NBT AS – Wind farm development in China

Company presentation July 2010

NBT AS – Wind farm development in China
Company presentation July 2010
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3
Agenda

Investment case

Market drivers

Overview of wind farms

12

Summary

19

Appendix
4
NBT overview
Company
Company overview
overview Wind
Wind farm
farm locations
locations

 Founded in 2004 with focus on renewable energy

Under
development:
Wudalianchi
Baic heng
in China
Heilongjiang

 Between 2005 – 2008, a significant portfolio of

Datang
(Inner Mongolia
Chifeng)

development agreements were signed (>1,500

MW) and building permit and agreements for first
wind farm project obtained
 The company has raised approximately NOK 270
million in equity to date
= near -term pr ojec ts

 Most recently, NBT raised NOK 50m in a = poss ible NBT r esour ces

private placement in June 2010

 In 2009, the company signed an agreement with Key
Key management
management
AEI, an energy infrastructure company, to co-invest  Joar Viken (CEO)
with NBT in 4 wind farms
 Entrepreneur with more than 25 years
 NBT signed an agreement with HSBC for
experience in real estate
non-recourse senior term loan facility for the development/project development
first wind farm
 Walter Chang (CFO)
 NBT currently has 6 wind farms lined up for
construction / development  MBA in entrepreneurial management and
marketing from the Wharton School at the
University of Pennsylvania
 Previously CFO of Nordic Wind power and
SVP in charge of mergers and acquisitions
and corporate finance at Millicom
International Cellular

5
 Overview of NBT’s initial wind farms
Baicheng
Baicheng wind
wind farms
farms Datang
Datang wind
wind farms
farms
• NBT and AEI have co-development agreement to • A 1,000 MW framework agreement has been entered into
develop a total of 200MW (4 farms x 49.5m) between NBT and Datang
• Initial project under construction – the second is ready • Construction initiated by Datang for the first project
for construction
• Key figures for each 49.5 MW project**:
• Key figures for each 49.5 MW project*:

Capex RMB 500m (100%) Capex RMB 513m (100%)

Equity financing RMB 100m (20%) Equity financing RMB 120m (23%)

Annual PPA revenues RMB 79m Annual PPA revenues RMB 93m

IRR ( / ) 11% / 21% IRR ( / ) 13% / 25%

• AEI is responsible for the construction phase • Datang is responsible for the construction phase
• Operational organisation chart: • Operational organisation chart:

General
GeneralManager
Manager General
GeneralManager
Manager
(Nominated
(Nominatedby
byAEI)
AEI) (Nominated
(Nominatedby
byDatang)
Datang)

Deputy General
Deputy General Deputy General
Financial controller Manager Financial controller
Manager Manager
(Nominated by AEI) (Nominated by (Nominated by NBT)
(Nominated by NBT) (Nominated by NBT)
Datang)

Note: ( / ) = (total capital IRR / equity IRR for NBT)

* For wind farms 2-4 ** For initial four wind farms

6
Investment highlights
Wind
Wind power
power inin China
China is
is  Wind power in China is a very attractive (>20% Equity Return) investment
expected
expected to
to grow
grow opportunity with potential for significant growth
significantly
significantly  China installed over 13,000 MW wind power in 2009, more than 1/3 of all
new installed capacity worldwide in 2009
 Growth is fuelled by a governmental mandate of reaching 15% renewable
energy production by 2020
 5% by 2012

 Chinese Renewable Energy Law passed in 2006 provides secure, stable and
Regulatory
Regulatory framework
framework attractive framework and subsidies
supports
supports growth
growth  Good access to debt financing and cost effective turbines secure strong
and predictable cash flows
 >20% Equity Project IRR
 Electricity price is fixed for approximately the first 12 years of the project
and is sold to State Grid Company of China (30,000 operating hours)

 NBT has secured attractive land permits for more than 1,500 MW allowing for
NBT
NBT in
in excellent
excellent position
position significant growth, limited only by available funding
 NBT has signed agreement with AEI to co-invest in the wind farms and has
obtained non-recourse project financing from HSBC for its initial project
 NBT’s wind farms will generate significant cash flows, and the company will
have significant dividend capacity from 2012 and onwards
 Cash flows > NOK 90m p.a. assuming six wind farms in operation

Portfolio
Portfolio of
of wind
wind farms
farms with
with highly
highly attractive
attractive returns
returns and
and vast
vast potential
potential for
for scalability
scalability
Short
Short period
period from
from time
time of
of investment
investment to
to cash
cash flows,
flows, allowing
allowing for
for high
high dividends
dividends combined
combined with
with further
further growth
growth

7
Agenda

Investment case

Market drivers

Overview of wind farms

12

Summary

19

Appendix
8
Strong growth in renewable energy and wind in particular

Total
Total global
global annual
annual investment
investment in
in clean
clean energy
energy 2004
2004 to
to 2009
2009
Strong
Strong growth
growth in
in low
low carbon
carbon electricity
electricity generation
generation (USDbn)
(USDbn)
1)
1)

USDbn
200

+32% 15 5
14 8 14 5
15 0

98
10 0

62

50 36

2004 2005 2006 2007 2008 2009

Global
Global cumulative
cumulative installed
installed wind
wind energy
energy capacity
capacity Global
Global wind
wind power
power market
market forecast
forecast

GW +21%
200
GW %
15 9 450 30%
26%
15 0 400
22%
12 0 350 20%
+28% 19% 18% 20%
10 0 94 300
15%
74 13%
250
59 408
200 9% 346
48 8%243 291 10 %
50 39 7%
31
17 24
8 10 14 50
6 159 199 55 63
38 41 44 48
0 0 0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2007 2008 2009 2010 2011 2012
Annual installed capacity Annual installed capacity growth rate
Cumulative capacity Cumulative capacity growth rate

Note: 1) Including financial investments, small/residential projects and R&D (private and government)
Source: IEA World Energy Outlook, GWEC Global Wind Report 2009, Emerging Energy Research “Asia Pacific in the Global Wind Market 2009

9
China – strong growth backed by excellent wind conditions and
a favourable Chinese renewable energy framework

Wind
Wind power
power installed
installed capacity
capacity and
and new
new capacity
capacity in
in 2009
2009 Annual
Annual installed
installed capacity
capacity (MW)
(MW)

Top 10 in installed capacity (GW) Top 10 in new capacity (2009, GW)

Other Other
USA Portugal
Denmark 21.4 Canada 4.0
Portugal 35.2 UK 1.0 China
UK 3.5 3.5 France 13.0
1.1 1.1 0.7
France Italy
4.5 4.1 1.1
Italy 4.9 India 1.3
10.9 25.8 1.9
India Germany
2.5
19.1 Germany
Spain
25.1 9.9
Spain
China USA

China
China is
is on
on track
track to
to capture
capture the
the highest
highest level
level of
of growth,
growth, with
with China’s
China’s wind
wind equipment
equipment production
production networks
networks are
are expanding,
expanding,
India leading the second tier of Asian players
India leading the second tier of Asian players with
with regional manufacturing bases taking shape
regional manufacturing bases taking shape

