PRESS RELEASE June 2005
Seed Finance to create Asian Sustainable Energy Fund

Funding problems that face the energy sectors in many Asian countries could be eased with targeted investment in key areas. REEEP, together with its partner, Emerging Power Partners (EPP), has recognised this financial need. REEEP is therefore providing seed funding for the establishment of a €50m investment fund - the PEMF2 Asia Sustainable Energy Fund - to provide services and investment capital to enterprises and projects that generate renewable energy, enhance energy efficiency and offer energy services in the Asian region. The countries targeted for project funding will be ASEAN nations, India and China.

The activities of the fund will be handled through a Fund Management Company (FMC) operating out of Bangkok. The investment fund, which will build on the experiences of the PEMF1 fund, will inherit existing contact networks, experience and a pipeline of deals. It is hoped that a third fund, PEMF3 will be set up once PEMF2 has been successfully concluded.

One focus of the fund will be the promotion, financing and implementation of clean energy projects which enable switching to cleaner fuels and power generation from indigenous sources of energy. Specifically, PEMF2 will be used to mobilise equity financing for 10-15 renewable energy projects with an estimated capacity of 150-500MW, which could prevent emissions of thousands of tonnes of CO2.

The project will also identify new opportunities for innovative approaches to funding through the nascent carbon market and other Kyoto mechanisms, to identify potential investors in these new fields, and bring investors and projects together. In addition, REEEP aims to provide support for an international network set up to record all existing sources of finance, active partnerships and potential linkages which could be used to mobilise the massive capital needed to promote energy efficiency and renewable energy across the ASEAN region.

- Back -

PRESS RELEASE June 2005 [As covered by Reeep News Stories]
Private Energy Market Fund - Gaining Momentum in South East Asian Clean Energy Finance

An interview with Herkko Lehdonvirta, fund manager of the new REEEP-backed Private Energy Market Fund (PEMF II) Herkko Lehdonvirta is a Managing Partner of the Helsinki-based, Emerging Power Partners (EPP), a recent REEEP partner and a pioneering fund manager for clean energy investments. Following the full commitment of capital from its first fund, Private Energy Market Fund I (PEMF I), EPP is now working on raising a second fund. PEMF II will have €50 million capital for sustainable energy investments in Asia. "With the success of the first fund, I'm confident that we will raise the funds for the second," says Lehdonvirta. "We've been there and done it, and that's what the investors like to hear." PEMF II will directly benefit from its predecessor, having an established network of energy professionals and a pipeline of South East Asian projects in biogas, biomass, small hydro, wind and waste. When fully invested, PEMF II will mobilise equity financing for 10-15 renewable energy projects with an estimated total cost of €200-400 million, an estimated capacity of 150-500 MW and an estimated reduction of 20-30 million tonnes of C02.

How have investors' attitudes changed towards renewable energy and energy efficient investments since you launched PEMF I?

Herkko Lehdonvirta: Awareness and willingness to invest in sustainable energy has increased dramatically. It is mainly due to the ratification of the Kyoto Protocol and the start of the EU Emissions Trading Scheme. Carbon credits are now a marketable commodity and this has increased the attractiveness of renewable and energy efficient technologies. Also, the commercial maturity and scale of wind power technology has shifted investors' attitudes to other renewable technologies. What type of investors are you targeting? Herkko Lehdonvirta: The first group of investors will be public development funds such as Finnfund, one of our anchor investors, which have investment experience from emerging markets. The second group consists of commercial investors seeking opportunities in renewables. These investors include pension funds, insurance companies, funds of funds and industrial investors. Geographically, we expect to have a good balance between European and Asian investors. Is there more competition now among private equity funds in clean energy? Herkko Lehdonvirta: The demand for capital for renewable energy investments exceeds the supply of funds. So it's a positive environment for us. Having said that, multi-sector private equity investors are now more selective than they used to be. They have gone through a learning curve in biotechnology and IT over the last few years. They apply a lot of scrutiny to sectors which are still considered new for private equity investments.

What type of questions are you usually asked as a fund manager?

