Greece Legal and economic framework for photovoltaics Dr

Greece: Legal and economic framework for photovoltaics Dr. Yannis Kelemenis 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

O u t l i n e § Profile of Kelemenis & Co. § Size and dynamics of the Greek PV market § Incentives and feed-in tariffs § Licensing and grid access § Connection to the grid and Operator Agreements § Corporate Environment § Tax Environment 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

Firm Profile Kelemenis & Co. is an Athens-based law firm providing quality legal services in the key corporate and commercial areas. The firm advises a varied client base that includes corporations, governments, large institutions and high-net-worth individuals. The firm draws on a team of lawyers with excellent academic qualifications from world-class universities (e. g. Oxford, Cambridge, Harvard, Heidelberg). Kelemenis & Co. has built a reputation for acting on complex, high volume cross-border transactions for a range of corporate and financial institution clients. The firm's track record spreads across an array of sectors including energy, infrastructure, hotels, leisure, real estate, retail and technology. Although Greece has been the focal point of the firm's activities, the firm has been active in Southeast and Eastern Europe where it advises local governments on legal approximation with the EU acquis communautaire and international investors on their cross-border ventures. Kelemenis & Co. enjoys excellent rankings in all leading international legal directories and is a recommended law firm in all key practice areas. The firm is regularly invited to contribute the Greece chapter to commercial law handbooks published by highly regarded international publishers. Kelemenis & Co. is a member of several professional associations and chambers. It is a sustaining member of both the British Hellenic and the Greek American Chambers of Commerce. The firm is the Greece member of Multilaw, a leading global law network consisting of more than 65 law firms worldwide and over 6, 000 lawyers in over 150 commercial centres. Being part of the Multilaw network ensures an instant global reach for clients who require multi-jurisdictional legal advice. Well-regarded. . . able to advise on complex issues. . . received high plaudits due to the outstanding cross-border practice. . . " PLC Which Lawyer 2007 "A practice which has shown promise since its inception. . . The practice impressed the market. . . " IFLR 1000 2008 ". . . advised on some of the biggest deals in the Greek market of the past year" World Tax 2008 "Clients. . . praise the firm's 'deep knowledge and expertise within different industries and jurisdictions', and Anglo-American style of service. " Legal 500 2007 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

Kelemenis & Co’s Energy Practice The firm has built a strong reputation for its energy practice not only in Greece but in the wider region of southeast Europe. The practice, which is headed by name partner Dr. Kelemenis, is well-versed into both transactional and regulatory work. It has advised, inter alia, the regulators of Greece (RAE) and FYR Macedonia (ERC) and the governments of Romania, Moldova, FYR Macedonia and Albania. The firm has also been advising several energy undertakings in Greece and in southeast Europe and provides a one-stop shop service in any of the countries that make part of the Regional Energy Market of Southeast Europe. Scope of Work § Energy Regulation § Energy Infrastructure/PFI/PPP Projects § Energy Acquisitions and Disposals § Energy Finance § Energy Disputes The Team The practice is supported by a team of lawyers with excellent academic qualifications from world-class universities and often draws upon a pool of economists, analysts, engineers and senior consultants to ensure the comprehensive management of its assignments. The firm is regularly invited to contribute chapters to leading international publications on energy. It is the author, inter alia, of the Greece chapter for the loose-leaf "Energy Law and Regulation in the EU" (Sweet & Maxwell), the leading energy law publication in Europe; and of the chapters on Oil and Electricity Regulation in the “Getting the Deal Through Series” published by the International Bar Association and the Global Competition Review. The People Dr. Yannis Kelemenis Tom Kyriakopoulos Manya Tsoumita, LL. M. (Berlin) Georgia Stagaki Iro Stamataki, LL. M (Heidelberg) 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

DEVELOPMENT OF THE GREEK PV MARKET 1. Introduction of Statute 3468/2006 on the production of electricity from renewable energy sources 2. By 31. 12. 2008 the total licensed capacity is scheduled to come up to 350 MW for the interconnected system and to 140 MW for the non-interconnected islands 3. By 31. 12. 2009 the total licensed capacity is scheduled to come up to 450 MW for the interconnected system and to 180 MW for the non-interconnected islands Regions Total power (MWp) <20 KWp (MWp) >20 and < 150 k. Wp (MWp) >150 and <2 MWp (MWp) >2 MWp (MWp) East Macedonia's and Thrace 45 4, 5 15 13 12, 5 Central Macedonia 60 6 24 15 15 West Macedonia 10 1 3 3 3 Epirus 18 1, 8 5, 4 Thessaly 55 5, 5 16, 5 Ionian islands 15 1, 5 4, 5 West Greece 60 6 18 18 18 Central Greece 60 6 18 18 18 Peloponnese 122 12, 2 36, 6 Attica 40 4 12 12 12 Thessaloniki's Prefecture 15 1, 5 4, 5 Total 500 50 157, 5 146 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

