1. European Power GenerationStrategy Power Project FinancingSummit Prague, 1 December 2009 Engaging Power Opportunitieswithin the Benelux Weero Koster, Partner, NortonRoseLLP Amsterdam David Haverbeke, Partner, Lydian Lawyers Brussels

3. Belgium

5. Pentalateral Forum

8. Specificationsfor power opportunities

9. Specificationsfor the Benelux Power MarketConclusions 2

12. Consumed Energy: 2.849,74 PJ

13. Consumed Electricity: 427,38 PJ / 123.508 mln kWh

14. Consumed Gas: 830,77 PJ / 45.935 mlnm³3

16. Increasingimportance gas import, slow depletion of Slochteren gas field

17. Dash for Gas: WBL/Nordstream/LNG/Bergermeer

18. ClimateChange Target (Schoon en zuinig):

19. 30% CO2 reductionby 2020 compared to 1990

20. 20% renewableenergyby 20204

22. Increasing focus onrenewableenergy (wind, CHP, biomass), special focus on offshore windenergyCapacityongrid? Congestion management / Bill onpriorityforrenewables (voorrang voor duurzaam) Positionconventionalenergysourcesincreasinglydifficult But: onlyrenewableenergy is notenough 5

25. Sloe: Gas fired power plant6

27. Marketprofile

28. Productioninstallationcapacity: 15 633,9 MW (2008)

30. Consumedelectricity: 91.54 TWh (2007) (Key World Energy Statistics 2009, www.ier.org) 7

32. Notenoughinstalledproductioncapacity

33. Increasing import of power

34. Nucleair power generation

35. Mainsource of power

36. Legal uncertaintyon the lifeextension of nucleair power plants

37. Emissionreduction

38. Gas

39. Largescale CCGT projectsongoing

40. Coal

41. Non-efficient coal plants=> Reconversion to new ‘state of art’ coal technologies (UHFC and IGCC) 8

43. Renewable Energy (13% in 2020)

44. Offshore wind parksunderdevelopment

45. Optimalisation of the limitedpotential

46. Promotion of renewableenergyGreen Certificates Obligated Certificates at minimum prices Undertakingstradecertificateswhenthey have more orlesscertificatesthantheir quotum obligation The certificateprices are quitestable and fit close to the penalty tariffforeach missing certificate Ecology premium Increasedinvestmentdeduction 9

48. Marketprofile

49. Productioninstallationcapacity: 127 MW (2001)

50. Producedenergy: 0.08 Mtoe (2007)

51. Hydro: 79 % (2006)

52. Geothermal, solar,…: 12%

53. Combustible, renewables and waste: 9%

54. Energy Import: 4.54 Mtoe (2007)

55. Consumedelectricity: 7.83 TWh (in 2007)(Key World Energy Statistics 2009, www.ier.org) 10

57. Proposals for

60. Purpose:

61. effective unbundling of network and supply activities

62. removing regulatory gaps (in particular for cross border issues)

63. addressing market concentration and barriers to entry

64. increasing transparency in market operations

65. Especially by:

66. Extending competencies and obligations of the National Regulatory Authorities (NRAs)

67. Into force in September 2009

68. (Regulations do not however all apply yet)12

69. 2. Cross-borderIntegration and RegionalInitiatives Third Energy Package ThirdPackageImplementation in the Netherlands Full ownershipunbundling as per 1 January 2011 Level playing field clause EU M&A (Essent, Nuon, more to come?) ClimateChangePackage 17 December 2008: New directiveon the promotion of the use of energyfromrenewablesources Target for the Netherlands: 20% of energyconsumptionfromrenewablesby 2020 14% of transport fuelfrombiofuels 13

70. 2. Cross-borderIntegration and RegionalInitiatives Third Energy Package Implementation in the Netherlands DecreeBiofuels (besluit biobrandstoffen wegverkeer 2007): Amendement of 6 May 2009: to reduce the percentages of mixingbio-fuels, from 4.5% to 3.75% for 2009 and from 5.75% to 4% for 2010 Amendement of 8 October 2009: to createpossibility to usecorrection factor (wegingsfactor) forcertaincategories of biofuels 30 June 2010: Deadline for EU states to present National Renewable Energy Action Plans 14