Note: 1) Including financial investments, small/residential projects and R&D (private and government)
Source: GWEC Global Wind Report 2009, Emerging Energy Research “Asia Pacific in the Global Wind Market 2009, Arise Windpower IPO prospectus

10
China – strong growth backed by excellent wind conditions and a
favourable Chinese renewable energy framework (cont’d)

China
China has
has excellent
excellent wind
wind conditions
conditions Favourable
Favourable Chinese
Chinese renewable
renewable energy
energy framework
framework

 Wind conditions are favourable due to the high amount of  Renewable Energy Law is in effect since January 2006
wind and stable conditions reducing equipment damage
 Chinese government has ambitious goals for
 China wind resources ranked #1 in Asia, among the best renewable energy
in the world
 Mandate that 15% of electricity produced from
 China is leading Emerging Energy Research’s renewable energy by 2020, 5% by 2012
classification of eastern wind markets (max score 100
 Predictable framework
and max 20 in each category):
 Government guarantees electricity prices for 30,000
China 20 14 18 18 11 81 operating hours and has set 4 price levels for wind
power based on wind resources with NBT’s wind
India 18 18 18 8 16 78 farms at RMB 0.61 or RMB 0.58 or RMB 0.54 per
KWhr
Australia 12 12 14 16 18 72
 Grid companies are required to purchase all
Japan 10 14 16 12 17 69 electricity produced from renewable energy

South Korea 10 17 12 14 8 61

New Zealand 14 8 16 15 6 59

Taiwan 10 14 12 18 2 56

Pakistan 16 11 20 5 1 53

Philippines 14 3 20 8 1 46

Competition Site approval Wind resources

Grid issues Regulatory incentives

Source: Emerging Energy Research

11
Agenda

Investment case

Market drivers

Overview of wind farms

12

Summary

19

Appendix
12
Solid strategic partners and established relationships with banks
 Owns and operates energy infrastructure businesses in
emerging markets diversified across four core
businesses
 AEI controls approximately 26,500 miles of gas and
liquids pipelines, 121,000 miles of power distribution
and transmission lines, and 2,277 MW of installed
power generation capacity in Andean, Southern Cone,
Strategic
Strategic Central America/Caribbean, China, and Europe/Middle
partners
partners East/North Africa
 AEI owns 67% and NBT owns 33% of the first 49.5 MW
Baicheng project
 NBT and AEI have co-development agreement to
develop a total of 200 MW
 HSBC acted as arranger for RMB 397 million non-
recourse senior term loan facility to the first Baicheng
project
Debt
Debt financing
financing  First non-recourse long term financing in the wind
partners
partners energy sector in China, first to be denominated in RMB
and first non-recourse long term financing under the
frame work of Chinese Renewable Energy Law
 The success of this transaction gives confidence to
other renewable energy projects in China
 Datang Power is one of the largest state-owned power
producers in Mainland China, especially its position in
Northern China
 The company is engaged in the development and
operation of power plants, the sale of electricity and
thermal power, and the repair and maintenance of
power equipment and power-related technical services
 NBT and Datang have a 1,000 MW framework
agreement
 Gross capacity plan substantiated by significant project
pipeline
 HSBC is joined in the Facility by the Bank of
Communications which provided its strong RMB
balance sheet capability and ability to make long term
RMB loans
 Bank of Communications is 19.9% owned by HSBC
 The fourth largest bank in China
13
Flexible strategy and corporate structure

Ownership
Ownership and
and financing
financing structure
structure Wind
Wind farm
farm locations
locations

NBT*
NBT* Under development:
Wudalianchi
Baicheng Heilongjiang

Datang
(Inner Mongolia
Baicheng
Baicheng Datang
Datang JV
JV Chifeng)

Baicheng #1 Baicheng #2 Datang #1 Datang #2

Baicheng #3 Baicheng #4 Datang #3 Datang #4

= near-term wind farms

Datang #5 Datang #6
= possible NBT resources

Ongoing construction (Power production from December 2010)

Ready for construction Potential following wind farms

 Wind farms
 Baicheng I (AEI) – fully financed and under construction
 Datang I – NBT investment decision made and construction initiated
 Datang II – IV and Baicheng II (AEI) – Final NBT investment decision not yet made
 Single purpose project entities for each wind farm held through Hong Kong holdco structure (Can be funded both in NBT and subsidiaries)
 Flexible exit structure including sale of single assets / portfolio of assets vs. keeping assets for the long term
 Potential listing of Hong Kong holdco(s)
*Note: Other wind projects / resources not shown

14
Near-term wind farms – strong project cash flows and
returns with additional upside from CERs

Illustrative
Illustrative project
project cash
cash flow
flow profile
profile

Low up-front CAPEX Annual stable NBT

and equity - at cash flows over 20
construction start years

Remaining CAPEX and

equity at construction
completion

Baicheng
Baicheng value
value sensitivity
sensitivity for
for NBT
NBT (NPV)*
(NPV)* Datang
Datang value
value sensitivity
sensitivity for
for NBT
NBT (NPV)*
(NPV)*

NOKm NOKm/MW NOKm NOKm/MW

180 180 17.3

150 15.3 150 15.6

15.1
120 14.0 120
13.7
90 13.4
90
12.3
60 60
PPA PPA
30 PPA and CER 30 PPA and CER
0 0
16% 15% 14% 13% 12% 11% 10% 16% 15% 14% 13% 12% 11% 10%
Required equity return Required equity return
Note: NBTs net equity contribution can at some locations be reduced by a 2% developer fee. The above illustration is based on future Baicheng and Datang wind farms
*NPV shown is for each of the Baicheng #2-4 wind farms (c. 50 MW each) and for the initial four Datang wind farms (4 x c. 50 MW)

15
Summary financials for Datang wind farms

Key
Key financial
financial figures
figures (RMB)
(RMB)
RMBm Free cash flow to firm  Wind farm size: 49.5 MW
10 0 Free cash flow to equity
NBT cash flow
 Load factor of 42% = production of ~173 GWh
80 p.a.
60  Electricity tariff from state power company
40  ~ 0.54 RMB/kWh
20  Non-recourse project financing
0  ~RMB 392m
2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17 2 0 18 2 0 19 2020
 ~77% of total investment of RMB 513m
P&L (RMB Mill) 2011 2012 2013 2014 2015
 ~6% interest rate
Capacity 49.5 49.5 49.5 49.5 49.5
Production (MWh) 173,014 173,014 173,014 173,014 173,014  Tax rate: 25%
CER quotas 197,236 197,236 197,236 197,236 197,236
 Annual wind farm O&M cost of approx. RMB 11m
CER Price 10.0 10.0 - - -
 No O&M cost initial 3 years
El price 0.54 0.54 0.54 0.54 0.54
O&M Cost per MW (0.18) (0.19) (0.20) (0.21) (0.23)  20 years life expectancy of wind farm