Herkko Lehdonvirta: The key question is always track record. What type of experience do you have in the sector? Having a good investment story that resonates with macro trends in the marketplace is not enough when investing equity in renewable ventures. You need both a track record and an investment pipeline. What is the level of interest among the investors towards the carbon credits that PEMF II will generate? Herkko Lehdonvirta: The Clean Development Mechanism is already working in some of the emerging markets where we work. However, in debt financing, revenues from carbon emission credits do not really count yet. For investors like us, it's a part of our upside return potential. Our fund performance does not solely rest on carbon finance streams, but it will enhance our returns when the carbon market really takes off. However, we won't make pure carbon investments. We will only source carbon credits in projects where we invest equity. I believe we may be one of the very few equity funds doing this. It means that we will be better informed than a sole carbon fund about the process and progress of carbon credit generation. We will have more control and I expect this will be a reassuring factor to credit buyers. What makes you different from other private equity funds in this sector? Herkko Lehdonvirta: The fact that we have a long and well-matured pipeline of actual and potential projects is very important. It means a swift investment roll-out from the fund. We also have an efficient advisor network throughout the South East Asian region. A big part of this is Electrowatt-Ekono, a Finnish engineering company which has several hundred people in key locations throughout South East Asia. We have up-to-date market information. Furthermore, we take a hands-on approach in the companies and projects we invest. We seek adequate control to ensure the value of our investments. That might not mean a majority position, but if it does, then we'll assume it and operate accordingly.

Why do you focus now to South East Asia?

Herkko Lehdonvirta: South East Asia has experienced steady economic growth, and there is sustainable growth in power demand. Their energy systems are open enough for private investors to participate, and the regulatory environment is suitable for private investors. Moreover, many Asian countries have recognized the importance and benefits that clean energy provides, so they have introduced incentive and policy programmes for renewable energy.

Does that explain your interest in REEEP - you consider it as a network for exploring of new market opportunities?

Herkko Lehdonvirta: We consider REEEP as an excellent networking venue. In the clean energy sector you need to collaborate and partner. Successful projects need good developers, added value risk capital and co-operation between the market operators. Track record is fundamental. You only collaborate with those who know what they're doing and have done it before. At present we focus on Asia, but we are keen on networking through REEEP for any project, wherever it may be, that needs the type of financial expertise we can offer.

- Back -

PRESS RELEASE 25.05.2004
Private Energy Market Fund (PEMF) invests in wind power in Greece

PEMF's investment in Cannon Cyprus Meltemia Ltd. and Cannon Cyprus Arkadian Wind Parks Ltd., holding companies incorporated in Cyprus, consists of subscription of newly issued preferred equity shares of € 5 million. The project consists of building and operating two wind farms in Greece with a nominal capacity of 40 MW.

The project is PEMF's first investment in wind power and a great breakthrough in one of the key investment areas within renewable energy. Economical and technical conditions offer good investment framework due to good wind conditions, proven technology, and long-term power purchase agreement at a guaranteed price with HTSO, the state owned Transmission Company. Both wind farms have received all permits and licences that are required for the implementation of the Project.

The other participants and financers of this project are Eunice Energy Limited (Eunice) and Mr. John Giokaris. Eunice is a Greek development and engineering company focusing exclusively on the renewable energy sector. Eunice wind park portfolio consists of 35 wind park projects under development with a total anticipated capacity of 500 MW.

Enercon" one of the leading in Europe will supply the wind turbines based on the Engineering, Procurement and Construction (EPC) contract after a tendering process. The turnkey contract includes the supply, erection, and commissioning of wind turbines along with all the necessary supporting works. Besides the EPC contract, Enercon has accepted full responsibility for the operation and maintenance (O&M) of the project for its first 10 years.

With one of the best wind regimes in Europe and with the support of the Greek government, the wind power industry in Greece is set to grow substantially in the coming years.

- Back -

PRESS RELEASE 30.03.2004
Progress in Thailand with A.T.Biopower Co. Ltd
Ground Breaking Ceremony - first plant in Pichit

A.T.Biopower Co., Ltd. held a Ground Breaking Ceremony for its first power plant at Tambon Horkrai, Pichit Province in Thailand. ATB was privileged to have the Royal Privy Councilor Mr. Thep Devakula as the Chairman of the Ceremony that was conducted with respect to the local traditions.

Guests included academics, supporters of the project from Thailand and abroad, the press and approximately 300 local residents. Herkko Lehdonvirta, Olli Kuronen and Riikka Talvitie were PEMF's representatives at the occasion.

The Chairman of the Ceremony pointed out the importance of this project to the development of renewable energy for Thailand as it relates to the conservation of natural resources and environment. He also noted to be pleased to see that many foreign, environmentally and socially conscious investors and enterprises have interest in joining hands to develop this green project.

ATB power plant is a 22MW power plant, fuelled by rice husk, an abundant agricultural residue. The approximate fuel consumption is 470 tons per day. The construction of the power plant, led by Electrowatt Ekono (Thailand) Ltd, started in December 2003 and the electricity supply to the grid of the Electricity Generating Authority of Thailand is scheduled to commence in December 2005.

Picture 1 Picture 2 Picture 3

- Back -