project from a technology and output point of view, and assess any evident counter party or regulation problems. Thus the basis for deciding on and preparing offers or decisions to proceed with initial agreements. > Level 3 - To ensure that the client knows as much about the project and counterpart as possible. To determine in detail the technical and output quality of the project, and full evaluation of the counterparty and reputational risk, plus legal ownership and stages of projects under regulations.

G+H carries out due diligence on projects every year. The following represents due diligence performed by G+H over the last 10 years.

Project Type

Level 1

Level 2

Level 3

Biogas-Fugitive (CH4) Abatement

20+

20+

5+

Biogas to Energy

15+

15+

10+

Biomass to Energy

15+

15+

10+

Solar Power

20+

20+

10+

Energy Efficiency in Cement Industry

5+

5+

2

Coal Bed Methane to Power

2

1

1

Energy Efficiency in Power Generation

7

7

4

Energy Efficiency Other Industries

5+

5+

4

Hydro Power (<20MW)

5+

5+

2

Hydro Power (>20MW)

5+

5+

0

Landfill Gas Abatement

20+

15+

10+

Industrial Emissions Abatement

40+

20+

20+

Wind Power

20+

20+

3

Geothermal Energy

10+

10+

2

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4.4 SOLAR PROJECTS UNDERGOING DUE DILIGENCE

23

2.1 MW Solar Project

Completed

Next Steps

> 2.10 MWp PV power installation > 2,215 MWh generation per year > 4.0 ha land > Connection point to 20 kVA step-up station (2.5 km)

Authentication capabilities for connecting to the PV Plant Ownership of land

X

X (25%)

X (75%)

Engineering Design

X

Certicate de Urbanism

X

CEZ Notice and request for reservation - AA

X

Study of connectivity and temporary authorizationâ&#x20AC;&#x201C; ATR

X

Removing the land from agricultural land (urban)

X

Planning permission (PUZ) & Building permits

X

Pay ATR Fee

X

Implementation of PV Plant

X

License for electricity production RES and Qualification Certificate - ANRE

X

Registration of seller of elec and green certificates - OPCOM

x

> Estimated time for commissioning = 10-11 months

Please note: additional projects under consideration and project budgets are listed in Sections 9H and 9K of this document.

23

Page 24

1.23 MW Solar Project

Completed

Next Steps

> 1.23 MWp PV power installation > 1,298 MWh generation per year > 2.8 ha land > Connection point to 20 kVA step-up station > Estimated time for commissioning = Operational now

Authentication capabilities for connecting to the PV Plant

X

Ownership of land

X

Engineering Design

X

Certicate de Urbanism

X

CEZ Notice and request for reservation - AA

X

Study of connectivity and temporary authorizationâ&#x20AC;&#x201C; ATR

X

Removing the land from agricultural land (urban)

X

Planning permission (PUZ) & Building permits

X

Pay ATR Fee

X

Implementation of PV Plant

X

License for electricity production RES and Qualification Certificate - ANRE

X

Registration of seller of elec and green certificates - OPCOM

X

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4.4 SOLAR PROJECTS UNDERGOING DUE DILIGENCE (Cont.)

2.4 MW Solar Project

Completed

Next Steps

> 2.4 MWp PV power installation > 2,480 MWh generation per year

Authentication capabilities for

X

connecting to the PV Plant

> 4.5 ha land

Ownership of land

X

> Connection point to 20 kVA step-up station

Engineering Design

X

> Estimated time for commissioning = 5-6 months

Certicate de Urbanism

X

CEZ Notice and request for reservation

X

- AA Study of connectivity and temporary

X

authorizationâ&#x20AC;&#x201C; ATR Removing the land from agricultural

X

land (urban) Planning permission (PUZ)

X

& Building permits Pay ATR Fee

X

Implementation of PV Plant

X

License for electricity production RES

X

and Qualification Certificate - ANRE Registration of seller of elec and green certificates - OPCOM

Page 26

X

4 MW Solar Project

Completed

Next Steps

> 4.0 MWp PV power installation > 1,298 MWh generation per year

Authentication capabilities for connecting to the PV Plant

X

Ownership of land

X

Engineering Design

X

Certicate de Urbanism

X

CEZ Notice and request for reservation - AA

X

Study of connectivity and temporary authorizationâ&#x20AC;&#x201C; ATR

X

Removing the land from agricultural land (urban)

X

Planning permission (PUZ) & Building permits

X

> 4.5 ha land > Connection point to 20 kVA step-up station > Estimated time for commissioning = 6-7 months

Pay ATR Fee

X

Implementation of PV Plant

X

License for electricity production RES and Qualification Certificate - ANRE

X

Registration of seller of elec and green certificates - OPCOM

X

Page 27

5. KEY PERFORMANCE INDICATORS24

Within this section we examine the ingredients of the key performance indicators of Solar Power as defined below with specific reference to Romania.

These are defined by way of a schematic right.

Significant subsidy available and stable sovereign credit rating

High Electricy Price

High levels of Solar irradiation Existing energy generation is highly carbon intensive

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Low land and labour costs relative to other performance indicators

5.1. SOLAR IRRADIATION

Because of its position on the south-eastern portion of the European continent, Romania has a climate which ranges from temperate to continental. Climatic conditions are somewhat modified by the country’s varied topography.

The Carpathians serve as a barrier to Atlantic air masses, limiting their oceanic influences to the west and centre of the country (Transilvania, Banat and Maramureş), which have milder winters and heavier rainfalls as a result.

The mountains also block the continental influences of the vast plain to the north in the Ukraine, which results in frosty winters and less rain to the south and southeast.

In the extreme southeast, Black Sea influences offer a milder, maritime climate.

The solar power generation potential in Romania is one of the higher levels in Europe. The average daily solar power generation potential is between 3.2 and 3.4 kWh/

As evident from the above, Romania receives relative high levels of Solar Irradiation, with the southern states benefitting the most.

Information within this section is sourced from Grue and Hornstrup A/s White Paper – Understanding Solar Power Investments in Romania. This can be found at http://www.g-h.dk/files/ manager/nyheder/120904_12860_understanding%20solar%20power%20investments%20 in%20romania.pdf In turn, their sources are made up of the following: Musat & Asociatii, ”Energy” Chapter 23 www.opcom.ro “Company” ANRE “The Energy Sector in Romania, Present and Future” April 2012 Total gross electricity generation - Eurostat ANRE ”Report on Results of Monitoring the Romanian Electricity Market December 2011” Renewable energy for final energy consumption - Eurostat “Energy Road Map 2050”, COM(2011) 885 Final

ANRE “The Energy Sector in Romania, Present and Future” April 2012 ANRE “The Energy Sector in Romania, Present and Future” April 2012 www.opcom.ro “Green Certificates issued…” July 2012 Emergency Ordinance no. 88/2011 Green Certificates issued, traded on centralized market and on bilateral market” 29th August 2012, OPCOM Transelectria “Certificate verzi pentru luna 7 anul 2012” 29.08.2012 “Photovoltaic Barometer” April 2010 & April 2012 Transelectria “Certificate verzi pentru luna 7 anul 2012” 29.08.2012 “South-East European PV Market Review” Sep 2012 see-industry.com and IBCOENERG “Planned Project in Romania Solar PV Market” May 2012 “Doing Business” The World Bank and International Finance Corporation, 2012

24

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5.1 SolaR IRRADIATION (Cont.)

5.2 RENEWABLE ENERGY SUBSIDIES

kWp in Romania depending on location, in comparison to London, UK with 3.0 kWh/kWp and Copenhagen, Denmark with 2.8 kWh/kWp.

“The European Union’s Climate and Energy” package is a set of binding legislation which aims to ensure the European Union meets its ambitious climate and energy targets for 2020. These targets, known as the “20-20-20” targets, set three key objectives for 2020:

The radiation reaching the earth’s surface can be represented in a number of different ways. Global Horizontal Irradiance (GHI) is the total amount of shortwave radiation received from above by a surface horizontal to the ground. This value is of particular interest to photovoltaic installations and includes both Direct Normal Irradiance (DNI) and Diffuse Horizontal Irradiance (DIF).

> A 20% reduction in EU greenhouse gas emissions from 1990 levels; > Raising the share of EU energy consumption produced from renewable resources to 20%; > A 20% improvement in the EU’s energy efficiency.

DNI is solar radiation that comes in a straight line from the direction of the sun at its current position in the sky. DIF is solar radiation that does not arrive on a direct path from the sun, but has been scattered by molecules and particles in the atmosphere and comes equally from all directions.

A commitment to support the shift to renewable energy has now been made by the majority of OECD countries.

The form of regulatory and policy support varies from measures such as caps on industrial emissions to price support mechanisms to stimulate capital investment in renewable energy infrastructure”25.

On a clear day, most of the solar radiation received by a horizontal surface will be DNI, while on a cloudy day most will be DIF.

Point 2 within this directive has forced European States to develop market based mechanisms to ensure they achieve this target.

For the purposes of a Solar Farm, average annual sunshine dictates the amount of energy that can be generated from solar photo voltaic panels.

Within the United Kingdom, the government implemented Feed In Tariffs (which it subsequently withdrew for Solar and Renewable Energy Certificates (REC). These can be traded between renewable energy providers and incumbent energy providers, such that a coal based Farm can through purchasing the appropriate amount of renewable energy certificates and subsequently sub-

The previous chart show the average annual amount of Solar Irradiation in kWh/m2 reaching Romania.

25

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http://ec.europa.eu/clima/policies/package/index_en.htm

mitting them to their energy regulator can be seen, by proxy to have produced 20% of its energy through renewable means.

Each European State has developed its own Renewable Energy Strategy.

Type

GC / MWh

Time (yrs)

0.5 - 3

3 - 15

1-2

15

2 – 3 (+1)

15

Biogas & Landfill gas

1

15

Geothermal

2

15

Solar

6

15

Small Hydro (<10MW)26 Wind Energy27 Biomass28

5.21 Romanian Green Certificate Scheme The Green Certificate (“GC”) program in Romania was established under Law 220/2008, with amendments in 2010 and 2011, and endorsed by the European Commission in July 2011. Law 220/2008 took full legal effect in Romania in October 2011. Law 220/2008 applies to specific project based renewable energy installations offering GCs for a defined time span, and for the following renewable energy technologies.

New beneficiaries may enter the GC scheme until the 31st December 2016, and this is currently interpreted as specific installations generating electric power by the date with all approvals in place.

The revised Law 220/2008 sets a mandatory quota allocation starting at 10% in 2011 and up to 20% in 2020, with an approximate 1% raise annually. This quota is based on the GCs issued per MWh of final consumption of energy in a given year. ANRE estimates the actual percentage to be 11% in 2012, This approximately corresponds with currently available information issued by OPCOM.

The range is dependent on if the small-hydro plant is new (receiving 15 years and 3 GCs) or its existing age (receiving as low as 3 years and 0.5 GCs).

For new wind power receiving 2 GCs until 2017 and 1 GC from 2018 28 New power generation, with +1 GC for high efficiency cogeneration

Table 2: Green Certificate allocation scheme and time frame by project type

A driving legal force of Law 220/2008 is that each supplier as well as each producer which has the obligation to purchase GCs, must meet their portion of the mandatory national quota for purchasing GCs, otherwise face a fine of 110 EURs per non-purchased GC. ANRE is the authority who regulates the number of GCs each supplier and producer must purchase each year.