Electricity revenues 93 93 93 93 93  Possibility to re-power after 20 years

CER Income 16 16 - - -
 CER approved project
Total Revenue 109 109 93 93 93
O&M cost (11) (11)  Assumed CER price EUR 10
EBITDA 109 109 93 83 82
Depreciation (26) (26) (26) (26) (26)
 CER per MW ~1.14
EBIT 84 84 68 57 57
Interest cost (24) (22) (20) (18) (16)
Pre tax earnings 60 62 48 40 41
Tax (15) (16) (12) (10) (10)
Tax break - - - - -
Net Income 45 47 36 30 31

Note: Ownership assumption NBT 49% and Datang 51%

16
Significant cash flows allowing for dividends / further investments
NBT
NBT Project
Project Cash
Cash Flows
Flows

Equity Project Dividend to NBT AS 2010 2011 2012 2013

Baicheng I - 11 11 9
Baicheng II (50) 10 20 15
Datang I (59) 21 22 17
Datang II (59) 21 22 17
Datang III (59) 21 22 17
Datang IV (59) 22 17
Project total (286) 84 118 91

 NBT’s equity portion for one ~50 MW wind farm project represents NOK 50-60 million for a 50% stake
 Assuming no up-front premium paid to NBT or carry on equity provided by project partner
 Each project is highly profitable – equity investment is paid back in less than 3 years
 Each project will pay dividends to NBT’s Hong Kong company (dividends taxed at 5% exiting China)
 NBT AS will be in a position to pay dividends to its shareholders already in 2012
 Available cash flows from six wind farms would exceed NOK 90m per year
 Flexible business model allowing for significant growth

Note: Net income = project cash flow (assuming depreciation equal to debt amortization)

17
 Illustrative key financials for NBT AS (assuming 6 wind farms)

NBT
NBT AS
AS Profit
Profit and
and Loss
Loss NBT
NBT AS
AS Cash
Cash Flow
Flow

Profit and Loss Statement 2010E 2011E 2012E Cash Flow Statement 2010E 2011E 2012E
Revenues Net Income - 81 115
SG&A (3) (3) Plus D&A - - -
EBIT (3) (3) Cash from Operations - 81 115
Financial Expenses
Financial Income 84 118 Cash from Investments
EBT 81 115 Wind Park Funding (46) (240)
Tax - - Other (67) (10)
Net Income 81 115 Maintenance
Dividends to equity holders - - Cash from Investments (113) (250) -
Reatined Earnings 81 115
Cash from financing
Equity financing 363 36
Debt financing
Dividends paid - - -
Cash from financing 363 36 -

Net Cash Flow 250 (133) 115

Cash balance 250 117 232

Cash
Cash flows
flows from
from 66 wind
wind farms
farms support
support aa significant
significant dividend
dividend capacity
capacity from
from 2012
2012

Note: Key financials presented prepared assuming no new wind farms implying limited need for group overhead expenses
Project cash flows reduced by 5% tax on dividends paid by Chinese project companies to NBT’s Hong Kong holdco
Cash flow from exercise of outstanding warrants assumed to occur in 2011

18
Agenda

Investment case

Market drivers

Overview of wind farms

12

Summary

19

Appendix
 Illustration of targeted financing

NBT
NBT ‘s
‘s financing
financing requirements
requirements are
are dependent
dependent on
on number
number of
of wind
wind farms
farms taken
taken on
on and
and NBT’s
NBT’s retained
retained ownership
ownership

Q2 - Q3 2010 Q4 2010 - Q1 2011

NOKm
400
363
350 10

300

250
240

200

150

100
46

Raised in June
50 31
2010: NOK 50m
11 25
0
SG&A second Near-term liabilities Corporate Initial instalments Remaining Corporate Funding need
half of 2010 development* Baicheng II + equity Baicheng development assuming
Datang I-III II, Datang I-III + ~50% stake in
Note: Assuming NOK/RMB of 1.00 Datang IV 5 additional
*Including transaction costs project**
**Total project equity amounts will be lowered if all Assuming NBT retaining approx. 50% stake with
financing becomes available in Q2-Q3 2010 no carry for equity provided by partners**

20
Investment highlights
Wind
Wind power
power inin China
China is
is  Wind power in China is a very attractive (>20% Equity Return) investment
expected
expected to
to grow
grow opportunity with potential for significant growth
significantly
significantly  China installed over 13,000 MW wind power in 2009, more than 1/3 of all
new installed capacity worldwide in 2009
 Growth is fuelled by a governmental mandate of reaching 15% renewable
energy production by 2020
 5% by 2012

 Chinese Renewable Energy Law passed in 2006 provides secure, stable and
Regulatory
Regulatory framework
framework attractive framework and subsidies
supports
supports growth
growth  Good access to debt financing and cost effective turbines secure strong
and predictable cash flows
 >20% Equity Project IRR
 Electricity price is fixed for approximately the first 12 years of the project
and is sold to State Grid Company of China (30,000 operating hours)

 NBT has secured attractive land permits for more than 1,500 MW allowing for
NBT
NBT in
in excellent
excellent position
position significant growth, limited only by available funding
 NBT has signed agreement with AEI to co-invest in the wind farms and has
obtained non-recourse project financing from HSBC for its initial project
 NBT’s wind farms will generate significant cash flows, and the company will
have significant dividend capacity from 2012 and onwards
 Cash flows > NOK 90m p.a. assuming six wind farms in operation

Portfolio
Portfolio of
of wind
wind farms
farms with
with highly
highly attractive
attractive returns
returns and
and vast
vast potential
potential for
for scalability
scalability
Short
Short period
period from
from time
time of
of investment
investment to
to cash
cash flows,
flows, allowing
allowing for
for high
high dividends
dividends combined
combined with
with further
further growth
growth

21
Agenda

Investment case

Market drivers

Overview of wind farms

12

Summary

19

Appendix
22
NBT – Equity financing

NBT
NBT targeted
targeted funding
funding

NBT AS targeted funding Q2-Q3 2010 Q4 10 - Q1 11 NBT total

SG&A second half of 2010 11 11
Near-term liabilities 25 25
Corporate development* 31 31
Total NBT AS targeted funding 67 0 67

Project funding Total Capex Total equity NBT stake Q2-Q3 2010 Q4 10 - Q1 11 NBT total
Baicheng II 500 100 50 % 10 40 50
Datang I 513 120 49 % 12 47 59
Datang II 513 120 49 % 12 47 59
Datang III 513 120 49 % 12 47 59
Datang IV 513 120 49 % 0 59 59
Total project funding** 46 240 286

Other activities
Other (Lishu biomass, Pakistan wind) 10 10
Total other activities 10 10

Total targeted funding (assuming NBT retains 49-50% stake in projects) 113 250 363

Note: *incl. transaction costs for private placement

**Total project equity amounts will be lowered if all financing becomes available in Q2-Q3 2010

Note: Assuming NOK/RMB of 1.00.