The Rising Interest in the Greek PV Market and Recent Developments in the Granting of Licenses 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

Incentivation for PV projects (1) § Financial support for the construction of PV parks has been generously provided by the State, primarily as part of the so-called Operational Program for Competitiveness (OPC) and the investment incentives under Statute 3299/2004. The OPC has drawn resources from the EU Third Community Support Framework to provide state aid to alternative energy sources. State aid accounts for 30% of the eligible cost of the projects and can go up to 50% in the case of construction of transmission lines connecting renewable energy plants to the electricity grid. OPC is now subject to the Fourth Community Support Framework. § Statute 3299/2004 introduced substantive and procedural changes to the regime of state aid to corporations and provides for various types of incentives (i. e. cash grants, leasing subsidies, tax relief and a cash grant for payroll expenses relating to employment created by an investment). The law was partially amended at the end of 2006 to be harmonized with the new regional aid map that will apply to the EU for the period from 2007 to 2013. § Statute 3468/2006 on RES introduced an additional incentive for the generation of electricity from PVs. According to article 24, every producer of electricity from RES who obtains a production license has to pay, when starting his commercial activity, a special rate to the Greek Transmission System Operator (HTSO) amounting to 3% of the sale price, excluding VAT. However, this same article exempts PV producers from this obligation. 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

Incentivation for PV projects (2) FEED-IN TARIFFS OF ELECTRICITY PRODUCED FROM R. E. S. Price of Energy (€/MWh) Energy production from: . (a) Wind Energy Connected Syctem Non Inter- Connected Islands 75, 82 (b) Wind Energy produced from off-shore wind parks (c) Hydro energy produced from hydro power plants of a capacity ≤ (15) MWe 87, 42 92, 82 75, 82 87, 42 452, 82 402, 82 502, 82 452, 82 252, 82 232, 82 272, 82 252, 82 (h) Georthermal energy, biomass, gas emitted from landfill area and from biological treatment plants and biogas 75, 82 87, 42 (i) Other R. E. S. 75, 82 87, 42 (j) CHP 75, 82 87, 42 (d) Solar Energy produced by PV power stations of a capacity ≤ (100) k. W (e) Solar energy produced by PV power stations of a capacity > (100) k. W (f) Solar energy produced by non-PV systems of a capacity ≤(5) MW (g) Solar energy produced by non-PV systems of a capacity > (5) MW 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

Incentivation for PV projects (3) PROPOSED NEW FEED-IN TARRIFS 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

THE 3 -STEP LICENSING PROCEDURE · Production License / Exemption from obligation to obtain a production license · Connection terms · Environmental terms approval · Installation license (for power stations over 150 Kwp · Contracts for Connection and Purchase · Operation License (for power stations over 150 Kwp Application for granting Electricity Production License (RAE) Preliminary Environmental Assessment and Evaluation RAE forwards the Preliminary Report on Environmental Impact to the Authority that is responsible for environmental licensing Electricity Production License RAE / Ministry of Development Determination of the connection terms to the System or the Grid (The offer) (DESMIE / DEI) Environmental Terms Approval Intervention or Concession Approval (Secretary General of the Region / Local Forest Authority) Installation License (Secretary General of the Region / Dept. of Planning & Development) Contract for the connection with the System and the Grid (DESMIE / DEI) Power Purchase Agreement (DESMIE / DEI) Operation License (Secretary General of the Region / Dept. of Planning & Development) 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

THE EVALUATION PROCEDURE Launch of Procedure Stage 1 of Evaluation of a single application Review of the Application’s requirements ØNational Security ØLocation of the project ØTechnical-economic capability of the applicant ØEnvironmental matters ØTechnical quality of the application dossier ØEnergy efficiency of the project and prospects of feeding the produced energy into the grid ØTechnical-economic efficiency of the project Positive Opinion of RAE Old projects without any Installation/Operating /Environmental problems Preliminary positive review Negative Opinion RAE Rejected Applications Conflict with other projects ? Stage 2 of Evaluation Comparative Evaluation of conflicting projects Impediments in cases of: ØConnection to the grid ØOverlaps ØSaturation of region Positive Opinion of RAE Preliminary positive review End of Procedure Rejected Applications Negative Opinion RAE 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