The GC allocation may be adjusted by ANRE in individual cases where they receive investment aid, or in the broad case that producers using a technology are achieving a higher IRR exceeding 10% of the benchmark set by ANRE and taking effect at the start of each year.

26

27

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5.2 Renewable EneRgy SubsiDies (Cont.)

5.23 The Value of Green Certificates OPCOM effectively administers the centralized (clearing exchange) and bilateral trading of GCs. Under Law 220/2008 the GCs can fluctuate under a trading market mechanism with a legally set price band of 27 EUR/GC (min.) and 55 EUR/GC (max.).

The price is indexed on an annual basis based on inflation within EuroStat. The GC trading market is for the time being restricted to Romanian suppliers and producers, however Law 220/2008 allows for an opened door of trading within a future harmonized inter-EU Green Certificate system. Up to 80% of GCs trade on a bilateral basis, with the remaining traded on the centralized market at OPCOM.

5.24 The Volatility of Green Certificates There is little risk that Law 220/2008 will be revoked or revised in the future, as it is also endorsed by the Euro-

Chart Detailing Price and Volume of Green Certificates during 2011

pean Commission as a part of Romania’s obligation to meet EU and national renewable energy goals. Should the current Law stay as is, there is foreseen to be a major swing in supply (downward) in 2018 when GCs from wind power are cut in half. GCs from wind power currently make up 74% of the supply. Future supply of Green Certificates will thus depend on new capacity entering the Green Certificate Scheme.

5.3 ELECTRICITY PRICES The wholesale price of electricity in Romania fluctuates based on base, peak, and off-peak loads.

Trading in 2012 (Jan. to Sep.) via OPCOM indicates that daily base load prices (hrs 1-24) ranged from 45 to 73 EURs/MWh, with peak load (hrs 7-22) prices ranging from 60 to 82 EURs/MWh. As Romania’s power markets are relatively reliant on coal power generation, due to its abundance in Romania, it is anticipated that Romania’s electricity price will be especially affected by any increase in the carbon price charged as part of the European Unions Emissions Trading Scheme (The EU ETS).

This price per permit to pollute sits at circa €529 per ton of CO2 emitted. This offers little incentive for energy generators to reduce their emissions. It is anticipated that for a fully effective market, prices should be closer to €50 per ton.

Figure 2: Electricity Price Romania (OPCOM 2012) Based on Coal Fired PowerStations producing 95030 Grams of CO2 per KWh and thus 0.95 tons CO2 per MWh, any change in the carbon price can essentially be added directly to the existing electricity price. Thus a Carbon Price of €50 per ton would increase the electricity price to €100MWh (€55 existing electricity price+50 new carbon price-5 existing carbon price).

Point Carbon: http://www.pointcarbon.com/ We have rounded 950 grams CO2 to 1000, due to generally inefficient production of electricity in Romania.

29

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30

5.4 CURRENT ENERGY GENERATION

Electricity in Romania is primarily generated from thermal power plants (coal, natural gas, and oil), with the balance of production from hydroelectric facilities and a recently commissioned nuclear power plant.

Romania began to deregulate its power sector in 1998 from a state owned system; regulations in the early years were followed by substantial changes in 2006 and 2007. The current liberalized market is under primary regulation by the National Authority of Energy Regulation (“ANRE”) and the National Authority for Regulation of Public Community Services (“ANRSC”).

In 2000 the electricity administrator Romanian Power Market Operator (“OPCOM”) was established and cur-

rently ensures the impartial viability of wholesale trading within the Romanian market. Romania has a generation capacity exceeding 20 GW, and a gross electricity generation of 60.6 TWh (Tera Watt Hour) in 2010. In 2011 the amount of renewable electricity dispatched to the national grid was 27.9%.

5.41 Romanian National Renewable Energy Strategy In the EU Renewables Directive (2009/28/EC) Romania has pledged a target of 24% renewable energy for final energy consumption. In 2010 Romania achieved 23.4%.

At the national level the Romanian energy strategy for the period of 2007-2020 (and revised to 2035), as approved by the Government Decision No 1069/2007, establishes the level of national targets concerning the shares of electricity generated from renewable energy sources in the final consumption of electricity at 35% (2015) and 38% (2020). Romania’s national targets correspond to the long term strategy of the EU Commission’s Energy Roadmap 2050 which reflects a renewable energy share of 55-75% in gross final energy consumption, and to 97% in electricity consumption.

When addressing the Romanian national target for renewable energy sources in final consumption for 2020 and the actual renewable energy generation in 2011, Romania will need to increase such renewable energy generation by 35% by the end of 2020.

Figure 1: Electricity Delivered by Generators by source – 2011

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The Romanian national strategy has anticipated the following levels of new installed power generation capacity for renewable energy as indicated below.

6. MITIGATION OF SOLAR RISKS31

GW

2010 2015 2020 2025 2030 2035

Wind

0.56

3.20

4.00 4.50 4.80 5.00

Biomass

0

0.34

0.46 0.52

Solar

0

0.15

0.26 0.32 0.40 0.49

Hydro

6.46

6.78

7.05

7.32

0.56 0.58

7.59

7.86

Table 1: RE-Power Capacity (National Strategy)

This need and perspective to increase the share of renewable energy generated in Romania is one of the main drivers of the Romanian Green Certificate regulation.

5.5 LAND AND LABOUR COSTS While Romania is currently growing at 2.5% per annum in terms of GDP, has a sovereign credit rating of BBB+ Stable and unemployment is 6.7% and falling, labour costs are still very low relative to the rest of Europe.

Land prices however, have been increasing of late according to local reports.

There are several identified risks related to investing in solar power projects in Romania, and the majority of these risks can be mitigated as follows: > According to “Doing Business” Romania ranks in the top 35% of countries in starting a new business, and the top 40% in ease of business. Business risk can be mitigated by working with companies with a long history in the Romanian renewable energy sector who operate at the level of international standards. > Monitoring and Reporting under the Green Certificate Scheme is comprehensive and on a monthly basis, thus it is important to have professional and experienced local management and oversight. > There is a deadline of participating in the GC scheme by the end of 2016, therefore it is recommended that any solar project investment start by the end of 2015 to allow for permitting and project implementation. ADD: Target for 2013 is that funds are ready for deployment by mid June 2013. > ANRE may adjust GC issuance impacting investor returns in the future, but will not remove an installation without cause. A positive note is that in 2012 ANRE has not adjusted the GC allocation for solar power. In the case of any future adjustment then the expected impact on investment is an IRR of no lower than 12.7%. > Currently the GC trading market is still gaining traction, and ANRE’s regulation of GC quota obligations of power producers is also developing. This means that the next year or two may have high volatility in trading volume.

Information within this section is sourced from Grue and Hornstrup A/s White Paper – Understanding Solar Power Investments in Romania. This can be found at http://www.g-h.dk/files/manager/nyheder/120904_12860_understanding%20solar%20power%20investments%20in%20romania.pdf

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7. FINANCIALS The Solar Farms will produce two saleable assets: > Electricity

> Green Certificates

We anticipate selling the electricity on a weekly basis to ensure we maximise prices in a market where we believe risk is to the upside.

In regard to Green Certificates, we anticipate selling these by forward contract for the whole 15 years, subject to being able to agree reasonably commercial terms.

7.1 Valuation Solar 350’s is currently owned by Solar 350’s Management and Board (50.34%), Grue og Hornstrup A/S (46.83%) (collectively, the “operators”) and SEIS 1 Investors (2.83%).

Solar 350’s management and Grue og Hornstrup A/S have invested approximately £180,000 in the business to achieve the current level of development across all projects. In addition, SEIS 1 Investors have invested approximately £43,600 in the business. Our target is now to increase equity involvement by bringing in new equity investors (the “investors”).

Within this document as per the details on the front cover, Solar 350 are offering 350,000 shares priced at

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7.1 Valuation (cont.) £14 for a total of £4.9M. In addition, Solar 350 is raising a further £2.8M of equity through other sources for a combined capex deployed equity raise of £7.5M. When combined with debt at a ratio of 75/25 this would then provide the Solar 350 with project development capabilities to the value of £30M.

Please note:

The value of Solar 350 once 20MW is installed is estimated to be circa £36 Million based on a discount rate of 5%. Even though our current cost of capital is 8%, we anticipate issuing a Solar 350 Bond in the near future to refinance all the projects at a lower rate and add additional capacity. The interest rate on this bond is anticipated to be 5%.

> Grue og Hornstrup A/S have built in 8.5% of project cost contingencies into the project development budget.

Deloitte Touche Tohmatsu Limited, within their report of August 2011; Valuing Solar Farm Developers34, places an average metric on Solar Farm Developers of Enterprise Value (millions) / MW of 4.2 times. This means that they value each MW of installed capacity at €4.2 Million or circa £3.6 Million. Based on this metric and 20MW of installed capacity, the Enterprise Value of Solar 350 would be 20*3.6 Million = £72 Million.

32 Please note: within this document we have assumed the GBP/EURO Currency Rate to be 1.16. Thus, £12.39, (our target average share price) is shown in the financial illustration at €14.38. This is £12.39*1.16 = €14.38.

33 Shovel Ready is a term used to define when projects are actually ready to start building.

> The financial illustration and cash flow detailed in the following sections does not take into account additional capacity that can be added through utilizing the free cash flows generated by the business.

> All figures within the Sections 7 and 8 are denominated in Euros. > Although actual amounts may differ in terms of the financial illustration and actual cash flows of the business in practice the Directors believe the financial illustration and cash flow as detailed in this section are representative of the business given current legislation.

Valuing Solar Farm Developers, Deloitte: http://oportunidades.deloitte.cl/marketing/ Web/Energia-solar.pdf Warren Buffett to build world’s largest solar power project: http://www.telegraph.co.uk/ finance/newsbysector/energy/9777016/Warren-Buffett-to-build-worlds-largest-solar-energy-project.html 34

35

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7.2 FINANCIAL ILLUSTRATION

The table below is a financial illustration of the anticipated operations of Solar 350 from the development of 20MW of solar capacity in 2013. Please note, all figures in this section are in Euros.

20 MW SOLAR CAPACITY The Solar Farms:

Financed Via:

Area (m2)

400,000

Location

ROMANIA

Capacity in kW

3.40

Power System Losses

15% 21,097,000

Capex & Maintanence: Investment Costs in Euro/kW Total investment O & M Costs in Euro/MW

25.00%

Debt Funding

75.00%

20,000

Peak sun hours/day (average)

Electricity Generation kWh/yr

Equity

1,750 35,000,000

Summary: Equity

8,750,000

Loan

26,250,000

Capex

35,000,000

Loan Interest

8%

Loan payback

10

Loan Repayments PA

3,912,024

60,000 Share Valuation Entry:

Electricity & Subsidy Prices: Electricity sales price in Euro/MW

55

Assumed Annual increase

0.00%

Green Certificate Per MW

6

Green Certificate Sales Price in Euro/MW

55

Assumed Annual Increase

Initial Funding

9,187,500

Float Pre Funding

400,000

Share Float Post Funding

1,000,000

Of which: Investor Shares

600,000

Price Per Share Euro

15.31

0.00% Anticipated Returns:

Shares & Ownership:

Equity IRR

Solar 350 Management

20.00%

Grue & Hornstrup A/S

20.00%

Investors

60.00%

Check

100.00%

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28.05%

Total Cash Returned to Investors

23,054,132

NPV of Investor Cashflows Received

11,704,707

Undiscounted Return on Investment

150.93%

Discounted Return on Investment

27.40%

Guide Notes per Section: The Solar Farms: Area relates to land required. Capacity detailed in Kilo Watts: kilowatts*peak sun hours, less power system losses = electricity generation capacity.