23
Wind farm investment cost break down

Cost
Cost estimate
estimate for
for aa 49.5MW
49.5MW wind
wind farm
farm (RMBm)
(RMBm)

500
5 15
Other 10
450 20
Installation 15
10 3
Roads 20
Foundations
Electrical & 120
substations

Towers 50

Wind turbines 233

EPC Development fee Land Building Contingencies Total

permit fees

Note: NBT AS estimate

24
 Highly profitable near-term wind farms under
construction and development
Baicheng
Baicheng #1
#1 Baicheng
Baicheng –– future
future wind
wind farms
farms Datang
Datang wind
wind farms
3
farms3

Project size 49.5 MW 49.5 MW (per project) 49.5 MW (per project)

Under construction Under development Under construction

Status
In operation from Q4 1st completion targeted in 2011 1st completion targeted in Q4

Capex RMB 602m (100%) RMB 500m (100%) RMB 513m (100%)

Debt financing RMB 397m (66%) RMB 400m (80%) RMB 392m (77%)

Equity financing RMB 205m (34%) RMB 100m (20%) RMB 120m (23%)

Annual PPA revenues RMB 83m RMB 79m RMB 93m

Annual CER revenues RMB 13m RMB 13m RMB 16m

OPEX RMB 11m (from year 4) RMB 11m (from year 4) RMB 11m (from year 4)

Free cash flow 1 RMB 95m RMB 91m RMB 109m

Free cash flow yield

16% / 27% 18% / 34% 18% / 32%
(/)1

IRR ( / ) 10% / 20% 11% / 21% 13% / 25%

IRR incl. CERs ( / )2 12% / 26% 13% / 27% 16% / 33%

Note: ( / ) = (total capital / equity for NBT). 1) For year one. 2) CER incl. = CERs at EUR 10 included beyond 2012. Future Baicheng wind farms does not take into account development fee to NBT
nor profit sharing element to NBT for returns in excess of certain thresholds which is part of the initial Baicheng project. 3) The first Datang 200MW project is expected to have approx. RMB 50m
higher costs and a debt ratio of only approx. 77%. Future Datang wind farms have expected capex of RMB 500m per 49.5MW and 80% debt financing

25
Baicheng #I project provides predictable cash flows and
solid return on investment

Key
Key financial
financial figures
figures (RMB)
(RMB)
RMBm Free cash flow to firm  Wind farm size: 49.5 MW
100 Free cash flow to equity
90 NBT cash flow
 Load factor of 33% = production of ~136 GWh p.a.
80  Electricity tariff from state power company
70
 ~ 0.61 RMB/kWh (incl. 8% VAT) minimum
 Non-recourse project financing
30
20  ~RMB 397m
10
 ~66% of total investment of RMB 602m
0
2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17 2 0 18 2 0 19 2020  ~7.5% interest rate (year 1-3)

P&L (RMB Mill) 2011 2012 2013 2014 2015  Tax rate: 25%
Capacity 49.5 49.5 49.5 49.5 49.5
 No tax during first two years
Production (MWh) 135,940 135,940 135,940 135,940 135,940
CER quotas 154,971 154,971 154,971 154,971 154,971  Reduced tax years 3 to 5 at 12.5%

CER Price 10.0 10.0 - - -  Annual wind farm O&M cost of approx. RMB 11m
El price 0.61 0.61 0.61 0.61 0.61
 No O&M cost initial 3 years
O&M Cost per MW (0.18) (0.19) (0.20) (0.21) (0.23)
 20 years life expectancy of wind farm
Electricity revenues 83 83 83 83 83
CER Income 13 13 - - -  Possibility to re-power after 20 years
Total Revenue 95 95 83 83 83
 CER approved project
O&M cost - - - (11) (11)
EBITDA 95 95 83 72 72  Assumed CER price EUR 10
Depreciation (30) (30) (30) (30) (30)
EBIT 65 65 53 42 42  CER per MW ~1.14
Interest cost (30) (27) (22) (19) (17)
Pre tax earnings 36 38 31 23 24
Tax (9) (10) (8) (6) (6)
Tax break (first 3 years 100% tax break, year 3 to 6950% tax break)
10 8 3 3
Net Income 36 38 31 20 21

Note: Ownership assumption NBT 33% and AEI 67%. Profit sharing of AIE return above 15% of the
investment, in such a situation NBT will receive 55% of AEI’s return above 15%

26
Baicheng new wind farms

Key
Key financial
financial figures
figures (RMB)
(RMB)
RMBm Free cash flow to firm  Wind farm size: 49.5 MW
10 0 Free cash flow to equity
NBT cash flow
 Load factor of 33% = production of ~136 GWh p.a.
80
 Electricity tariff from state power company
60
 ~ 0.58 RMB/kWh
40
 Non-recourse project financing
20  ~RMB 400m
0  ~80% of total investment of RMB 500m
2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17 2 0 18 2 0 19 2020
 ~6.5% interest rate
P&L (RMB Mill) 2011 2012 2013 2014 2015
Capacity 24.75 49.5 49.5 49.5 49.5  Tax rate: 25%
Production (MWh) 67,970 135,940 135,940 135,940 135,940
CER quotas 77,486 154,971 154,971 154,971 154,971  No tax during first two years
CER Price 10.0 10.0 - - -  Reduced tax years 3 to 5 at 12.5%
El price 0.58 0.58 0.58 0.58 0.58
O&M Cost per MW (0.18) (0.19) (0.20) (0.21) (0.23)  Annual wind farm O&M cost of approx. RMB 11m

Electricity revenues 39 79 79 79 79  No O&M cost initial 3 years

CER Income 6 13 - - -
Total Revenue 46 91 79 79 79
 20 years life expectancy of wind farm
O&M cost (11) (11)
 Possibility to re-power after 20 years
EBITDA 46 91 79 68 68
Depreciation (13) (25) (25) (25) (25)
 CER approved project
EBIT 33 66 54 43 43
Interest cost (13) (24) (22) (20) (17)  Assumed CER price EUR 10
Pre tax earnings 20 43 32 24 25
Tax (5) (11) (8) (6) (6)  CER per MW ~1.14
Tax break (first 3 years 100% tax break, year 3 to 6550% tax break)
11 8 3 3
Net Income 20 43 32 21 22
Retained earnings - - - - -
Ordinary dividends 20 43 32 21 22
Extraordinary dividends - - - - -
Total dividends 20.2 42.6 32.2 20.8 22.1

Note: Ownership assumption NBT 50% and AEI 50%. Model assumes 50% operations in 2011

27
Illustration of NBT’s near-term scalability

NBT
NBT project
project potential
potential illustration
illustration overview
overview (NOKm)
(NOKm)

NPV Capex+NP Value per NBT

Total NPV NBT NPV NBT NPV ex CER Year 2010 2011 2012 2013 NBT % adjustment Capex V MW Equity % Equity equity

Baicheng
Baicheng I 90 30 30 2010 30 33 % 602 692 14.0 33 % 199 66
Baicheng II 135 67 67 2010 61 50 % 10 % 500 621 12.5 20 % 100 50
Baicheng III 135 67 67 2011 57 50 % 15 % 500 614 12.4 20 % 100 50
Baicheng IV 135 67 67 2011 57 50 % 15 % 500 614 12.4 20 % 100 50
Total - Baicheng 494 232 232 90 114 0 0 2,102 2,542 12.8 24 % 499 216