APPLICATION FOR GRANTING THE PRODUCTION, INSTALLATION AND OPERATION LICENSE PROCEDURE DEPENDING ON THE CAPACITY OF THE PV STATION [1] Photovoltaic systems of capacity > 20 Kwp [2] Photovoltaic systems of capacity 20 ≤ 150 (k. Wp) [3] Photovoltaic systems of capacity > 150 k. Wp [4] Photovoltaic systems of capacity 150 -2. 000 Kw. P and >2000 k. Wp Application for Production License Part 1 – Details of the Applicant Part 2 – Description of the project Part 3 – Technical Proposal Part 4 – Securing the right to use the area where the power station will be installed Part 5 – Preliminary technical evaluation Part 6 – Business plan Part 7 – Overall business plan Part 8 – Economic viability of the applicant to materialize the project Part 9 – Warranties and supporting documentation Application and Procedure for the Establishment License including approval on environmental terms Application and Procedure for the Operation License 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

REQUIREMENTS OF CONNECTION WITH THE SYSTEM AND THE GRID AND STANDARD TERMS OF OPERATOR AGREEMENTS Granting of all the necessary licenses §Installation license §Operation license §Approval of Environmental Terms NB. The terms of connection to the system are strictly technical. The local branch of PPC examines the necessity, for instance, of a transformer, power substation, length of cable etc. ) Duration: 10 + 10 (or 20 years under pending amendment) Cost of Connection: Charged on the holder of the installation license Standard Terms of Operator Agreements (e. g. duration, risk allocation etc) 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

Corporate Environment § Legal forms of PV firms operating in Greece § Types of Corporation: Companies Limited by Shares and Companies with Limited Liability § Procedures of establishment, maintenance and corporate governance § Costs § Transfer of licenses and change of ownership in PV firms 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

Tax Environment and Criteria for Providing Credit Facilities by Greek Banks Tax Matters Main Taxes on Corporate Transactions Dividends Share Acquisitions and Disposals Asset Acquisition and Disposals ‘ Mergers Joint Ventures Company Re-organisations Criteria for Providing Credit Facilities by Greek Banks §Financing of this kind of Projects comes up to 40 -50% of the total investment cost §Decision based on: - Detailed Project Description and Substantial Feasibility Study of the Project. - Certified measurements for the location of the Project - Final and detailed Project cost (based on offers) - Financial structure of the project and proof of necessary amount of equity (bank references, financial statements etc. ). - Land ownership; terms & conditions of the lease contract, if this is the case. - Issuance of all necessary (at each stage) permissions and licenses. - Definition of the company’s structure of the Project Owner. - Brief Company Profile and Financial Statements of the Owner of the Project and its shareholders (previous experience and business activities) 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

Yannis Dr. Kelemenis is the founder and managing partner of Kelemenis & Co. He obtained his LL. B from the University of Athens and his Kelemenis M. Phil and D. Phil degrees from Oxford University. He went up to Oxford on a Rhodes Scholarship awarded by the John Cecil Rhodes Trust of Oxford University. Dr. Kelemenis' expertise lies primarily in corporate and commercial matters, corporate fraud, and litigation. In terms of sectoral expertise, he has been heavily involved in energy and natural resources. He has been repeatedly selected by the EU Commission and the World Bank to advise on the legal approximation of Eastern European transition economies with the EU acquis communautaire. In so doing, he has advised the governments of FYR Macedonia, Moldova, Romania, Serbia and Albania. Dr. Kelemenis is a recommended lawyer for M&A, corporate & commercial work, energy, and litigation in all leading international legal directories (e. g. PLC Handbooks, European Legal Experts, Legal 500, Chambers & Partners, IFLR). PLC Which Lawyer 2008 describes him as a “prolific and respected deal-focused corporate advisor with acknowledged advisory experience in deals involving the hotel and leisure, energy and food industries”, whereas Legal 500 2008 as “a versatile business lawyer who can inspire colleagues and clients alike”. Dr. Kelemenis is authorized to appear before the Supreme Court of Greece. Dr. Kelemenis has authored several articles and chapters in edited volumes including the Greece chapter for Sweet & Maxwell’s leading loose-leaf publication “Energy Law and Regulation in the EU”, as well as the Greece chapter on both Electricity and Oil Regulation for the “Getting the Deal Through Series”; on renewable energy for the "Renewable Energy Finance Yearbook 2007/2008" published by Euromoney; on M&A for the "European M&A 2007/2008” published by the Global Competition Review; and on dispute resolution for ICGL’s "Litigation & Dispute Resolution 2008" and PLC’s “Dispute Resolution Handbook 2008/09”. He was recently commissioned by Oxford University Press to write the Greece chapter for the Digest of Commercial Laws of the World. 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com

THANK YOU 5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: enquiries@kelemenis. com, W: www. kelemenis. com