71. 2. Cross-borderIntegration and RegionalInitiatives Third Energy Package Gas: 15 Emden Oude Staten-Zijl Julianadorp Vlieghuis Winterswijk Zevernaar Hilvarenbeek Zandvliet Zelzate Obbicht Bocholtz ‘s Gravenvoeren

72. 2. Cross-borderIntegration and RegionalInitiatives Third Energy Package Electricity: 16

73. 2. Cross-borderIntegration and RegionalInitiatives Third Energy Package Electricity: Interconnectors (BritNed / NorNed) Plans for upgrading high voltage grids in: Maasvlakte (Westland) Northern part of the Netherlands Gas: Plans for upgrading gas transport net in Emden Gas storagefacilities in Germany: Epe (Essent, Nuon, Eneco, EON) Etzel (EDF, EON) 17

76. Central Western Electricity RegionalInitiative

77. North West Gas RegionalInitiative(exceptLuxembourg)

78. Purpose:

79. Improve coordination in the field of cross-border exchange

80. Give political backing to a process of regional integration of electricity markets towards a European single energy market18

82. Agreement gas interconnection Fluxys (Belgium) – Zebra (Netherlands)

85. SDE 2010: State subsidies renewableenergy

86. Startingfrom end of January 2010 to 1 November 2010

87. Strong focus on offshore wind energy

88. Total subsidyceilings in 2010 is € 1955 mio (excl. Offshore wind), allocation:

89. Onshore wind (€ 937 mio);

90. Biomasselectricity (€ 380 mio) / gas (€ 180 mio);

91. Solar (€ 93 mio);

92. Sewagetreatmentfacilitiesorlandfillgaseselectricity (€ 13 mio) / gas (€ 24 mio);

93. Waste combustion (€ 238 mio); and

94. Hydro power (€ 90 mio)20

96. In 2010 SDE alsofor offshore wind energy: Decree of 18 November 2009 fast tracks subsidies for offshore wind Subsidy tender starting in January 2010 Total of 950MW and a ceiling of € 5.3 billion Distinction on distance from shore Expirement regulation offshore wind: Ministerial arrangements of 18 November 2009 Total of € 9 mio available - up to € 4.5 mio per application Co-firing of biomass Temporary subsidized via SDE Minster of Economic Affairs: plans to make it obligatory 21

97. 3. RegulatoryFrameworkforInvestments in Power Mainprovisions in the Netherlands Acceleration administrative procedures by: coordination of spatial planning procedures energy projects of national importance interim exemption from certain procedural steps for renewables (Recovery Act) – implementation delayed State guarantee loans (Garantieondernemingsfinanciering) State funded crisis recovery program State guarantee to banks for 50% of the amount lend to large companies Also for renewable energy projects Up to a loan of EUR 50 million per company 22

99. Act of 29 April 1999 regarding the organisation of the electricitymarket

100. Royal Decree of 11 October 2000 regarding the allocation of individualpermitsfor the construction of installationsforenergyproduction

101. Nucleair Phase-Out act of 11 April 2003 and currentrevision23

103. Project financing?

104. Identifying main risks - risks allocation:Regulatory (REB -> MEP -> SDE, within 5-6yrs) Financing – Credit Crunch Technology (Noordzee wind/ Amalia) Off-take Connectivity Environment - Nature conservation Site contracts (ownership/land lease) 24

106. 4. Approach and MethodologyforInvestmentProjects (constructor/turbine manufacturer) consumer Sponsor B Sponsor A Subsidy SDE Shareholders agreement Project SPV Consumer PPA Financing & Securities Connection & transmission agreement Site lease contracts EPC contracts Permits Licence agreement 26

108. Power opportunities

109. Power grid:

110. Smart grid

111. Interconnectors (BritNed)

112. Power generation:

113. Renewables (specifically offshore wind)

114. CCS

115. Nuclearenergy27