Datang JV / other future projects

Wind farm #1 223 109 109 2010 98 49 % 10 % 513 713 14.4 23 % 120 59
Wind farm #2 223 109 109 2010 98 49 % 10 % 513 713 14.4 23 % 120 59
Wind farm #3 223 109 109 2010 98 49 % 10 % 513 713 14.4 23 % 120 59
Wind farm #4 223 109 109 2011 93 49 % 15 % 513 702 14.2 23 % 120 59
Wind farm #5 223 109 109 2011 93 49 % 15 % 500 690 13.9 20 % 100 49
Wind farm #6 223 109 109 2011 93 49 % 15 % 500 690 13.9 20 % 100 49
Wind farm #7 223 109 109 2012 88 49 % 20 % 500 679 13.7 20 % 100 49
Wind farm #8 223 109 109 2012 88 49 % 20 % 500 679 13.7 20 % 100 49
Wind farm #9 223 109 109 2012 88 49 % 20 % 500 679 13.7 20 % 100 49
Wind farm #10 223 109 109 2012 88 49 % 20 % 500 679 13.7 20 % 100 49
Wind farm #11 223 109 109 2012 88 49 % 20 % 500 679 13.7 20 % 100 49
Wind farm #12 223 109 109 2012 88 49 % 20 % 500 679 13.7 20 % 100 49
Wind farm #13 223 109 109 2012 88 49 % 20 % 500 679 13.7 20 % 100 49
Wind farm #14 223 109 109 2012 88 49 % 20 % 500 679 13.7 20 % 100 49
Wind farm #15 223 109 109 2013 82 49 % 25 % 500 667 13.5 20 % 100 49
Wind farm #16 223 109 109 2013 82 49 % 25 % 500 667 13.5 20 % 100 49
Wind farm #17 223 109 109 2013 82 49 % 25 % 500 667 13.5 20 % 100 49
Wind farm #18 223 109 109 2013 82 49 % 25 % 500 667 13.5 20 % 100 49
Wind farm #19 223 109 109 2013 82 49 % 25 % 500 667 13.5 20 % 100 49
Wind farm #20 223 109 109 2013 82 49 % 25 % 500 667 13.5 20 % 100 49
Wind farm #21 223 109 109 2013 82 49 % 25 % 500 667 13.5 20 % 100 49
Wind farm #22 223 109 109 2013 82 49 % 25 % 500 667 13.5 20 % 100 49
Total - Datang JV / other future projects 4,912 2,407 2,407 295 279 700 656 11,050 14,990 13.8 21 % 2,282 1,118

Total 5,405 2,638 2,638 386 393 700 656 13,152 17,532 13.6 21 % 2,780 1,333

NPV of Total Cost of equity 13 % 386 348 548 455

Accumulated NPV 1,737 386 734 1,282 1,737

Note: Assuming NOK/RMB of 1.00

28
 Illustrative pricing based on six farms only

Illustrative
Illustrative financing
financing and
and pricing
pricing
NOKm 2010 2011 2012 2013 2014 2015
NBT AS financing* (77)
Project equity (286)
NBT project cash flow s to equity 88 125 102 78 78
Exercise of NBT AS w arrants 36
Total (363) 124 125 102 78 78

Scenario for 6 w ind farm s in NBT AS

Share price (applied in new issues) 37,5 NOK
New shares issued (m) 10
Shares outstanding (m) 29 39 39 39 39 39 39

Market cap 1 084 1 447 1 323 1 198 1 096 1 096

Net income 84 118 97 74 74

P/E
P/E (y+1)
(y+1) Valuation
Valuation for
for various
various P/E
P/E assumptions*
assumptions*
Share issue at NOK 37.5
17.3x Value per share
14.7x 14.8 (NOK)
12.3x 2011 2012 2013 2014
11.2x
P/E (y+1) 7.5x 23 19 14 14
P/E (y+1) 10.0x 31 25 19 19
P/E (y+1) 12.5x 38 32 24 24
2010 2011 2012 2013 2014
Scenario assumptions
• Construction of 6 farms with no additional growth
• 5% dividend tax assumed on dividends paid by Chinese project companies to NBT’s Hong Kong holdco

Note: Assuming share issue at NOK 37.5 per share

29
Illustrative pricing based on investments in near term portfolio

Illustrative
Illustrative financing
financing and
and pricing
pricing
NOKm 2010 2011 2012 2013 2014 2015
NBT AS financing* (77)
Project equity (286)
NBT project cash flow s to equity 88 125 102 78 78
Exercise of NBT AS w arrants 36
Total (363) 124 125 102 78 78

Scenario for 6 w ind farms in NBT AS

Share price (applied in new issues) 37,5 NOK
New shares issued (m) 10
Shares outstanding (m) 29 39 39 39 39 39 39

Market cap 1 084 1 447 1 323 1 198 1 096 1 096

Net income 84 118 97 74 74

P/E
P/E (y+1)
(y+1) Valuation
Valuation for
for various
various P/E
P/E assumptions*
assumptions*
Share issue at NOK 37.5
17.3x Value per share
(NOK) 2011 2012 2013 2014
8.4x P/E (y+1) 7.5x 34 68 91 72
4.1x 3.1x 3.9x P/E (y+1) 10.0x 45 91 121 96
P/E (y+1) 12.5x 56 113 152 121
2010 2011 2012 2013 2014

Scenario assumptions
• Post 2010 SG&A assumed financed by developers fee
• All project equity post 2010 less cash flow from farms in operation and exercise of warrants in 2011 financed by additional debt (@6% interest) backed by cash
flow from farms in operation
• No Hong Kong dividend assumed in capex period
• No CER income post 2012

Note: Assuming share issue at NOK 37.5 per share

30
Balance sheet

NBT
NBT 2009YE
2009YE and
and H1
H1 2010
2010 pro
pro forma
forma balance
balance sheet
sheet
Proforma Proforma after
NBT AS (parent company) balance conversion
NOKm 31.12.2009 30.06.2010 30.06.2010
Fixed assets 0,6 0,5 0,5
Capitalized costs 17,0 17,0 17,0
Investment in subsidiaries 17,0 17,0 17,0
Investment in other companies 1,8 1,8 1,8
Long-term receivables from Group Companies 121,3 126,3 126,3
Long-term Receicables and assets 18,1 19,0 19,0
Total fixed assets 175,8 181,6 181,6

Other receivables 0,1 0,1 0,1

Cash and equivalents 1,1 0,2 47,2
Total current assets 1,2 0,3 47,3
Total assets 177,0 181,9 228,9

Share capital 1,6 1,6 2,5

Share premium 57,3 8,2 215,0
Retained earnings and reserves -49,1 -14,0 -17,0
Total equity 9,8 -4,2 200,6

Convertible loan 152,8 157,8 -

Other loan 12,7 12,7
Accounts payable 6,0 7,0 7,0
Accrued interest 2,4 2,4
Other short term debt 8,4 6,2 6,2
Total liabilities 167,2 186,1 28,3
Total equity and liabilities 177,0 181,9 228,9

