The influence of Renewable Energy Law on

1

• The influence of Renewable Energy Law on
• Wind Power Industry Development
• Suzlon Experience
• Major points of concern
• Paulo Fernando Soares,
• Chief Representative Officer,
• Suzlon Energy Ltd Beijing Representative Office

2
Wind Power development in ChinaMarket Overview
Main facts

• The Chinese market in 2005 was the largest ever
  in terms of project award. In total 2,200 MW has
  been awarded. This represents 3 times more the
  total installed capacity at the end of 2004. The
  total of new installations was 498 MW, which is
  65 of the total installed capacity in China
  until 2004.
• Commitments for increase in installed capacity in
  2006 has already reached 1,145 MW and, but Supply
  Chain and Infra structure constraints will most
  likely limit installations to 800 to 1,000 MW. As
  of the end of June 2006 China installed capacity
  was 1,600 MW, an increase of 343 MW in the first
  6 months (Windpower Monthly Magazine Sep 06)
• Projects are still, in its vast majority,
  implemented by stated owned companies, linked to
  one of the big five-generation groups however,
  independent developers are slowly entering the
  market.
• The Chinese Renewable Law has been approved and
  came into force in Jan 01, 2006.

3
Market development in ChinaGrowth Forecast MW
BTM Consult ApS World Market Update 2005 / Mar
06
Azure 75,000 NEF 54,000
MAKE The Wind Forecast Market Outlook / Sep
06
Emerging Energy Research China Readies next
wind boom / Apr 2006
NEF Interesting Times Focus on Clean Energy
Inv. Opportunities in China Sep 06
Source Azure International China under the
Magnyfing Glass Workshop Sep 2006 / New Energy
Finance Interesting Times Focus on Clean
Energy Investment Opportunities in China Sep 18,
06
4
Market Development in ChinaPotential Investments
Investment forecast based on growth estimate from
NDRC
Investment forecast based on growth estimate from
New Energy Finance
Source CLP China under the Magnyfing Glass
Workshop Sep 2006 / New Energy Finance
Interesting Times Focus on Clean Energy
Investment Opportunities in China Sep 18, 06
5
Market development in ChinaProjects Installed by
Region

• Regional Developments
• The major wind development has been concentrated
  where resources are most abundant such as Inner
  Mongolia, Jilin, Xinjiang and Ningxia
• Wind Power has also a market where grid is
  sufficiently developed near demand centers such
  as Hebei, Guandong and Liaoning, and the wind
  industrial base such as Xinjiang and Jiangsu
• Manufacturing bases are clustered around
  Xinjiang, Tianjin, Liaoning and Jiangsu, where
  major growth is expected, along with Inner
  Mongolia and east coastal area
• Potential offshore development is likely to
  concentrate around bohai bay (Shandong, Tianjin
  and Dalian), Jiangsu and Shanghai, Taiwan Strait,
  Guanding and Nanao region

Source NDRC / Emerging Energy Research China
readies next wind Boom / April 10, 06
6
Market development in ChinaGrowth Comparison
China Targets x USA x Germany
US and German Values have been shifted forward by
10 years
Source Azure International Quantifying and
Enabling Selected RE markets in China / BTM
Consulting - Ten Year Review Final - Sep 2005
7
Wind Power Pricing Strategy Est. Average
Full Load Hours

• Despite its very high wind potential, the
  estimated Full Load hours/year in China is not
  especially good therefore, considering the
  combined impact of the Full Load hours and PPA
  values, it is very important that
• Wind measurements are made on a full year basis
• Existing wind data must be audited by qualified
  companies
• Met masts and mesuring devices must be carefully
  verified (location in relation to the wind site
  and IEC compliance)
• Turbine suitability must be seriously verified