Capex & Maintenance: Capital Expenditure; how much the project costs are to build per kw. Multiply this with the capacity on this project as detailed in Solar Farms line 3, and this is overall project cost. O&M is ongoing operations, security and maintenance of the farms.

Electricity and Subsidy: These are the outputs; electricity and green certificates.

Shares and Ownership: Details of shareholdings post equity raise which would include both SEIS, EIS and subsequent institutional funding.

Financed Via: Equity or Debt; what are the percentages of both utilized in the company.

Summary: Equity plus Debt = Capex. Capex figure matches our Total Investment in The Capex and Maintenance Section. Then loan interest and a calculation for complete payback after 10 years.

Share Valuation Entry: This takes the initial funding required plus cost of equity, divides this figure by new shares for investors and gives us a price per share in Euros. Please note, this figure in Euros is the average price we need to attain for complete financing of 20MW. Anticipated Returns: Equity IRR is the internal rate of return achieved by the equity portion of the project. Total Cash Returned to Investors is the sum of all cash flows received by investors, based on company valuation and repurchase of investors equity over 10 years from year 3 onwards.. NPV of Investor Cash Flows received discounts cash flows received by investor to give a value today. Undiscounted Return on Investment, details total returns to investors. Discounted Return on Investment uses the discounted value of investorâ&#x20AC;&#x2122;s cash flow to create a Return on Investment today.

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7.3 SOLAR 350 CASHFLOW ILLUSTRATION

The table below is a cash flow illustration of operations of Solar 350 from the development of Solar Farms in 2013. Debt finance is not detailed though repayment of debt is, and is based on the repayment of capital and interest over 10 years.

Year

Electricity Production kWh

Electricity & Green Certificate Revenue

Build, Loan Repayment & Maintenance

Operating Cash Flow*

General & Administrative Costs (G&A)**

2013

0

0

-8,750,000

-8,750,000

-437,500

-9,187,500

2014

21,097,000

8,122,345

-5,112,024

3,010,321

-451,548

2,558,773

2015

20,886,030

8,041,122

-5,100,024

2,941,097

-441,165

2,499,933

2016

20,677,170

7,960,710

-5,088,144

2,872,566

-430,885

2,441,681

2017

20,470,398

7,881,103

-5,076,383

2,804,720

-420,708

2,384,012

2018

20,265,694

7,802,292

-5,064,739

2,737,553

-410,633

2,326,920

2019

20,063,037

7,724,269

-5,053,212

2,671,057

-400,659

2,270,399

2020

19,862,407

7,647,027

-5,041,800

2,605,226

-390,784

2,214,442

2021

19,663,783

7,570,556

-5,030,502

2,540,054

-381,008

2,159,046

2022

19,467,145

7,494,851

-5,019,318

2,475,533

-371,330

2,104,203

2023

19,272,473

7,419,902

-5,008,245

2,411,657

-361,749

2,049,909

2024

19,079,749

7,345,703

-1,085,258

6,260,445

-939,067

5,321,378

2025

18,888,951

7,272,246

-1,074,406

6,197,840

-929,676

5,268,164

2026

18,700,062

7,199,524

-1,063,662

6,135,862

-920,379

5,215,483

2027

18,513,061

7,127,528

-1,053,025

6,074,503

-911,175

5,163,328

2028

18,327,930

7,056,253

-1,042,495

6,013,758

-902,064

13,861,694

Plus asset value after depreciation (in 2028)

Free Cash Flow***

8,750,000

Please note: a)

We have assumed no reinvestment of free cashflows for additional projects.

b)

General and Administrative (G&A) Costs set at maximum of: 15.00%

c)

Asset value after depreciation based on 20% depreciation per annum.

d)

Discount Rate used for Discounted Return on Investment 8%

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* Please note: In 2013 only, Operating Cash Flow details the equity capex of the projects ** Please note: In 2013 only, G&A costs stated relate to additional start up costs. *** Please note: In 2013, Free Cash Flow relates to the equity capex plus start up costs.

7.3 SOLAR 350 CASHFLOW ILLUSTRATION Guide Notes per Section > Electricity Production KWh: is total electricity produced based on the installation detailed on previous page for each year. > Electricity and Green Certificate Revenue: is the total income derived from the quantity of electricity produced multiplied by the output prices as detailed in Electricity & Subsidy detailed in the financial illustration. > Build, Loan Repayment and Maintenance: is a deduction from revenue in the previous box. > Operating Cash Flow: is the revenue less build, repayment and maintenance. > General and Administrative (G&A) Costs: are the other operating costs of the business, including notably management team salaries and bonuses in the UK as well as legal and professional fees. > Free Cash Flow: is the free cash flow generated when build, loan, maintenance and G&A costs are deducted from the revenues generated from electricity and green certificates.

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7.4 NOTES ON ILLUSTRATION AND CASHFLOW FORECAST

i.

ii.

iii.

Within the financial illustration, we have chosen to illustrate General and Administrative (G&A) costs with a maximum 15% charge against Operating Cash flow. G&A as defined here, includes all costs other than build, interest, loan repayments, and operations of the farms. This will include the costs of managing the company in London, including fees, commissions and performance-related pay. Detailed budgets inevitably involve assumptions for each item. The total will effectively be subsidised by the fact that until the company becomes operational, costs are being born by the operators. The maximum 15% charge is in our view a conservative assessment which allows ample room for contingencies. The Audit and Risk Committee will be charged with scrutinising the management of total G&A cost. The G&A cost in year 1 is 5%.

vi.

Within the financial illustration, we have assumed 20MW of installed Solar Power in 2013. The Directors of Solar 350 have analysed all opportunities being presented by Grue and Hornstrup and believe that, subject to financing, this is easily achievable.

ix. Within the financial illustration, we have assumed the interest on the debt to be 8% on a 10 year loan. x.

Within the cash flow forecast, we have not assumed that we are able to carry forward corporation tax losses from the 1st year of operations.

Within the financial illustration, we have assumed a investment CAPEX cost of 1,750 €/kw. This figure is intentionally high and accounts for the additional costs that may be encountered from purchasing “semi developed” Solar Farms. “Semi Developed” Solar Farms is a term used to describe sites that already have most of the required licenses but require further development before they are “shovel ready”.

xi.

Within the cash flow forecast, we have not assumed that we will reinvest the free cash flow into additional capacity or development of additional sites. We can however confirm that the free cash flow will be used to either grow the business or pay dividends or repurchase investor shares. It will not be used to pay salaries or bonuses or other payments in kind.

iv. Within the financial illustration, we have assumed no increase or decrease in the electricity price from December 2012 levels. v.

Within the financial illustration, we have assumed no increase or decrease in the price of the subsidy; green certificates.

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Within the financial illustration we have illustrated the returns to the investor based on the repurchase of 1/10th of investor shares each year for 10 years starting in year 3. There are no guarantees this will happen and this is not a predetermined exit, however, the Directors are keen to repurchase investor shares where free cash flow of the business allows it.

vii. We have assumed a discount rate for equity investors of 8%. We believe this is a high value for stable infrastructure projects. viii. Within the financial illustration, we have assumed the proportion of debt to equity that we will utilize to finance the projects. No specific and detailed arrangements for debt or equity funding are currently in place. However, it is the Directors belief that funding in this manner will be available to the company.

xii. Within the cash flow forecast, in 2028, we have assumed an asset valuation based on depreciation of 20%, but discounted back to today. In reality, we anticipate the assets to be worth considerably more than this figure; however it is difficult to foresee what the future value will be as we do not know the electricity price at this time.

8.

SEIS TAX RELIEFS

36

Solar 350 Ltd has received Advanced Assurance from HMRC in regard to its Status as an SEIS/EIS company. Confirmation of this can be found in Section 9U of this document. This provides the following: > Income Tax Relief: Investors can claim back income tax of 50% of the amount invested up to a maximum of £100,000. > Capital Gains Tax Relief: Provided the SEIS investment is held for more than three years, any gain on sale is free from capital gains tax. > Capital Gains Reinvestment Relief (only for tax year 2012/2013): If an investor has an existing capital gains liability and he invests the capital gains in an SEIS

qualifying investment, there will be no capital gains to pay on the original investment (that generated the capital gain in the first place). Of course the investor will still benefit from the Capital Gains Tax Relief from the SEIS as detailed above.

With the potential for 78% tax relief in the first year, (50% income tax, 28% capital gains tax exemption relief on existing tax liabilities) and loss relief for 50% of the investment at investor marginal rate, SEIS investments are designed to be attractive to potential investors. A basic illustration of investor returns incorporating SEIS Reliefs is detailed below: Please note: The Share Price detailed below (€16.24) is equivalent to £14.00 as detailed on the front cover.

SEIS Investor Financial Illustration: All figures detailed in Euros.

Year

Shares Purchased / Sold

Price 16.24

Investment Cash Flows

Income Tax Rebate

CGT Exemption

-8120.00

Summary Cash Flows

Capital In

-8120.00

-8120.00

Positive Cashflows

25545.38

4060.00

Gain

17425.38

2273.60

ROI

214.60%

2013

500

2014

0

2015

0

2016

-50

27.51

1375.50

1375.50

2017

-50

29.01

1450.49

1450.49

2018

-50

30.76

1537.88

1537.88

2019

-50

32.81

1640.56

1640.56

2020

-50

35.25

1762.31

1762.31

2021

-50

38.17

1908.26

1908.26

2022

-50

41.71

2085.46

2085.46

2023

-50

46.08

2303.89

2303.89

2024

-50

51.56

2578.20

2578.20

2025

-50

51.38

2569.23

2569.23

4060.00 2273.60

Summary:

Please note, the above calculations are based on the investor utilising CGT Exemptions on SEIS. all FIGURES IN EUROS

http://www.hmrc.gov.uk/seedeis/background.htm

36

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8.1. EIS TAX RELIEFS37

Solar 350 Ltd has received Advanced Assurance from HMRC in regard to its Status as an SEIS/EIS company.

Confirmation of this can be found in Section 9U of this document. This provides the following: > Income Tax Relief: 30% income tax relief on the amount invested provided that the shares are held for a minimum of three years. The maximum amount on which investors may obtain income tax relief in any tax year is ÂŁ1 million. > Capital Gains Tax: CGT Exemption on capital gains realised on the disposal of an EIS investment, provided that the shares have been held for at least three years.

> Capital Gains Tax (CGT) Deferral from gains on other investments: Providing the EIS investment is made in the period beginning 12 months before and ending 3 years after the date of the disposal of the asset which is subject to CGT. > Loss Relief: In the event of a capital loss on the EIS investment, the loss (less any reliefs already obtained can be set against capital gains of that tax year or a later tax year, or against income of that tax year or the preceding tax year. > Inheritance Tax (IHT): Exemption providing the shares have been held for at least two years and are held at the time of death.