Note: NBT AS preliminary figures. Including NOK 50m private placement proceeds

31
NBT management

 Strong background in real estate development, project development and management of

industrial companies
Mr.
Mr. Arne
Arne J.
J. Myre
Myre  Experienced investor in real estate development and high tech / IT companies
Executive
Executive
Chairman
Chairman  Chairman / director on the board of several real estate and high tech/IT companies
 International experience

 Entrepreneur with more than 25 years experience in real estate development/project

development
Mr.
Mr. Joar
Joar Viken
Viken  Director on the board of several real estate companies
CEO
CEO && Board
Board
Member
Member  Investor in several real estate projects and high tech companies
 Extensive experience from China

 Substantial international financial, operating and public markets experience

 MBA in entrepreneurial management and marketing and BS degree in finance, summa cum
Mr.
Mr. Walter
Walter laude, from The Wharton School at the University of Pennsylvania
Chang
Chang
CFO
CFO  Previously CFO of Nordic Windpower and other high tech companies
 SVP in charge of mergers and acquisitions and corporate finance at Millicom International
Cellular, a NASDAQ listed, global wireless company with operations in 21 countries

32
NBT AS – Board of Directors

• Strong background in real estate development, project development and management of

Mr.
Mr. Arne
Arne J.
J. Myre
Myre industrial companies
Executive
Executive • Experienced investor in real estate development and high tech / IT companies
Chairman
Chairman • Chairman / director on the board of several real estate and high tech/IT companies
• International experience

• Entrepreneur with more than 25 years experience in real estate development/project

Mr.
Mr. Joar
Joar Viken
Viken development
Board
Board Member
Member && • Director on the board of several real estate companies
CEO
CEO • Investor in several real estate projects and high tech companies
• Extensive experience from China

• Executive Chairman of the SMA Mineral Group

Ulf
Ulf Juvel
Juvel • Prior experience from Uddeholm AB and as CEO of SMA Mineral Group
Board Member
Board Member • Significant board experience from several companies ranging from suppliers of high
technology products to the truck industry and wind power industry

• Board Member and employed by Borgestad since 1978 (CEO from 1990 until 2003)
Sverre
Sverre Stavseth
Stavseth • Controls through Sverre Invest 14.2% of the shares in Borgestad
Board
Board Member
Member • Prior experience as Director at Shipping Consultants and partner of Gunnar Knudsen
• Holds a degree in business administration

33
NBT Group – structure

NBT AS

Norway 100% 1.9% (1)

UK
Nordic
Windpower Ltd

NBT Renewable Energy Ltd

Cyprus
33.4% (2) 33% (3) 100% 100% 100% 100%

WCCI World Carbon NBT Renewable

Credit Invest Ltd Development Ltd

Sanhe Green Energy Hong NBT Enterprises Ltd NBT

Hong Kong Kong Ltd
NBT Energy Ltd
NBT International Ltd Development Ltd
Green Renewable Energy Holdings Ltd

100% 100 % 49 % 80% ( 4)

China
Sanhe Green (Lishu) NBT (Baicheng) New Energy NBT (Linxi) New Energy
New Energy Co., td. Development Co., Ltd. Development Co., Ltd.

Pakistan Zeni Wind Power

(Ptv.) Ltd.

(1) NBT AS has a total ownership in Nordic Wind Power Ltd of 1,9%, 0,4% directly and 1,5% through Deltawind AB.
(2) Option agreement to increase ownership to 67%
(3) Through a preferred share agreement, NBT has the right to certain dividends and profit split
(4) Owned by Arne Myre and Joar Viken, but will be transferred to NBT in 2010

34
CER market description

• NBT’s renewable energy wind farms fall under CDM regulations

• First Baicheng project is already approved and registered by the UN
• Credit level is decided by the UN and validation company given the pollution level of
alternative conventional energy in the area
• The 50 MW wind farm in Baicheng gets approximately 150,000 CERs per year
• NBT will get 100% of CERs from cooperation with Datang*
• Framework agreement is for 1,000 MW = 3 million tons of CERs per year
• The 60 MW (50MW + 10 MW heat) biomass power plant in Lishu gets approximately
400,000 CERs per year
• A large increase in demand for emissions reduction rights is predicted
• CER prices increasing from 10 to 30 Euros per ton will significantly improve NBT’s return

*) Datang is one of the top three largest state owned power companies in China.

35
NBT AS – top 15 shareholders

Shareholder
Shareholder overview
overview fully
fully diluted
diluted **

Investor No of shares % of total

LANI DEVELOPMENT AS 3 640 967 12,6 %
EDDA INVEST AS 2 937 485 10,2 %
DUKAT AS 2 787 786 9,6 %
AKER INVEST II KS 2 626 164 9,1 %
VIKEN, JOAR 2 447 965 8,5 %
SMA MINERAL B.V 1 431 667 5,0 %
GREEN TECH INTERNATIONAL ANS 1 400 000 4,8 %
ARCTIC SECURITIES ASA 1 387 148 4,8 %
VEDA A/S 1 285 500 4,4 %
LUK, WING SANG 1 100 000 3,8 %
BENT BUGGE AS 1 030 000 3,6 %
BORGESTAD ASA 1 010 335 3,5 %
NISTAD, EINAR SVERRE 699 375 2,4 %
BURUM, JON 408 350 1,4 %

Total 28 904 965 100 %

• Excluding 1.54 million options available for management, but not granted.

