Iberdrola Estonia Wind

complete

The development of the 150MW Lüganuse Windfarm project (the “Project”), located approximately 120 km east of Tallinn, and close to the Baltic Sea shore. The Project is to contribute to the development of renewable energy in Estonia and aims to substantially increase the Estonian wind generation capacity that currently totals approx. 60MW. The project transition impact will derive from the following key areas: OÜ Raisner (the “Company”), a private limited liability company operating with the sole purpose to develop the 150MW Lüganuse Windfarm. The Company is majority owned by Ibedrola Energias Renovables II (“Iberenova”), with a minority stake hold by OU Adepte (“Adepte”) the local and original developer of the Project. Iberenova is a renewable energy arm of Iberdrola, and a world leader in wind energy. EBRD is to provide up to EUR 900,000 equity investment in the Company as a first stage investment. Confidential. The Project has been screened as C/1 requiring an environmental due diligence of the Project to review the Client's approach to structuring projects and to ascertain (i) the site sensitivity and (ii) whether the Project is structured to meet EU environmental standards. The Bank is in the process of undertaking an Environmental due diligence of the Project, and initial information shows that the Project is being designed in accordance with EU environmental standards and is not located in an environmentally sensitive areas (such as Natura 2000 area). Additional site visits are planned to complete the due diligence process. Based on the due diligence, the Bank will agree an environmental and social action plan (ESAP), which will be implemented by the Company. The scope of the Bank due diligence is based on the current structure of the Bank’s investment, which is only for the development of a bankable project, and does not cover the future construction phase. In essence, the Bank's investment will be used among others to undertake an National, EU and Bank complaint EIA. Although the initial analysis has confirmed the low risk associated with the Project, additional data is required, and the true sensitivity of the Project will be fully ascertained as part of the implementation phase of this project (among others developing the EIA). The involvement of the Bank will also foster the development of best practice in wind farm EIA in Eastern Europe, and could serve as a demonstration project. The Bank will monitor the project and assist with implementation as required. The future development of the wind farm will need to follow all relevant provisions under the Bank's Environmental Policy and be subject to additional due diligence. None. Mr. Raigo Solg OÜ Raisner Jaama 1a 11615 Tallinn Estonia Tel: +372 6 732244 Fax: +372 6 732246 E-mail: raigo@windrose.ee