EIS Investor Financial Illustration: All figures detailed in Euros.

Year

37

Shares Purchased / Sold

Price

Income Tax Rebate

-8120.00

Summary Cash Flows

2013

500

2014

0

2015

0

2016

-50

27.51

1375.50

1375.50

2017

-50

29.01

1450.49

1450.49

2018

-50

30.76

1537.88

1537.88

2019

-50

32.81

1640.56

1640.56

2020

-50

35.25

1762.31

1762.31

2021

-50

38.17

1908.26

1908.26

2022

-50

41.71

2085.46

2085.46

2023

-50

46.08

2303.89

2303.89

2024

-50

51.56

2578.20

2578.20

2025

-50

51.38

2569.23

2569.23

http://www.hmrc.gov.uk/eis/index.htm

16.24

Investment Cash Flows

-8120.00 2436.00

2436.00 0.00

Summary: Capital In

-8120.00

Positive Cashflows

21647.78

Gain

13527.78

ROI

166.60%

Please note, the above calculations due not model the benefits of Capital Gains Reliefs on entry or exit..

ALL FIGURES IN EUROS

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8.2 FURTHER INFORMATION ON TAX RELIEF

It has recently become apparent to the government and HMRC that individuals were using EIS and SEIS funds solely for the purpose of tax mitigation.

The schemes under scrutiny are characterized by low risk, low return vehicles whose only benefit seems to be the reclamation of individuals tax, financial gain for the structuring company and intermediary and which provide no benefit to the UK economy or government.

Investors considering these types of SEIS and EIS schemes need to be aware that EIS and SEIS were designed to encourage investments in riskier companies, offering tax relief to mitigate the higher associated risks.

Ultimately, it was anticipated that SEIS and EIS companies would provide more employment within the UK and Eu-

rope and additional tax revenues for the UK government.

In order to counter such tax avoidance, s.178 of the 2007 Act provides that “The relevant shares must be issued for genuine commercial reasons and not as part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.

Clearly, Solar 350 is a fully commercial company, which will trade indefinitely and grow its operations just as Carbon 350 has. Thus, the tax relief offered, while being a significant incentive does not provide the sole motivation for the investor.

Shares from Private Limited Companies are also eligible for inclusion with Self Invest Pension Plans under HMRC rules.

8.3 SUITABILITY This opportunity would be suitable for UK taxpaying investors who want direct access to the fast growing renewable energy sector, have a higher tolerance of risk, are looking for a medium term investment and whose personal circumstances allow them to take advantage of the SEIS/EIS reliefs, such that they are able to benefit from the income tax relief and/or defer capital gains. For example: > An investor who wishes to claim back income tax rebate of 50% (SEIS) / 30% (EIS) of his investment. > An investor wishing to gain an exemption from a taxable capital gain (SEIS).

> An investor, who wishes all gains to be free from capital gains tax (SEIS/EIS) > An investor, who wishes his investment to be free from inheritance tax (EIS) > An investor who is happy to hold their investment for at least 3 years and does not expect an income from the investment over this time.

There are of course other combinations relevant to investor’s individual circumstances.

8.4 CORPORATE GOVERNANCE All executive directors as well as the majority of nonexecutive directors are due to receive success fees and commissions based on results as opposed to basic salaries. We believe that this will provide the right basis for results focus.

At the same time, there will be at least one non-executive director who will not take part in any share option or performance-related pay scheme. We believe this

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will provide the right basis for corporate governance based on independent scrutiny at board level by the Company’s Audit and Risk Committee.

The overall arrangement will where relevant be in line with best practice guidance applicable to listed companies in the UK (currently set out in the Corporate Governance Code published by the FRC), adapted to the unlisted status of Solar 350 Ltd at the present time.

9. ADDENDUM anD suppoRting infoRmation A. Certificate of Incorporation

CERTIFICATE OF INCORPORATION OF A PRIVATE LIMITED COMPANY

Company Number. 7678367 The Registrar of Companies for England and Wales, hereby certifies that CARBON 350 DIRECT LIMITED

is this day incorporated under the Companies Act 2006 as a private company, that the company is limited by shares, and the situation of its registered office is in England and Wales.

Given at Companies House, Cardiff, on 22nd June 2011.

The above information was communicated by electronic means and authenticated by the Registrar of Companies under section 1115 of the Companies Act 2006

1

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

B. Certificate of Incorporation of Change of Name

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

C. Financial Information on Solar 350 Ltd Solar 350 is a newly formed company.

As of 5th April, Solar 350 has had physical investment of circa £43,000.

As of 1st March Solar 350 has received “sweat equity” in lieu of shares awarded as detailed below from Solar 350 Management. Thus Solar 350 has paid for this benefit and nothing more is due.

Name

Position

Hours

Value per hour

Total Contribution

Nicholas Dimmock

Managing Director

960

100

£96,000

William Goldie

Procurement Manager

120

100

£12,000

Larry Luo

Procurement (China)

40

50

£2,000

Daniel Ken

Procurement (China)

20

50

£1,000

Doru Laslau

Electricity/GC Sales (RO)

40

50

£2,000

Ric Hallikeri

Project Acquisitions (RO)

20

50

£1,000

John Nicol

Chairman

60

250

£15,000

David Burns

Non Executive Director

60

250

£15,000

Tessa Laws

Non Executive Director

40

250

£10,000

Expenses

£2,250

£156,250

As of 1st March, the following billable contribution has been made by Grue and Hornstrup A/s. Under Solar 350’s MOU with G+H, this amount will be paid when Solar 350 has funds to pay.

Name

Position

Hours

Value per hour

Total Contribution

Douglas Marett

Head of E&E Group

255

107

£21,400

Thomas Bosse

Engineer, E&E Group

57

80

£4,560

Managing Director

4

114

£456

32

40

£1,280

40

45

£1,800

Lars Grue Dennis Rasmusen Mihai Brasoveanu

Expenses

Development Consultant (Romania) Operations Manager (Romania)

£3,250

£32,746

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

D. Shareholders and Shareholdings Pre Institutional Equity Raise

Pre SEIS, EIS and Institutional Placings Bill Goldie 10,000 Tessa Laws 20,000 John Nicol 20,000 Nick Dimmock 150,000 Grue and Hornstrup A/S 200,000 David Burns 15,000 Family and Friends SEIS 12,080

2.34% 4.68% 4.68% 35.12% 46.83% 3.51% 2.83%

427,080

100%

10,000 20,000 20,000 150,000 200,000 15,000 12,080 10,000 350,000 212,920

1.00% 2.00% 2.00% 15.00% 20.00% 1.50% 1.21% 1.00% 35.00% 21.29%

1,000,000

100%

E. Shareholders Post Equity Raise Post SEIS, EIS and Institutional Bill Goldie Tessa Laws John Nicol Nick Dimmock Grue og Hornstrup A/S David Burns SEIS 1 Investors SEIS 2+3 Investors EIS Investors Institutional Investors

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

F. Stakeholder Agreements a) Memorandum of Understanding

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

F. Stakeholder Agreements B) Particular Conditions

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

F. Stakeholder Agreements B) Particular Conditions

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

F. Stakeholder Agreements B) Particular Conditions

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

F. Stakeholder Agreements B) Particular Conditions

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

F. Stakeholder Agreements B) Particular Conditions

1

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2

Costs are based on a 3 MW Photovoltaic Power Plant. For any extra capacity in increments of 0-1 MW to be installed the Consultants will have an additional budget. Billing rates are provided in Annex A to this document

9. ADDENDUM anD suppoRting infoRmation (Cont.)

G. Additional References for Grue og Hornstrup A/s Below is a selection of approved references from G+H’s International Energy & Environmental Business Project Development Project Title Biomass Fuel Switch at Sapphire Finishing Mills Sector Focus on Waste Water, Energy Efficiency, and Renewable Energy Methane avoidance project at Colony Sugar Mills Ltd. Methane avoidance project at Abdullah Sugar Mills Ltd. Methane avoidance project at Pinnacle Distilleries Ltd. Methane avoidance project at Habib Sugar Mills Ltd. Permeate gas utilization project (200MWe) at Engro CO2 stripping at Engro Chemical Pakistan Limited Purge gas utilization at Engro Chemical Pakistan Limited

Host Country

Client

Status

Pakistan

Confidential

At Validation

Uganda

Confidential

Under Development

Pakistan

Confidential

At Validation

Pakistan

Confidential

Closed

Pakistan

Confidential

Closed

Pakistan

Confidential

Closed

Pakistan

Engro Energy

At Validation

Pakistan Pakistan

Engro Chemical Pakistan Limited Engro Chemical Pakistan Limited

Closed Closed

N2O abatement at Jinan Chemical Fertilizers (2)

China

Vitol S.A.

Registered and Currently Monitoring (410,000 t/yr)

N2O abatement at 10 fertilizer plants

China

Confidential

Registered (>5 Mio t/yr)

N2O Abatement Project at Feng XI

China

Vitol A.S.

Close

Czech Republic

Danish Energy Agency

Biomass Energy Romania

Romania

Danish Energy Agency

Geothermal energy in Oradea and Beius

Romania

Danish Energy Agency

Romania

Danish Energy Agency

Romania

Danish Energy Agency

Romania

Danish Energy Agency

Completed

Romania

Danish Energy Agency

Closed

Romania

Danish Energy Agency

Closed

Romania

Danish Energy Agency

Closed

Romania

Danish Energy Agency

Closed

Romania

Danish Energy Agency

Closed

Romania

Danish Energy Agency

Closed

Lovochemie N2O abatement from nitric acid

Energy efficiency improvement of the district heating system in Drobeta Turnu-Severin Energy efficiency improvement at Holboca CET Iasi II Power Station Landfill gas extraction and utilisation in Focsani Landfill gas extraction and utilisation in Tirgu Mures Landfill gas extraction and utilisation in Iasi Landfill gas extraction and utilisation in Suceava Landfill gas extraction and utilisation in Galati Landfill gas extraction and utilisation in Cluj Napoca Demand Side Energy Efficiency in Resita

Operational and Monitoring (500,000 t/yr) Operational and Monitoring (70,000 t/yr) Operational and Monitoring (20,000 t/yr) Operational and Monitoring (35,000 t/yr) Operational and Monitoring (25,000 t/yr)

Page 63

9. ADDENDUM anD suppoRting infoRmation (Cont.)

G. Additional References for Grue og Hornstrup A/s

Selected Post Implementation Services for monitoring and operation Project Title

Host Country

Timisoara Combined Heat and Power Rehabilitation project for CET SUD Location

Romania

South West Region fuel switch and Energy Efficiency

Russia

Status

China

Swedish Energy Agency Danish Energy Agency NEFCO NEFCO Danish Energy Agency Danish Energy Agency Danish Energy Agency Danish Energy Agency Vitol S.A.