BTM ApS World Market Update 2005 Forecast
2006-2010 March 2006
8
Wind Power Pricing Strategy Est. Average
Tariff Euro-cent/kWh Concession Projects
Euro 1 USD 1.2 USD 1 RMB 8.0 (Feb 28, 2006)
Tariff prices in China are in the low end of the
World market, and the values for concession
projects are shifting to even lower
values Non-concession projects have, generally,
a better PPA value (from RMB 0,55/kWh to RMB
065/kwh) Projects lt 50 MW, approved by the
Provincial Reform and Development Commission,
have generally better PPAs, as local governments
wants to attract investments many times
associated with the implementation of
manufacturing facilities 70 localization ratio
is required for both concession and
non-concession projects.
BTM ApS World Market Update 2005 Forecast
2006-2010 March 2006
9
Wind Power Pricing StrategyPPA development
Adjusted Curve Concession Projects
Average Prices before 2004 RMB 0.72/kWh
Average Prices after 2004 RMB 0.47/kWh
Huarui - Vestas
Longyuan - GE
10
Wind Power Pricing StrategyConcession Projects
2006 Huitengliang 2x300 MW
Two separate 300 MW projects have been
awarded. One project will be developed by China
Guangdong Nuclear Energy Co. The feed-in tariff
for this concession will be the RMB 0.42/kWh. The
WTG supplier is Dong Fang North Union Power
Company is a venture company with shareholders
China Huaneng Group (51), Zhongxin Taifu Co.
Ltd. (20), Shenhua Energy Co. Ltd. (20), and
Inner Mongolia Electric Power Investment Co. Ltd.
(9). According to North Union Powers website,
the project will be developed by Inner Mongolia
North Longyuan Wind Power Co. Ltd. - a venture
between North Union Power Company and the
Longyuan Group. The WTG supplier is Dalian Heavy
Industries (Dalain Huarui)
Source Azure International Sep 18, 06
11
Wind Power Pricing Strategy Concession
Projects 2006 Baotou Bayin 200 MW
The Baotou Bayin concession was awarded to
Longyuan Power Group Hero Asia Company Ltd, the
second lowest bidder for this concession. China
Longyuan Power Group is a subsidiary of Guodian
and is Chinas largest wind project developer at
present. Hero Asia Co Ltd. Is a wholly-owned
off-shore subsidiary of Longyuan. Longyuans
website confirms the feed-in tariff is RMB 0.4656
kWh including VAT, as per the bid. The WTG
supplier will be Goldwind, which will use an
untested 1,500 kW Direct Drive machine designed
by Vensys.
Source Azure International Sep 18, 06
12
Wind Power Pricing StrategyConcession Projects
2006 Hebei Danjing 200 MW
Hebei Danjing was awarded to China Energy
Conservation Investment Company (CECIC) and Hong
Kong Construction Holding Co. Ltd. CECIC is
Chinas state-owned renewable energy investment
firm. The company has a wholly-owned subsidiary,
Beijing Guotou Energy Conservation Co. which is
developing Zhangbei Manjing I in Hebei (45MW),
with potential up to 1 GW, and TuoLi in Xinjinang
(45MW), where a further 55MW development is
expected. In July, CECIC bought a 47.5 stake in
wind turbine manufacturer, Zhejiang Windey Wind
Generating Engineering for MUSD 5.0m, which will
be the WTG supplier. Hongkong Construction
Holding is a HK-listed civil engineering,
construction and power company. Its largest
shareholder is Shanghai Construction Group (24),
and they have invested a 60 MW wind farm in
Heilongjiang.
Source Azure International Sep 18, 06
13
Wind Energy in China by Developers Major Players
development pipeline MW
National utilities and provincial eletric power
comapnies lead the market. Longyuan, a
subsidiary of Guodian is one of the earliest
participants and most active and ambitious in the
wind project development. The company owns over
30 of the national wind assets in various
provinces and has a target growth rate of 400 MW
to 500 MW/year Huaneng and Datang, second and
third largest owners of wind assets have set up a
number of JVs with foreigner partners such as
Korea Electric Power and CLP CPI and Guohua
(subsidiary of Shenhua Group) have planned to
improve their positions in wind development. CPI
set a target of 1GW by 2010, and Guohua recently
announced the development of 1GW Hebei Shangyi
project
Longyuan 3,000 MW by 2010 Huaneng 2,400 MW
by 2010 NEF Interesting Times Focus on Clean
Energy Inv. Opportunities in China Sep 06
Source Emerging Energy Research China readies
next wind Boom / April 10, 06 Suzlon Energy
(Tianjin) Ltd
14
Localization Guidelines Turbines Made in
ChinaGovernment Request and contractual
obligations
15
Major Chinese Wind Turbine ManufacturersSOE and
Private companies
Equipment
Manufacturer
SOE SOE (CECIC) SOE SOE SOE SOE SOE SOE
600 kW / 750kW Developing a 1,500kW WT 49
750kW WT 54 800kW WT 77 1,500kW FL1500
1,500kW MD 70/77 1,500kW Developing a
1,250kW Agreement for 2,000kW MY1.5se
1,500kW FL1000 1,000kW Z72 2,000kW
Goldwind Zhejiang Yunda Windey Dalian Heavy
Machinery Dongfang Electric Group SEC Mingyang
Baoding Huitang Xiangtan
Source Company Websites and Press Releases and
Emerging Energy Research China readies next
wind Boom / April 10, 06
16
Major Foreign Wind Turbine ManufacturersJoint
Ventures
Equipment
Manufacturer
Set-up and Yearly Capacity
Partner