Source: NBT AS

36
 Risk factors
• An investment in the Company involves a high degree of risk, should be regarded as highly speculative, and should only be made by persons who can afford the loss of their entire investment. Accordingly,
prospective investors should consider carefully the following factors in addition to the other information concerning the Company and its business contained herein. The following factors are not to be considered to
be a definitive or exhaustive list of all risks associated with an investment in securities of the Company and its business. All statements other than statements of historical fact, included in this Presentation, including
without limitation, future plans and objectives of the Company, are forward-looking statements that involve various risks and uncertainties.
• No operating history - The Company has not yet completed the construction phase of the first wind farm, therefore not yet started operations and has only financial information for a limited period of time upon
which prospective investors can evaluate the Company’s likely performance.
• Operational Risk - The activities that will be conducted by the Company will be subject to operational risks that include competition from other businesses, performance of various suppliers and equipment vendors,
product performance warranties, regulatory risks and dependence on key personnel, all of which could affect the Company’s ability to meet its obligations and targets.
• Political risks - Changes in the legislative and fiscal framework governing the activities of the company engaged within the renewable energy sector may have a material impact on the Company’s operations. In
particular, changes in political regimes at local, regional and/or national level in China will constitute a material risk factor for the Company’s operations. Furthermore, changes in international obligations regarding
renewable energy production and trading of renewable energy certificates may have a material affect on the Chinese regulations and thereby material affect on the Company’s operations.
• Construction risk / risk related to the project’s contractual structure - The Company has entered into multiple contracts with contractors and vendors directly in relation to construction of the Baicheng 1 wind
farm and not contracted the complete project to one (or a few) main contractors on an EPC turn-key basis. While this is not uncommon in the industry, it significantly increases the execution risk and financial risk of
the Company compared to the risks of companies contracting on an EPC turnkey basis with main contractors.
• A large share of the costs related to construction of Baicheng 1 consists of equipment, supplies and civil construction ordered by the Company from various suppliers, including inter alia;
• Suzlon Energy (Tianjin) Ltd. (which is supplying the wind turbine generators, towers and civil construction for tower foundations)
• Baicheng Power Zhenlai Transformer Co., Ltd (which is supplying the box transformers for the wind turbine generators)
• Shandong Taikai Transformer Co. Ltd. (which is supplying the main substation transformer)
• There is a risk of interface problems between the various contractors’ responsibilities under the contracts. Any delays and cost-overruns which are not attributable to a contractor, or has financial exposure
in excess of the contractors' liability, e.g. liquidated damages provisions on the project would (wholly or partially) be the Company’s risk and could have a material adverse impact on the financial position of
the Company.
• Reliance on various Suppliers - The operations of the Company, particularly during the project execution phases, will require significant resources and the business will be heavily dependant on its key suppliers. If
the Company was, for any reason to be unable to maintain a business relationship with its key suppliers for deliveries of e.g. wind turbines and other equipment, its business and financial condition may be materially
adversely affected. The Company has previously experienced difficulties in obtaining timely deliveries from its suppliers due to late payments from Company, however the Company does not expect any cash flow
problems short term going forward due to the AEI Contributions and HSBC Loan now in place and therefore expect timely deliveries from the suppliers going forward.
• Real Estate - An investment in real property in China is today regarded as fairly safe and predictable, although there is always a risk related to both central government and local authorities. Some of these risk
factors are best described by giving a short insight into how the property marked in China actually works;
• Real estate sales in China take place in the form of transfer of right to use land. To obtain land-use rights, the land user must sign a land-grant contract with the local land authority and pay a land-grant fee
up front. The grantee will enjoy a fixed land-grant term and must use the land for the purpose specified in the land-grant contract. Depending on the type and purposes of land use, the maximum term of a
land grant ranges from 40 years for commercial usage, 50 years for industrial purpose, to 70 years for residential use.
• The rules regulating real estate business conducted by foreign investors consist of two levels, central government and local authorities. The central government has provided several guidelines to regulate
the land administration. The most notably are the Law of Land Administration of the People's Republic of China (1998), the Interim Rules 1990 on Sale and Transfer of State Land's Use Rights in Cities and
Towns (the 1990 Interim Rules), and the Regulations 1990 on Development and Management of Tracts of Land by Foreign Investors (the 1990 Regulations). Local authorities (provinces, cities and/or
counties) have also posted some regional regulations and policies that are applied only in particular local jurisdictions. Often local authorities offer some incentives designed to attract foreign investors. The
State Council is empowered to, on behalf of the State administer the land owned by the State. All the land in China needs to be registered and recorded.
• Although some efforts have been made, the lack of transparency in administrative procedures and arbitrary application of regulations and laws remain one of the main risk factors when foreign companies
invest in China.
• Infrastructure, including local grid and backbone access and capacity - The Company is dependant on local grid connections for each wind farm and sufficient capacity in local and central grids in addition to
other infrastructure related to both the construction and operating phase of each project. The Company informs that under the current regime local grid companies are obligated to provide local grid connections and
to purchase all electricity from renewable energy production delivered to the point of access to the local grid. However, there seem to be significant risk that either the applicable regulations will be amended and/or
that grid companies will not be willing and/or able to pay for power to the extent it is not delivered to customers due to lack of grid capacity. It is expected extensive expansion in power production in China which will
cause need for corresponding expansion of the grid capacity. Insufficient infrastructure and especially grid connectivity or capacity may (wholly or partially) become the Company’s risk and could have a material
adverse impact on the financial position of the Company.

37
 Risk factors
• Power sale and tariffs - The Company has not yet entered into power purchase agreement (“PPA”), grid connection agreement or dispatch agreement in relation to any of the planned wind farms. According to the
Company, these will be entered into immediately after receipt of the electricity power generation license which is obtainable at when the wind farm is operational. Terms and conditions of the PPA are set according
to governmental regulations and local grid company will be obligated to purchase the entire power production delivered to the local grid at a fixed tariff set by Chinese authorities, upon the Company’s receipt of the
electricity power generation license. There is risk that terms of these agreements may be amended and that tariffs may be reduced by authorities and such events may have material adverse affect on the
Company’s operations and revenue.
• Competition - The renewable energy industry is highly competitive. Many of the Company’s competitors for the production and development of renewable energy, and for capital to finance such activities, will
include companies that have greater financial and personnel resources available to them than the Company.
• Government Regulations - The operations of the Company require licenses and permits from various governmental authorities in China and the Company has been granted necessary licenses required prior to
completion of the construction phase in relation to the Baicheng 1 project. There can, however, be other licenses required in the future and there can be no assurance that the Company will be able to obtain all
necessary licenses and permits that may be required to carry out the development and construction of its other projects.
• Key Personnel - The Company’s success depends, to a significant extent, upon management and key employees. The loss of key employees could have a significant negative effect on the Company. The
Company will face competition for skilled personnel and there is no assurance that the Company will successfully attract and retain personnel required to successfully execute its business strategy.
• Global Energy Prices - Global energy prices have risen over recent years and together with governmental incentive schemes made the construction and operation of wind farms profitable. However significant
decreases in the traditional electricity costs and/or changes in energy prices locally and globally may affect subsidies schemes and materially adversely affect the Company’s business and financial condition.
• Industry Risk - The industry of renewable electricity involves a substantial degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Shareholders
must rely on the ability, expertise, judgment, direction and integrity of the management of the Company.
• Technological Advances - The industry of renewable electricity sources is susceptible to significant technological advances and the introduction of new products utilizing new technologies. Further, this industry is
also subject to changing industry standards and market trends and to competitive pressures. Due to rapid changes, the success of the Company will depend in part on its ability to gain access to products and
services that respond in a timely manner to the technological advances and evolving industry standards.
• Technical lifetime and operational risks - The technical lifetime of a wind farm is assumed by the Company to be more than 30 years, but there is a risk the wind farms will prove not to be technically able to
perform that long. The length of its commercial life will ultimately depend on its efficiency relative to future technical solutions. Unforeseen operational and/or technical problems might lead to unexpectedly high
operating costs and/or lost earnings, which may have a material adverse effect on the financial position of the Company.
• Elimination of Wind Energy Incentives - The company is dependant of the governmental incentive schemes for renewable energy in China. The company informs that the Chinese government currently
guarantees electricity prices for renewable energy producers at a fixed level and imposes local grid companies to purchase all electricity produced from renewable energy at the fixed price. Reduction in or
elimination of such incentives may have materially adverse affect to the Company’s operations and financial condition.
• Uncertainty regarding the future of the Clean Development Mechanism (CDM) - The Kyoto Protocol expires 31 December 2012, and there is significant uncertainty as to whether to CDM will be continued under
a new international agreement, and if so in what form. The absence of a new international agreement under which CDM is continued, or changes to the mechanism under a new international agreement, may have
an adverse affect on the CER price, and may thus adversely affect contemplated revenues received from the sale of emission reductions from current or future CDM projects.
• Risks related to registered CDM projects - NBT (Baicheng) New Energy Development Co., Ltd has achieved CDM registration for the Jilin Taobei Boashan Wind Farm Project, and the Company’s wholly owned
subsidiary WCCI World Carbon Credit Investment Limited has entered into a Certified Emissions Reductions Agreement under which it will purchase up to 443,174 CERs (or equivalent post-2012 emission
reductions) from the project. There is a risk that this project, will not achieve the expected amount of emissions reductions, and thus, that the project will not receive the expected amount of CERs. This can be
caused by a number of circumstances, for instance a delay in the completion of the project, which means that the total amount of emissions reductions achieved under a crediting period may be reduced.
Furthermore there is a risk that achieved emission reductions are not certified, and consequently that the expected amount of CERs are not issued. The risk will also apply to any other projects which achieve CDM
registration.
• Risk related to planned CDM projects - CDM projects planned by the Company or its subsidiaries may be ineligible for registration as CDM projects (or as projects under any equivalent mechanism under a future
international agreement). To achieve registration the projects must complete a comprehensive registration process, including being validated by a designated operational entity and being accepted by the CDM
Executive Board. There is a risk that planned projects will not meet the current registration requirements or that they will not meet future requirements, and that the project consequently will not receive CERs.
• CER market risks - Due to the volatility of the international CER market the future sale of CERs or equivalent carbon credits are uncertain, and the Company and its subsidiaries will be exposed to risks due to
fluctuations in CER Market. Due to the uncertainty regarding the existence of CDM post 2012, fluctuations are likely to occur in the future. The Company’s wholly owned subsidiary WCCI World Carbon Credit
Investment Limited has entered into a Certified Emissions Reduction agreement, under which 900,000 CERs (or equivalent post-2012 emission reductions) are sold to SMA Mineral B.V., for a price of EUR 15,
which gives the shareholders of NBT AS increased exposure to the CER market risks.
• Environmental Risks - Environmental damage may result from the Company’s projects and services. The construction of wind farms includes, among other things, land excavation and the installation of concrete
foundations. Wind farms can be a source of environmental concerns, including noise pollution, damage to the soil as a result of oil spillage, and peril to certain migratory birds and animals that live, feed on, fly over
or cross the property. The Company may also be assessed financial penalties for any environmental damage caused by its operations. Financial losses and liabilities that may result from environmental damage
could affect the Company’s business and financial condition.