Host Country

Client

Status

Ukraine

Confidential

Completed

Russia Russia Russia Russia

Confidential Confidential Confidential Confidential

Completed Completed Completed Completed

Ukraine

Confidential

Completed

GermanyÂ

Confidential

Completed

China China China Peru

Confidential Confidential Confidential Confidential

Completed Completed Completed Completed

Saudi Arabia

Confidential

Completed

Malaysia

Confidential

Completed

Malaysia

Confidential

Completed

China

Confidential

Completed

North Africa

Confidential

Completed

Russia

Confidential

Completed

Kirov Region fuel switch and Energy Efficiency Landfill gas utilization project

Russia Romania

Biomass Energy

Romania

Geothermal energy in Oradea and Beius

Romania

Energy efficiency improvement of the district heating system in Drobeta Turnu-Severin Energy efficiency improvement at Holboca CET Iasi II Power Station N2O abatement at Jinan Chemical Fertilizers (2)

Client

Romania Romania

Completed Completed Completed Completed Ongoing Ongoing Ongoing Ongoing Ongoing

Selected Due Diligence Project Title N2O Abatement JI Project at an Nitric Acid production facility (2) Large Scale Biomass Waste to Energy Project (2) Large Scale Biomass Waste to Energy Project Energy efficiency improvement Pulp and Paper Facility Waste heat recovery in Pulp and Paper facility N2O Abatement JI Project at an Nitric Acid production facility N2O Avoidance/ Destruction JI Project at Adipic Acid production Waste Heat Recovery in Cement Plant Raw Material Blending (E.E.) in Cement Plant Cole Mine Methane Utilization Small Scale Hydro Projects (2) Raw Material Blending and Waste Heat Recovery in Cement Plant Biomass Co-Generation in Palm Oil Sector (3) Biomass/Wastewater Aerobic Composting in Palm Oil Sector (7) N2O Abatement CDM Projects at an Nitric Acid production plants (4) N2O Abatement CDM Projects at Nitric Acid production facilities (2) Landfill gas recovery and utilization (3)

Page 64

9. ADDENDUM anD suppoRting infoRmation (Cont.)

H. Project Design and Project Slate

It is anticipated that the design of the solar projects will be in line with Grue and Hornstrupâ&#x20AC;&#x2DC;s centralized design concept as detailed in this document.

However, on the basis that Solar 350 will be purchasing some semi-developed sites, changing the design parameters may mean resubmitting the design proposals to the Romanian government. As Solar farms are relatively simple and gains from improved design are marginal, Solar 350 does not anticipate that it will utilize one design for all solar farms.

Thus, it is much more important to review the individual semi-developed solar farms, conduct appropriate due diligence and then select them on the basis their commercial and operational attributes.

In addition to the projects detailed in this Information Memorandum, we are currently progressing due diligence on the following projects.

5.45 MWp 4.86 MWp 54 MWp 2.4 MWp 5.0 MWp 7.0 MWp 7.0 MWp 9.0 MWp 3.1 MWp

shovel ready near shovel ready Shovel ready, but needs to be divided into smaller sites.

Shovel Ready Shovel Ready Shovel Ready Close to shovel ready Shovel ready Close to shovel ready

9. ADDENDUM anD suppoRting infoRmation (Cont.)

I. Solar Equipment

Solar 350 is currently in discussions with a number of equipment manufacturers. As technology has developed and proliferated throughout the world solar panels have increasingly become fungible commodity.

There are, of course variables such of size, build quality and to certain extents efficiency. So while there are equipment suppliers that should be avoided, the choice

of solar power provider is now more related to cost and business terms and other ancillary benefits that the panel manufacturer can provide.

Grue and Hornstrup are responsible for the decision on which panels to use.

9. ADDENDUM anD suppoRting infoRmation (Cont.)

J. Equipment Transport Assessment Solar 350 anticipates that the solar panels and mounts will either be sourced from China or Germany. This provides Solar 350 with either managing an over ground route directly from Germany or shipping from China

to Constanta in Romania and then managing the over ground route from there. G+H will be responsible for this section of the process.

Page 65

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings The following has been provided by G+H. Essentially, this demonstrates to increased economies of scale available from larger projects. Solar 350 base costs for development of 20MW is â&#x201A;Ź1.5M per MW of installed power. However, Solar 350 will endeavor to lower costs and increase efficiencies without decreasing the quality of the projects.

Page 66

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings A) 2.4MW Example Costings

Cost Breakdown

Project Details 2.4MW Example Project

Name Developer Owner Data of Costs Assessment

07/02/2013

Technical Parameters to Fill Out PV Plant Capacity Land Requirements Transmission line Access Roads Perimeter Roads

MW ha km m

m

2.40 4.00 2.8 200 500

Sheet A1 - Regulatory Costs Sheet A2 - Engineering Costs Sheet B1 - Mechanical Costs Sheet B2 - Mechanical Installation Costs Sheet C1 - Civil Works Costs Sheet D1 - Miscellaneous Costs

123300 133200 2366480 173620 177750

Total Project Costs

706964 Euro 3,681,314

Price Per MWp

1,533,881

Sheet A1 - Regulatory Costs Unit

Quantity Unit Cost

I ii iii iv v

Land Regulations (Processing & Application Fees) Environmental Impact Assessment Rezoning of Land (Certificate de Urbanism) Planning Permission Building Permits Purchase Price of Land

Ha Ha Ha Ha Ha

4 4 4 4 4

2000 1500 900 1500 8,000

Itemized Cost 8000 6000 3600 6000 32000

vi

Constructed Approval

Ha

4

1500

6000

I

61600

II

Electricity Regulations (Processing & Application Fees)

Unit

Quantity Unit Cost

i ii iii iv v

Authentication for connection to the grid Notice and request for capacity reservation (distributor) Study of Connectivity (ATR) Final Reservation Fees + Secured Connection Agreement (ATR) Licenses for electricity production from RES - ANRE

MW fee MW MW MW

2.40 1.00 2.40 2.40 2.40

3500 2500 2500 7500 3500

Itemized Cost 8400 2500 6000 18000 8400

vi

Qualification certificate of preferential production of electricity - ANRE

MW

2.40

3500

8400

vii viii

Registration as an Electricity seller at OPCOM Registration for Green Certificate trading at OPCOM

fee fee

1.00 1.00

5000 5000

5000 5000

61700 TOTAL Regulatory Costs 123,300

Page 67

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings

Sheet B1 - Mechanical Costs I

Power Transmission Side

Unit

Quantity Unit Cost

I ii iii iv

Transmission line (underground insulated line up to 15 kV) Transmission line marking & protection Switch boxes Breakers Electricity Meters

km km no. no.

2.8 2.8 2.0 2.0

27000 4500 12000 7000

Itemized Cost 75600 12600 24000 14000 126200

II

Inverter/Transformer and AC side Equipment

Unit

Quantity Unit Cost

i ii iii iv v

Combined Inverter/Transformer Station - Container (1 MW) Combined Inverter/Transformer Station - Container (0.5 MW) Internal site (coated) main DC cabling 350A Internal site (coated) main AC cabling 1000 kVA Line marking & protection

no. no. m m m

2 1 2400 1200 3600

186000 93000 12 15 3

Itemized Cost 372000 93000 28800 18000 10800

vi

SCADA control unit

no.

1

75000

75000 597600

III

Panels/Frames and DC side equipment

Unit

Quantity

Unit Cost

i ii iii iv v

Internal site (coated) main DC cabling 25A Lightening projection units Panels (250wp) Mounting frames Array boxes

m no.

Wp Wp no.

2640 240 2400000 2400000 24

12 35 0.5 0.11 3300

Itemized Cost 31680 8400 1200000 264000 79200

vi

Security CCTVâ&#x20AC;Śetc.

no.

1.0

40000

40000 1623280

IV

Control / Office Building

Unit

Quantity

Unit Cost

i ii iii iv

220/380 v installation in control building 45A Internal Lighting and heating units External lighting (150W) Low V cabling

no. no. no. m

1.0 4.0 3.0 300

15000 200 200 10

Itemized Cost 15000 800 600 3000

19400 TOTAL Mechanical Costs 2,366,480

Page 68

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings

Sheet B2 - Mechanical Installation Costs I

Power Transmission Side Int

Unit

Quantity Unit Cost

I ii iii

Transmission cables laying Connection of Switch boxes Breakers Elect Meters

man-days 84 man-days 4.0 man-days 4.0

150 250 250

Itemized Cost 12600 1000 1000 14600

II

Inverter/Transformer and AC side Equipment Int

Unit

Quantity Unit Cost

i ii iii iv v

Combined Inverter/Transformer Station Installation Internal site (coated) main DC cabling 350A w/ protection Internal site (coated) main AC cabling 1000 kVA w/ protection SCADA control unit Supplier commissioning engineer

man-days man-days man-days man-days man-days

30 48 24 5 10

250 150 150 250 1500

Itemized Cost 7500 7200 3600 1250 15000 34550

III

Panels/Frames and DC side equipment

Unit

Quantity

Unit Cost

i ii iii iv v

Internal site (coated) main DC cabling 25A w/ protection Lightening projection units Panels (250wp) Mounting frames Array boxes

man-days man-days man-days man-days man-days

53 48 96 192 24

150 150 150 150 250

Itemized Cost 7920 7200 14400 28800 6000

vi

Security CCTVâ&#x20AC;Śetc.

man-days 10.0

250

2500

vii

Rented Equipment (post ramming machine)

Lease-mon 7.2

7500

54000 120820

IV

Control / Office Building Int

Unit

Quantity

Unit Cost

i ii iii iv

220/380 v installation in control building 45A Internal Lighting and heating units External lighting (150W) Low V cabling

man-days man-days man-days man-days

3.0 5.0 3.0 6.0

250 250 250 150

TOTAL Mechanical Costs

Itemized Cost 750 1250 750 900 3650 173,620

Page 69

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings

Sheet C1 - Civil Works Costs I

Power Transmission Side Civil Works

Unit

Quantity

I

Transmission line trench and cover (<1.5m)

km

2.8

Unit Cost 12000

Itemized Cost 33600 33600

II

On Site Civil Works plus Installation

Unit

Quantity Unit Cost

i ii

m m

200 500

60 60

m

500

5

2500

iv v

Access Road - compaction and gravel for 40t trucks Perimeter Road - compaction and gravel for 40t trucks Perimeter Road - drainage trench - 50cmx50cm one side - w/ >0.25% slope (950m) Catchment basin for road (w/ livestock fence) Perimeter Fencing - steel

Itemized Cost 12000 30000

m3 m

100 800

35 10

3500 8000

vi

Perimeter main gate - steel

no.

1

3000

3000

iii

vii

Perimeter person gate

no.

1

750

750

viii

Level and compaction of land - w/ >0.25% slope

ha

4.00

10000

40000

ix

Seeding (grass) of land

ha

4.00

3000

12000

x

Control Building - 40’ Livable Container

no.

1

7500

7500

xi

Storage Building - 40’ Container

no.

1

3500

3500

xii

m2

300

15

4500

m

80

5

400

no.

5

750

3750

xv

Parking lot and internal road - compacted and gravel Parking lot and internal road - drainage - drainage trench - 30cmx30cm w/ >0.25% slope Lay down yard and Container Pads - compacted and gravel - for - 40’ containers Concrete Foundations for Inverter stations - 9x 7mx2.5m containers 18t

no.

3

1500

4500

xvi

Compacting land for Inverter stations - 9x 7mx2.5m containers 18t

no.

3

750

2250

xiii xiv

xvii

Housing containers lease during construction

no.

2

1500

3000

xviii

Sewage (20m sewage line, 30 leachate line, and septic tank 2000 l)

no.