• AW70/77 1,500kW
• N43 600 kW
• N60 1,300 kW
• S70/77 1,500kW
• S70/77 1,500kW
• MM70 2,000kW
• MM82 2,000kW
• GE1.5 1,500kW
• se/s/sle/sl/xle

Acciona Nordex REpower GE
Nacelle Assembly 400WTG / 600 MW Nacelle
Assembly / Blade Mnf Blade Mnf Nacelle
Assembly Up to 200 MW Nacelle Assembly / Blade
Mnf 75 WTG/110 MW Nacelle Assembly (2008) 100
WTG (up to 400 in 2010) Gear Box Development
JV JV 1 JV 2 JV 3 JV 4 JV JV
Acciona 45 / CASC 45 Inceisa 10 Xian Aero
Engine Co Baoding Ningxia Electric PG 40
Ningxia Tianjing El. En. Group 10 Dongying
REpower 50 North Heavy Ind. Co. (NHIC)
33.4 Honiton Energy 16.6 Nanjing High Speed
Accurate Gear Company (NGC)
Source Company Websites and Press Releases and
Emerging Energy Research China readies next
wind Boom / April 10, 06
17
Major Foreign Wind Turbine ManufacturersWhole
Owned Enterprises
Manufacturer
Gamesa Vestas Suzlon GE
WOFE WOFE WOFE WOFE
Source Company Websites and Press Releases and
Emerging Energy Research China readies next
wind Boom / April 10, 06
18
Wind Power development in ChinaCountry Snapshot
Source Emerging Energy Research China readies
next wind Boom / April 10, 06
19
Conclusion 1

• The rapid increase in the size of the market
  2004/194MW 2005/498MW 2006/1,000MW will put
  a heavy strain in important part of the industry
• Supply Chain (which also plays an important role
  in the global business)
• Qualified personnel The established companies
  will have problems to build-up capability,
  especially in the technical side.
• Furthermore
• There will be overcapacity in the market (in
  maximum two years)
• Intensive price pressure for the foreign
  suppliers (due to low PPAs, competition from
  local players, and overcapacity)
• Chinese government allocation of projects to
  local companies (see concessions projects 2006)
• Intention of local project developers to produce
  its own WTG

The Honeymoon will soon be over, and only the
most prepared companies will survive
20
Conclusion 2

• All aspects of the Wind Power Market considered
  and taking into account the peculiarities of the
  Chinese business environment, we believe that
• The more control you have over the supply chain,
  especially for key components such as generator
  and gear boxes, the better control you have to
  lower your cost and guarantee supplies. This is
  especially important in China with the
  localization request guidelines and the constant
  changes in the law
• Human Resources is the most important aspect of
  the Wind Power Business in China, and, extra
  attention must be given to areas such as Wind
  Site, erection supervision and OMS, technical
  support and Project Management. Chinese wind
  power business is not mature enough for the speed
  of its development and there is a significant
  lack of specialists

The best strategy for the Chinese Market is long
term commitment, not quick solutions!!!
21

• Q A

22
Paulo Fernando Soares ProfileCRO Suzlon
Energy Ltd / Beijing Representative Office

• Paulo Fernando Soares has joined Suzlon Energy
  Ltd as Chief Representative Officer in Jul 2005.
• Previously to Suzlon, Paulo has worked fro 15
  years in the Hydro Power business, in Brazil and
  China, where he has developed extensive
  experience in the areas of Manufacturing, Project
  Management, Engineering, Cost estimate, Project
  Cost Control and others. He was an employee from
  Siemens Hydro in Brazil from 1988 to 2000 and
  from Voith Siemens Hydro in China from 2000 to
  2005.
• Paulo has 5 years experience in the Hydro-Power
  Business industry in China, dealing with all the
  five power group companies, and was responsible
  for the execution of major projects.
• At Suzlon, Paulo has taken the responsibility to
  establish the Beijing Office and has successfully
  negotiated the first ever Suzlon contracts in
  China
• Huitengliang 50 MW Inner Mongolia Guohua
  Energy,
• Weihai 50 MW Shandong Guohua Investment
• Zhuozi 40 MW Inner Mongolia Datang
  International
• Liuao 45 MW Fujian Province Datang Group
• Bailingmiao 50 MW Inner Mongolia Honiton
  Energy (Baotou) Co.
• Paulo has a bachelor degree in Mechanical
  Engineering at Faculadade de Engenharia
  Industrial FEI and a Executive MBA in General
  Management at Fundação Dom Cabral FDC, both in
  Brazil.