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 Risk factors
• Taxation risk - The Company’s and/or its subsidiary’s own activities will to a large extent be governed by the fiscal legislation of the jurisdictions where it is operating, as its activities in most cases will be deemed to
form a permanent establishment according to the tax laws of those countries. Thus, the Company is exposed to a material risk regarding the correct application of the tax regulations as well as possible future
changes in the tax legislation of those relevant countries. In addition, the Company is to a certain extent being exposed to different rules of customs duty.
• Foreign Currency Fluctuations - The Company will be exposed to risks due to fluctuations in interest and exchange rates. Currency exchange rates are determined by forces of supply and demand on the currency
exchange markets. These forces are affected by the international balance of payments, economic and financial conditions, government intervention, speculation and other factors. Most of the Company’s costs and
income will be in RMB and the Offer is based on valuation of the Company in NOK. Changes in currency exchange rates relative to the NOK will affect the NOK value of the Company’s assets and thereby impact
upon the Company’s total return on such assets. Currency fluctuations relative to NOK of an investor’s currency of reference may adversely affect the value of an investor’s investments.
• Financial Risks - Management believes that the financial resources of the Company will be at a sufficient level to cover all of its operating and financial costs in connection with the implementation of the short-term
business plans of the Company. However, there can be no assurance that growth will be achieved at such levels or that additional financial resources may not be required due to unforeseen circumstances or a
change in the business plans of the Company.
• Risks related to Loan Agreement - The Company has entered into a loan facility of RMB 397,000,000 (the “HSBC Loan”) with HSBC Bank (China) Company Limited, Beijing Branch Bank of Communications
Co., Ltd. (“HSBC”) and various convertible loans. The terms and conditions of the loan agreements include inter alia restrictions on the operations and financial covenants affecting the Company.
• With the shareholder loan and equity subscription from AEI which comes on top of the HSBC Loan and the Convertible Loans, the construction costs for the first windfarm, Baicheng 1, will (based on the
Company’s budget) be fully funded. However, if the project suffers delays or cost overruns, additional funding will be required. Further, the HSBC Loan is divided into two facilities. HSBC has confirmed
receipt of all conditions precedent documents to the first drawdown under the first facility, Facility A of the amount of RMB 377,000,000. Drawing of the second facility, Facility B of the amount of RMB
20,000,000, are subject to further conditions being met by the borrower at the time the facility are to be drawn,
• Confirmation from HSBC Bank (China) Company Limited, Shanghai Branch that the total amount of Facility A has been fully drawn by the Borrower
• Evidence that the amount standing on the credit balance of the Offshore Reserve Account, as defined in the HSBC Loan agreement, is not less that an amount equivalent to RMB 15,000,000 as
determined by PBOC Exchange Rate, as defined in the HSBC Loan agreement, prevailing on the date on which the registration of the Baicheng 1 Project as a CDM project at CDM Executive
Board of United Nations has been completed.
• If the relevant conditions are not met, HSBC will be entitled to refuse to pay the loan to Company upon receipt of a drawdown notice, in which case the Company will need additional funds to fully finance
the construction of the Baicheng 1 project. There is a risk such funding will not be available (or, if available, only on unfavourable terms) which could have a material adverse impact on the financial
position of the Company.
• Additional Financing - The Company may acquire additional financing in order to make further investments or take advantage of future opportunities. It is expected that additional financial resources will be needed
for development and construction in relation to the Baicheng 2-4 projects and the Datang projects. The ability of the Company to arrange such financing in the future will depend in part upon prevailing capital market
conditions, as well as upon the business success of the Company. There can be no assurance that the Company will be successful in its efforts to arrange additional financing on terms satisfactory to the Company.
If additional financing is raised by the issuance of shares or other forms of convertible securities from the treasury, control over the Company may change and the Shareholders may suffer additional dilution. If
adequate funds will not be available, or will not be available on the accepted terms, the Company may not be able to take advantage of opportunities, or otherwise respond to competitive pressures and remain in
business.
• Payment of Dividends - The future payment of dividends will be dependant upon the financial requirements of the Company to finance future growth, the financial condition of the Company and other factors which
the Board of Directors of the Company may consider appropriate in the circumstances. The payment of dividends in the future is uncertain.
• Dilution - Current shareholders will experience significant dilution to their shareholdings as a result of the Offering. The Company currently has convertible loans which may result in a substantial further dilution of
the equity interests of the shareholders. Moreover, should the Company require additional funds, it is likely that to obtain the necessary funds the Company will have to sell additional securities, including but not
limited to, shares or some form of convertible security, the effect of which would result in a substantial further dilution of the present equity interests of the shareholders.

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