1

3000

3000

TOTAL Civil Works Costs

Page 70

144150 177,750

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings

Sheet D1 - Miscellaneous Costs I

Msc

Unit

Quantity Unit Cost

i ii iii iv

Insurance During Construction Workers housing compensation RO Additional Equipment transport 40t trips Additional cost of Purchase of Project

no. no. no.

MW

1.0 24.0 30.0 2.4

31000 400 4000 100000

Itemized Cost 31000 9600 120000 240000 400600

II

Contingencies

Cost

Cont %

A1 A1 A2 A2 A2

Land Regulations (Processing & Application Fees) Electricity Regulations (Processing & Application Fees) Design Concept & Tendering Engineering (DK - Consultancy) Design Engineering (RO - Consultancy) Supervision Engineering to Commissioning (Consultancy)

61600 61700 43500 31200 58500

10% 10% 5% 10% 5%

Itemized Cost 6,160 6,170 2,175 3,120 2,925

B1

Power Transmission Side

126200

15%

18,930

B1

Inverter/Transformer and AC side Equipment

597600

5%

29,880

B1

Panels/Frames and DC side equipment

1623280

10%

162,328

B1

Control / Office Building

19400

10%

1,940

B2

Power Transmission Side Int

14600

15%

2,190

B2

Inverter/Transformer and AC side Equipment Int

34550

15%

5,183

B2

Panels/Frames and DC side equipment Int

120820

15%

18,123

B2

Control / Office Building Int

3650

15%

548

C1

Power Transmission Side Civil Works

33600

15%

5,040

C1

On Site Civil Works plus Installation

144150

15%

21,623

D1

Miscellaneous Costs

400600

5%

20,030

TOTAL Civil Works Costs

306,364 706,964

Page 71

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings B) 7.6MW Example

Project Details Name Developer Owner Data of Costs Assessment

7.6 MW Example Project

07/02/2013

Technical Parameters to Fill Out PV Plant Capacity Land Requirements Transmission line Access Roads Perimeter Roads

MW ha km m m

7.60 15.00 8.5 600 1000

Cost Breakdown Sheet A1 - Regulatory Costs Sheet A2 - Engineering Costs Sheet B1 - Mechanical Costs

399300 241100 7124270

Sheet B2 - Mechanical Installation Costs

494030

Sheet C1 - Civil Works Costs Sheet D1 - Miscellaneous Costs Total project Costs

481150 2121337 EURO 10,861,187

Price Per MWp

1,429,103

Page 72

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings B) 7.6MW Example

Sheet A1 - Regulatory Costs I

Land Regulations (Processing & Application Fees)

Unit

Quantity Unit Cost

i ii iii iv v vi

Environmental Impact Assessment Rezoning of Land (Certificate de Urbanism) Planning Permission Building Permits Purchase Price of Land Constructed Approval

Ha Ha Ha Ha Ha Ha

15 15 15 15 15 15

2000 1500 900 1500 8,000 1500

Itemized Cost 30000 22500 13500 22500 120000 22500 231000

II

Electricity Regulations (Processing & Application Fees)

Unit

Quantity Unit Cost

i ii iii iv v

Authentication for connection to the grid Notice and request for capacity reservation (distributor) Study of Connectivity (ATR) Final Reservation Fees + Secured Connection Agreement (ATR) Licenses for electricity production from RES - ANRE

MW fee MW MW MW

7.60 1.00 7.60 7.60 7.60

3500 2500 2500 7500 3500

Itemized Cost 26600 2500 19000 57000 26600

vi

Qualification certificate of preferential production of electricity - ANRE

MW

7.60

3500

26600

vii

Registration as an Electricity seller at OPCOM

fee

1.00

5000

5000

viii

Registration for Green Certificate trading at OPCOM

fee

1.00

5000

5000

168300 TOTAL Regulatory Costs 399,300

Page 73

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings B) 7.6MW Example

Sheet A2 - Engineering Costs I

Design Concept & Tendering Engineering (DK - Consultancy)

Unit

Quantity Unit Cost

i ii iii iv v

Project Sourcing PV Power Plant Concept Design Tender Dossiers and Evaluation for Civil Works Tender Dossiers and Evaluation for Mechanical Works Tender Dossiers and Evaluation for Major Equipment

MW no. no. no. no.

7.6 1.0 1.0 1.0 1.0

5000 4500 9000 9000 9000

Itemized Cost 38000 4500 9000 9000 9000

(Reimbursable costs included)

69500

II

Design Engineering (RO - Consultancy)

Unit

Quantity Unit Cost

i ii iii iv

Site Survey and layout Detailed Civil Works Design Detailed Mechanical Works Design Stamps and Approvals

Ha no. no. no.

15.00 1.00 1.00 1.00

1800 10500 10500 3000

Itemized Cost 27000 10500 10500 3000

(Reimbursable costs included)

51000

III

Supervision Engineering to Commissioning (Consultancy)

Unit

Quantity Unit Cost

i ii iii iv v

Startup Phase Civil Works Phase Mechanical Works Phase Commissioning Phase Additional (over 3 MW)

no. no. no. no. no.

1.0 1.0 1.0 1.0 4.6

9000 18000 18000 13500 13500

Itemized Cost 9000 18000 18000 13500 62100

(Reimbursable costs included)

TOTAL Engineering Costs

Page 74

120600 241,100

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings B) 7.6MW Example

Sheet B1 - Mechanical Costs I

Power Transmission Side

Unit

Quantity Unit Cost

i ii iii iv

Transmission line (underground insulated line up to 15 kV) Transmission line marking & protection Switch boxes Breakers Electricity Meters

km km no. no.

8.5 8.5 2.0 2.0

27000 4500 12000 7000

Itemized Cost 229500 38250 24000 14000 305750

II

Inverter/Transformer and AC side Equipment

Unit

Quantity Unit Cost

i ii iii iv v vi

Combined Inverter/Transformer Station - Container (1 MW) Combined Inverter/Transformer Station - Container (0.5 MW) Internal site (coated) main DC cabling 350A Internal site (coated) main AC cabling 1000 kVA Line marking & protection SCADA control unit

no. no. m. m m no.

7 2 7600 3800 11400 1

186000 93000 12 15 3 75000

Itemized Cost 1302000 186000 91200 57000 34200 75000 1745400

III

Panels/Frames and DC side equipment

Unit

Quantity Unit Cost

i ii iii iv v vi

Internal site (coated) main DC cabling 25A Lightening projection units Panels (250wp) Mounting frames Array boxes Security CCTVâ&#x20AC;Śetc.

m no.

Wp. Wp. no. no.

8360 760 7600000 7600000 76 1.0

12 35 0.5 0.11 3300 40000

Itemized Cost 100320 26600 3800000 836000 250800 40000 5053720

IV

Control / Office Building

Unit

Quantity Unit Cost

i ii

220/380 v installation in control building 45A Internal Lighting and heating units

no. no.

1.0 4.0

15000 200

Itemized Cost 15000 800

iii

External lighting (150W)

no.

3.0

200

600

iv

Low V cabling

m.

3O

10

3000

19400 TOTAL Mechanical Costs 7,124,270

Page 75

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings B) 7.6MW Example

Sheet B2 - Mechanical Installation Costs I

Power Transmission Side Int

Unit

Quantity Unit Cost

i ii iii

Transmission cables laying Connection of Switch boxes Breakers Elect Meters

man-days man-days man-days

255 4.0 4.0

150 250 250

Itemized Cost 38250 1000 1000 40250

II

Inverter/Transformer and AC side Equipment Int

Unit

Quantity Unit Cost

i ii iii iv v

Combined Inverter/Transformer Station Installation Internal site (coated) main DC cabling 350A w/ protection Internal site (coated) main AC cabling 1000 kVA w/ protection SCADA control unit Supplier commissioning engineer

man-days man-days man-days man-days man-days

90 152 76 5 10

250 150 150 150 1500

Itemized Cost 22500 22800 11400 1250 15000 72950

III

Panels/Frames and DC side equipment Int

Unit

Quantity Unit Cost

i ii iii iv v vi vii

Internal site (coated) main DC cabling 25A w/ protection Lightening projection units Panels (250wp) Mounting frames Array boxes Security CCTVâ&#x20AC;Śetc.

Rented Equipment (post ramming machine)

man-days man-days. man-days. man-days. man-days. man-days.

Lease-mon

167 152 304 608 76 10.0 22.8

150 150 150 150 250 250 7500

Itemized Cost 25080 22800 45600 91200 19000 2500 171000 377180

IV

Control / Office Building Int

Unit

Quantity Unit Cost

i ii iii iv

220/380 v installation in control building 45A Internal Lighting and heating units External lighting (150W) Low V cabling

man-days. man-days. man-days. man-days.

3.0 5.0 3.0 6.0

250 250 250 150

Itemized Cost 750 1250 750 900

3650 TOTAL Installation Mechanical Costs 494,030

Page 76

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings B) 7.6MW Example

Power Transmission Side Civil Works I

Power Transmission Side Int

Unit

Quantity Unit Cost

i

Transmission line trench and cover (<1.5m)

km

8.5

12000

Itemized Cost 102000 102000

II

On Site Civil Works plus Installation

Unit

Quantity Unit Cost

i ii

Access Road - compaction and gravel for 40t trucks Perimeter Road - compaction and gravel for 40t trucks Perimeter Road - drainage trench - 50cmx50cm one side - w/ >0.25% slope (950m) Catchment basin for road (w/ livestock fence) Perimeter Fencing - steel Perimeter main gate - steel Perimeter person gate Level and compaction of land - w/ >0.25% slope Seeding (grass) of land Control Building - 40’ Livable Container Storage Building - 40’ Container Parking lot and internal road - compacted and gravel Parking lot and internal road - drainage - drainage trench - 30cmx30cm w/ >0.25% slope Lay down yard and Container Pads - compacted and gravel - for - 40’ containers Concrete Foundations for Inverter stations - 9x 7mx2.5m containers 18t Compacting land for Inverter stations - 9x 7mx2.5m containers 18t Housing containers lease during construction Sewage (20m sewage line, 30 leachate line, and septic tank 2000 l)

m m

600 1000

60 60

Itemized Cost 36000 60000

m

1000

5

5000

m3 m no. no. ha ha no. no. m2

100 3000 1 1 15.00 15.00 1 1 300

35 10 3000 750 10000 3000 7500 3500 15

3500 30000 3000 750 150000 45000 7500 3500 4500

m

80

5

400

no.

5

750

3750

no. no. no. no.

9 9 2 1

1500 750 1500 3000

13500 6750 3000 3000

iii iv v vi vii viii ix x xi xii xiii xiv xv xvi xvii xviii

72950 TOTAL Civil Works Costs 481,150

Page 77

9. ADDENDUM anD suppoRting infoRmation (Cont.)

K. Projects Costings B) 7.6MW Example

Sheet D1 - Miscellaneous Costs I

Msc

Unit

Quantity Unit Cost

i ii iii iv

Insurance During Construction Workers housing compensation RO Additional Equipment transport 40t trips Additional cost of Purchase of Project

no. no. no.

MW

1.0 76.0 73.3 7.6

110000 400 4000 100000

Itemized Cost 110000 30400 293333 760000 1193733

II

Contingencies

Cost

Cont %

A1 A1 A2 A2 A2

Land Regulations (Processing & Application Fees) Electricity Regulations (Processing & Application Fees) Design Concept & Tendering Engineering (DK - Consultancy) Design Engineering (RO - Consultancy) Supervision Engineering to Commissioning (Consultancy)

231000 168300 69500 51000 120600

10% 10% 15% 25% 15%

Itemized Cost 23,100 16,830 10,425 12,750 18,090

B1

Power Transmission Side

305750

15%

45,863

B1

Inverter/Transformer and AC side Equipment

1745400

5%

87,270

B1

Panels/Frames and DC side equipment

5053720

10%

505,372

B1

Control / Office Building

19400

10%

1,940

B2

Power Transmission Side Int

40250

15%

6,038

B2

Inverter/Transformer and AC side Equipment Int

72950

15%

10,943

B2

Panels/Frames and DC side equipment Int

377180

15%

56,577

B2

Control / Office Building Int

3650

15%

548

C1

Power Transmission Side Civil Works

102000

15%

15,300

C1

On Site Civil Works plus Installation

379150

15%

56,873

D1

Miscellaneous Costs

1193733.33

5%

59,687

TOTAL Msc Costs

Page 78

927,603 2,121,337

9. ADDENDUM anD suppoRting infoRmation (Cont.)

L. O&M Cost Breakdown

Plant operation and maintenance costs 0&M 1

Itemized Annual O&M

i ii iii iv v vi vii viii ix x xi xii xii xiv

PV PLANT SIZE On site operation and security staff Permits and licenses renewals Elec. maintenance Land and building taxes Energy Audits and reporting Civil works M&E installation Transmission line/step up Solar panals inverters and trans SCADA/ meters/Security sys Mounting systems Insurance Msc

Unit MW per/yr per/yr per/yr per/yr per/yr per/yr per/yr per/yr per/yr per/yr per/yr per/yr per/yr per/yr

Itemized cost 2.40 36,000 3,600 6,000 2,400 12,000 4,800 7,200 1,800 3,600 66,000 1,800 2,400 9,600 8,000

Itemized cost 5.00 36,000 7,500 100000 5,000 12,000 10,000 15,000 3,750 7,500 137,500 3,750 5,000 20,000 24,000

Itemized Cost 7.60 36,000 11,4000 19,000 7,600 12,000 15,200 22,800 5,700 11,400 209,000 5,700 7,600 30,400 30,000

EUR EUR/MW

165,200 68,833

299,500 59,900

423,800 55,763

9. ADDENDUM anD suppoRting infoRmation (Cont.)

M. 1st Year G&A Cost Breakdown based on 20MW 75% Debt / 25% Equity

ANTICIPATED FIRST YEAR G&A

%

Based on

Costs

Equity Sourcing Miscellaneous Solar 350 Operating Costs Actual

1.75% 0.75% 2.50%

9,187,500 9,187,500 9,187,500

160,781 68,906 229,68 459,375

1ST YEAR G&A BUDGET

5.00%

9,187,500

459,375

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

N. G&A Cost Breakdown Ongoing based on 20MW 75% Debt / 25% Equity Sheet D1 - Miscellaneous Costs ONGOING G&A COSTS P.A Office Operational Legal Accounting Audit SALARIES & EXPENSES David Burns Doru Laslau A.N.Other FIXED COSTS P.A

€ 3,010,321

15%

€ 451,548

Monthly.

2500 2500 2000 2000 500

Term 12 12 12 12 12

Yearly 30,000 30,000 24,000 24,000 6,500

1200 750 1000

12 12 12

14,400 9,000 12,000 137,900

GRUE AND HORNSTRUP A/S CONSULTANCY FEES EST:

65,000

Doru Bonus A.N.Other PERFORMANCE RELATED PAY (PRP)

0.50% 0.50%

3,010,321 3,010,321

15,052 15,052 30,103

MISCELLANEOUS COSTS

1%

3,010,321

30,103

G&A COSTS LESS FIXED COSTS, CONSULTANCY AND PRP

188,442

SUCCESS FEE POOL

188,442

ALLOCATED AS FOLLOWS: Nick Dimmock John Nicol Tessa Laws Bill Goldie

% of Pool 75.00% 10.00% 10.00% 5.00%

SUCCESS FEE ALLOCATED

188,442 CHECK

9. ADDENDUM anD suppoRting infoRmation (Cont.)

O. Cash flow Forecast Project Cash flow forecasts in excel are available upon request.

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141,331 18,844 18,844 9,422

0.00

9. ADDENDUM anD suppoRting infoRmation (Cont.)

P. Letter of Intent for Equipment and Mezzanine Finance

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

Q. Conditional Letter of Intent for Debt Finance

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

R.European Commission press release

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

S. Opinion on Romaniaâ&#x20AC;&#x2122;s Green Certificate Scheme by Grue og Hornstrup & Supporting Press Releases in Romanian and English.

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

S. Opinion on Romaniaâ&#x20AC;&#x2122;s Green Certificate Scheme by Grue og Hornstrup & Supporting Press Releases in Romanian and English.

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

S. Opinion on Romania’s Green Certificate Scheme by Grue og Hornstrup & Supporting Press Releases in Romanian and English.

AUTORITATEA NAŢIONALĂ DE REGLEMENTARE ÎN DOMENIUL ENERGIEI

ANRE

COMUNICAT 29 martie 2013 Autoritatea Natională de Reglementare în Domeniul Energiei a realizat Raportul cu privire la analiza de supracompensare a sistemului de promovare prin certificate verzi a energiei din surse regenerabile de energie pentru anul 2012 Autoritatea Natională de Reglementare în Domeniul Energiei a discutat, în cadrul Comitetului de Reglementare din data de 29 martie a.c. Raportul cu privire la analiza de supracompensare a sistemului de promovare prin certificate verzi a energiei din surse regenerabile de energie pentru anul 2012.

Schema de promovare prin certificate verzi a energiei produse din surse regenerabile de energie a fost autorizată prin Decizia Comisiei Europene C (2011) 4938 din 13.07.2011: Ajutorul de stat SA 33134 – România – „Certificate verzi pentru promovarea producerii energiei electrice din surse regenerabile de energie„.

OUG nr. 88/2011, privind modificarea şi completarea Legii nr. 220/2008 pentru stabilirea sistemului de promovare a producerii energiei din surse regenerabile de energie, a făcut posibilă aplicarea schemei de promovare prin certificate verzi pentru producătorii de energie din surse regenerabile de energie.

Punerea în aplicare a prevederilor Legii nr. 220/2008, republicată, cu modificările şi completările ulterioare, contribuie la dezvoltarea investiţiilor în domeniul producerii energiei electrice din surse regenerabile, având ca efect îndeplinirea obiectivului naţional privind atingerea unei ponderi de 24% a energiei din surse regenerabile din cantitatea de energie pe care o va consuma România în anul 2020 stabilit în anexa I la Directiva 2009/28/CE a Parlamentului European şi a Consiliului din data de 23 aprilie 2009 privind promovarea utilizării energiei din surse regenerabile, de modificare şi ulterior de abrogare a Directivelor 2011/77/CE şi 2003/30/CE. ANRE are în atribuţii monitorizarea costurilor şi veniturilor rezultate din activitatea de producere a E-SRE pentru producătorii care beneficiază de schema de promovare prin certificate verzi, în vederea modificării schemei pentru noii intraţi, dacă se constată tendinţe de supracompensare.

Metodologia de monitorizare a sistemului de promovare a energiei din surse regenerabile de energie prin certificate verzi detaliază modul în care se face analiza de supracompensare a activităţii de producere a E-SRE pentru producătorii beneficiari ai schemei de sprijin; analiza de supracompensare se realizează anual pe perioada în care această activitate este promovată prin schema de sprijin prin certificate verzi, pe baza evoluţiei următorilor indicatori: 1. nivelul mediu al investiţiei specifice; 2. nivelul mediu al costurilor variabile specifice; 3. nivelul mediu al costurilor fixe specifice; 4. nivelul mediu al factorului de capacitate.

Mecanismul de revizuire a numărului de certificate rezultat în urma analizei de supracompensare se bazează pe recalcularea anuală, pe durata de aplicare a schemei de sprijin, a numărului de Str. Constantin Nacu nr. 3, sector 2, Bucureşti, telefon: 021/311.22.44, fax: 021/312.43.65, mail: anre@anre.ro; pagină de internet: www.anre.ro

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9. ADDENDUM anD suppoRting infoRmation (Cont.)

S. Opinion on Romaniaâ&#x20AC;&#x2122;s Green Certificate Scheme by Grue og Hornstrup & Supporting Press Releases in Romanian and English.

Page 87

9. ADDENDUM anD suppoRting infoRmation (Cont.)

S. Opinion on Romaniaâ&#x20AC;&#x2122;s Green Certificate Scheme by Grue og Hornstrup & Supporting Press Releases in Romanian and English.

Page 88

9. ADDENDUM anD suppoRting infoRmation (Cont.)

S. Opinion on Romaniaâ&#x20AC;&#x2122;s Green Certificate Scheme by Grue og Hornstrup & Supporting Press Releases in Romanian and English.

9. ADDENDUM anD suppoRting infoRmation (Cont.)

T. Preliminary overview over the possibility to reduce the GCs support scheme 19042013 Legal opinion can be provided upon request.

Page 89

9. ADDENDUM anD suppoRting infoRmation (Cont.)

U. Confirmation of Advanced Assurance in Relation to Tax Status from HMRC

Page 90

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10. SUBSCRIPTION BUNDLE

Please note: In order to subscribe to the EIS offering as detailed in this Information Memorandum, subscribers need to complete the following sections of the remainder of this document:

10.3 APPLICATION FORM 10.4 AGREEMENT

AND EITHER 10.5 STATEMENT OF HIGH NET WORTH OR 10.6 STATEMENT OF SOPHISTICATED INVESTOR STATUS This document contains “inputable” fields. This means subscribers can complete the forms electronically and then print out the pages for signing.

Thus, all pages onwards from this point should be completed, printed, signed and dated and placed in an envelope along with 2 Proofs of Address. This should then be posted to: Pomfrey Accountants Ltd Solar 350 EIS Offer Unit 42, The Coach House St Mary’s Business Centre 66-70 Bourne Road Bexley, Kent, DA5 1LU United England

More in depth instructions as well as terms and condition of the offer can be found in the following sections.

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10.1 PROCEDURE

I.

This offer for Class A Ordinary Voting Shares will open on the Wednesday 1st May 2013 and will close on Friday 7th June 2013, or when fully subscribed, whichever is sooner. (There is only 1 class of share in Solar 350 Ltd). In the event that Solar 350 does not raise at least ÂŁ3M, all funds received from this placing will be returned to investors with no deductions.

II. Applications for subscription must be made through the Application Agreement provided in this document.

III.

Applicants should complete the subscription agreement within this document, sign and date the agreement and also provide two sources of identification. Applicants should also provide details of their status as either High Net Wealth or Sophisticated Investors.

IV. The document bundle should then be returned to: Pomfrey Accountants Ltd Solar 350 EIS Offer Unit 42, The Coach House St Maryâ&#x20AC;&#x2122;s Business Centre 66-70 Bourne Road Bexley, Kent, DA5 1LU United Kingdom

The documentation will then be reviewed for completeness and compliance.

Pomfrey Accountants Ltd can be contacted directly at: Telephone: 01322 315755 Fax: 01322 315755 E-mail: matthew@pomfrey.co.uk V.

Applicants should either enclose a cheque for the subscribed amount or provide funds through bank transfer to SOLAR 350 LTD, Metro Bank, Sort Code: 230580 Account Number: 11881262.

VI. Pomfrey Accountants will confirm receipt of funds directly with the client.

VII. SOLAR 350 has commissioned Pomfrey Accountants Ltd to complete all necessary paperwork in regard to SEIS/EIS subscriptions and submit this to HMRC on behalf of the subscriber. Pomfrey will liaise directly with the subscriber in regard to this.

VIII. Oversubscription may result in subscriptions being pared back. Early subscriptions will have preference over late or last minute applications at the discretion of the Directors.

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10.2 TERMS anD CONDITIONS OF THE RESTRICTED OFFER

1.

Applications for Offer Shares (Class A Ordinary Voting Shares) are subject to the terms and conditions included in the Application Form and set out below.

2.

The basis of allotment will be determined by the directors in their absolute discretion. The directors reserve the right: i.

to reject any application in whole or in part or to scale down any applications or to accept applications on a “first come first served” basis;

ii.

to extend the period during which the subscription list remains open;

iii. to treat any application as valid and binding on an applicant even if the Application Form is not complete in all respects or is not accompanied by a power of attorney where required.

3.

The Subscription Bundle should be completed in full and sent or delivered to the address set out in section 10. Procedure, point IV. Please also send 2 proofs of address. Investors are advised to allow two full business days for delivery through the post and to use first class mail.

4.

Subscribers should either enclose send in a cheque in favour of SOLAR 350 Ltd or should send funds to SOLAR 350 LTD, Metro Bank, Sort Code: 230580 Account Number: 11881262 quoting subscribers “First Name Surname” as a reference.

5.

The right is reserved to reject any cheques or send back any transfers, if SOLAR 350 compliance is not cleared or at the recommendation of the Directors of SOLAR 350.

6.

By completing and delivering an Application Form, you irrevocably undertake as follows: i.

Page 94

to subscribe for the number of shares specified in the Application Form, on the terms of,

and subject to, the conditions set out in this document, including these terms and conditions and subject to the memorandum and articles of association of the Company; ii.

to accept such Offer Shares as may be allotted to you in accordance with the Subscription Agreement of the application form or such lesser number (being not less than in value) of Offer Shares in respect of which this application may be accepted (in this case a portion of your contribution will be refunded).

iii. that all applications, acceptances, allotments and contracts arising from it will be governed by and construed in accordance with English law; iv.

that you are not under the age of 18 and that if you sign the Application Form on behalf of somebody else or a corporation you have the authority to do so and such person will also be bound accordingly and will be deemed also to have given the confirmations, warranties and undertakings contained in these terms and conditions of application; you authorise the Company or any of its respective agents to send by post a share certificate for the number of Offer Shares for which your application is accepted and/or a crossed cheque and/or return your cheque(s) or banker’s draft(s) for any monies returnable, in each case at the risk of the person(s) entitled thereto, to your address (or that of the first named applicant) as set out in the Application Form and to procure that your name (together with the name(s) of any other joint applicant(s)) is/are placed on the Register of Members of the Company in respect of such Offer Shares;

v.

that this document has been provided to you for information purposes only you are not relying on any information or representation,

warrants or statements and accordingly you agree that neither the Company nor any other person shall have any liability for any such other information or representation, warrant or statement; vi.

or other consents which may be required and has observed any other formalities in such territory and paid any issue, transfer or other taxes required to be paid in such territory in respect of any Offer Shares acquired under the Restricted Offer. The completion of an Application Form shall constitute a warranty that the person completing such application form has observed such laws and formalities in full and paid such issue, transfer or other taxes. The Company reserves the right to request investors to produce evidence satisfactory to them of their right to apply for Offer Shares under the Restricted Offer and that such application would not result in the Company, its advisors or the directors being in breach of any laws or regulations of the relevant jurisdiction.

on request by the Company, to disclose promptly in writing to it any information which it may request in connection with your application;

vii. that the remittance accompanying your Application Form will be honored at first presentation and agree that if it is not so honored the Company may (without prejudice to any other rights it may have) avoid the agreement to allot the relevant Offer Shares and may allot or sell them to some other person in which case you will not be entitled to any refund or payment in respect thereof; and viii. that you are a Certified High Net Worth Individual or Self-Certified Sophisticated Investor or a Certified Sophisticated Investor.

7. Applications will not be accepted from persons resident in the United States of America, Canada, Australia, Japan, the Republic of South Africa or the Republic of Ireland and by completing and returning the Application Form the Investor warrants that he is not a person so resident. No person receiving a copy of this Information Memorandum and/or an Application Form in any other territory (other than the United Kingdom), may treat the same as constituting an invitation or offer to him, nor should he in any event use such Application Form, unless in the relevant territory such an invitation or offer could lawfully be made to him and such Application Form could lawfully be used without contravention of any regulation or other legal requirements. It is a condition of any application by any such person outside the United Kingdom that he has satisfied himself as to the full observance of the laws of any relevant territory, including the obtaining of any governmental

8.

The Company reserves the right to treat any application, which does not comply strictly with the terms and conditions of the application as nevertheless valid.

9. The Management and Directors of Solar 350 reserve the right to issue share options to the Management, Directors and Grue and Hornstrup in order that the collective shareholdings of these entities stays above 20% of the issued share capital of the business.

10. No letters of allotment or other renounceable or temporary documents of title or receipts will be issued in respect of accepted applications but share certificates will be dispatched within 30 days of allotment.

11.

Applications will be irrevocable.

12. The verification of identity requirements under the Money Laundering Regulations 2003 applies and the verification of identity of the applicant(s) is required. A failure to provide the necessary evidence of identity may result in the rejection of your application or in delays in the dispatch of a share certificate or the return of application monies.

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10.3 APPLICATION FORM

Restricted Offer for subscription for Offer Shares each payable in full. This Application Form should be completed and sent to: Pomfrey Accountants Ltd Solar 350 EIS Offer Unit 42, The Coach House St Mary’s Business Centre 66-70 Bourne Road, Bexley, Kent, DA5 1LU, United England IMPORTANT – Before completing this Application Form you should read carefully the Terms and Conditions. Definitions used in the Information Memorandum shall have the same meaning in this Application Form.

The Information Memorandum alone contains full details of SOLAR 350 Limited, the Restricted Offer and the Offer Shares. This Application Form is only made available with and as an enclosure to the Information Memorandum. The entire contents of the section of the Information Memorandum headed “Terms and Conditions of the Restricted Offer” is deemed to be included and set out in this Application Form. Any person signing this Application Form under a power of attorney must enclose the original power of attorney (or a copy certified by a solicitor) for inspection. If you post your Application Form, you are recommended to use first class post and allow at least two working days for delivery.

Please include with your application: 1.

Copy of a passport or driving license.

2.

Copy of utility bill evidencing your home address (being no more than 3 months old).

3. You are welcome to also enclose a Certificate confirming your status as a sophisticated or high net worth individual pursuant to the Financial Services & markets Act 2000 (Financial Promotions) Order 2005. Alternatively, please complete either the High Net Worth or Sophisticated Investor statements in sections 10.5 or 10.6.

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Subscriber Information Buyer Name:

Company Name: “If Applicable” Address:

Address:

Town / City:

Postcode:

Country:

Company Number: “If Applicable”

Your Email Address:

Subscription Application A. Requested Number of Shares:

B. Share Price:

£14.00

C. Total Consideration £:

Compliance Documents Provided Proof Of Identity:

Proof Of Address:

Introducing Broker: Please State the name of your contact within Solar 350 Ltd

Page 97

10.4 AGREEMENT

This Agreement has been entered into on the date stated below. Signatures confirm your agreement to the terms within:

On Behalf of THE SUBSCRIBER:

Signed:

Print Name:

Title:

Date:

Countersigned in due course on behalf of SOLAR 350 LTD:

Signed:

Print Name:

Title:

Date:

Page 98

10.5 STATEMENT OF HIGH NET WORTH STATUS

I declare that I am a certified high net worth individual for the purposes of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

I understand that this means: (a) I can receive financial promotions that may not have been approved by a person authorised by the Financial Services Authority; (b) The content of such financial promotions may not conform to rules issued by the Financial Services Authority; (c) By signing this statement I may lose significant rights; (d) I may have no right to complain to either of the following: (i) The Financial Services Authority; or (ii) The Financial Ombudsman Scheme; (e) I may have no right to seek compensation from the Financial Services Compensation scheme.

I am a certified high net worth individual because at least one of the following applies: (a) I had, during the financial year immediately preceding the date below, an annual income to the value of ÂŁ100,000 or more; (b) I held, throughout the financial year immediately preceding the date below, net assets to the value of ÂŁ250,000 or more. Net assets for these purposes do not include: (i) The property which is my primary residence or any loan secured on that residence; (ii) any rights of mine under a qualifying contract or insurance within the meaning of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; or (iii) Any benefits (in the form of pensions or otherwise) which are payable on the termination of my service or on my death or retirement and to which I am (or my dependants are), or may be, entitled.

I accept that I can lose my property and other assets from making investment decisions based on financial promotions. I am aware that it is open to me to seek advice from someone who specialises in advising on investments.

PRINT NAME:___________________________________________________________________________________________ DATE_____________________________

SIGNATURE:_____________________________________________________________________________________________

Page 99

10.6 STATEMENT OF SOPHISTICATED INVESTOR STATUS

I declare that I am a self certified Sophisticated Investor for the purposes of the Financial Services and Markets Act (Financial Promotion) Order 2005.

(e) I may have no right to seek compensation from the Financial Services Compensation Scheme.

I understand that this means:

I am a self certified Sophisticated Investor because at least one of the following applies:

(a) I can receive financial promotions that may not have been approved by a person authorised by the Financial Services Authority; (b) The content of such financial promotions may not conform to rules issued by the Financial Services Authority; (c) By signing this statement I may lose significant rights; (d) I may have no right to complain to either of the following: (i)

The Financial Services Authority; or

(ii) The Financial Ombudsman Scheme;

(a) I am a member of a network or syndicate of business angels and have been so for at least the last six months prior to the date below; (b) I have made more than one investment in an unlisted company in the two years prior to the date below; (c) I am working, or have worked in the two years prior to the date below, in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises; (d) I am currently, or have been in the two years prior to the date below, a director of a company with an annual turnover of at least ÂŁ1 million.

I accept that I can lose my property and other assets from making investment decisions based on financial promotions. I am aware that it is open to me to seek advice from someone who specialises in advising on investments.

PRINT NAME:___________________________________________________________________________________________ DATE_____________________________

SIGNATURE:_____________________________________________________________________________________________

Page 100

Commercial Solutions to Climate Change

SOLAR 350 LTD 22 Hanover Square, London. W1S 1JP, United Kingdom T: 0203 151 1 350 F: 0203 151 9 350 W: solar350.co.uk Solar 350 Ltd Registered Office: Unit 42, The Coach House, St Maryâ&#x20AC;&#x2122;s Business Centre,66-70 Bourne Road, Bexley, Kent. DA5 1LU T: 0203 151 1 350 T: 0203 151 9350 W: solar350.co.uk Solar 350 Ltd is registered in The United Kingdom under Company Number: 07678367