23
Safe Harbor

• Except for the historical information contained
  herein, statements in this presentation, which
  contain words or phrases such as "will", "would",
  "expect", "believe", and similar expressions or
  variations of such expressions may constitute
  "forward-looking statements". These
  forward-looking statements involve a number of
  risks, uncertainties and other factors that could
  cause Suzlon Energy Limited's (the "Company's")
  actual results to differ materially from those
  suggested by the forward-looking statements.
  These risks and uncertainties include, but are
  not limited to, the performance of the Indian
  economy and of the economies of various
  international markets, the performance of the
  wind power industry in India and world-wide,
  competition, the Company's ability to
  successfully implement its strategy, the
  Company's future levels of growth and expansion,
  technological implementation, changes and
  advancements, changes in revenue, income or cash
  flows, the Company's market preferences and its
  exposure to market risks, as well as other risks.
  The Company undertakes no obligation to update
  forward-looking statements to reflect events or
  circumstances after the date thereof.
• This presentation and any information presented
  herein are not, and are not intended to be,
  offers to sell nor solicitations of offers to buy
  the Company's equity shares or any of its other
  securities and shall not constitute an offer,
  solicitation or sale in any jurisdiction in which
  such offer, solicitation or sale is unlawful
• The Company's equity shares have not been and
  will not be registered under the U.S. Securities
  Act 1933, as amended (the Securities Act), or
  any state securities laws in the United States
  and, as such, may not be offered or sold in the
  United States or to, or for the benefit of, U.S.
  persons (as such term is defined in Regulation S
  under the Securities Act) absent registration or
  an exemption from the registration requirements
  of the Securities Act and applicable state laws.
  Any offering of the equity shares to be made in
  the United States (or to U.S. persons) was made
  by means of a prospectus and private placement
  memorandum that may be obtained from the Company.
  Such prospectus and private placement memorandum
  will contain detailed information about the
  Company and its management, as well as financial
  statements.

V2010806
24

• Supporting Slides

25
Suzlon Business StrategyVertical integration

• Technology leadership
• Cost leadership
• Control over supply chain
• Improved quality control
• Improved service support
• Reliability

Benefits
26
Suzlon Business StrategyVertical Integration
Main Components
Blades
Gearbox
Generators
Controls
Castings and Forgings
Vertical integration provides a unique
opportunity to leverage on RD capabilities
throughout the entire component chain
27
Suzlon Business StrategyMarket Strategy
The different maturity levels strongly support
the market opportunities
28
Suzlon Business StrategySourcing Management
Vertical integration provides strong control over
critical components, but implies the art of
balancing different capacity requirements
throughout the supply chain
29
Suzlon Manufacturing Facility
TianjinConceptual View
Suzlon Energy (Tianjin) Limited 706, Huake
Incubation Centre, No.3, Kaihua Dao, Huayuan
Industry Park, Tianjin Hi-Tech Park, Tianjin
30
Suzlon Manufacturing Facility TianjinBasic
Infra-structure
Shed 6 Nacelle Assembly 580 WT/Year Completed
on Aug 15, 06
31
Suzlon Manufacturing Facility TianjinBasic
Infra-structure
Shed 3 - Blade Factory 4 production
lines Expected Completion date Oct 15, 06
Shed 1 Nacelle Cover Nose Cone Expected
Completion date Oct 15, 06
32
Suzlon Manufacturing Facility TianjinBasic
Infra-structure
Shed 4 Composite Warehouse (Blade and Nacelle
Cover/Nose Cone) Expected Completion date Nov
15, 06
Shed V-VII WTG Assembly Warehouse WTG Assembly,
Generator, Gear Box Expected Completion date Nov
15, 06
33
Suzlon Consolidated financial highlights
Sales
EBITDA
PAT
MUSD
USD 1 INR 45
34
Suzlon Stand alone Financial Highlights Q1
Sales in MW
Sales
MUSD
301
77
The sales of WTGs for Q1 FY07 do not include
sale of tubular towers aggregating MUSD 20.0
35
Suzlon Expansion PlanNew Investment Updates
CAPEX Plans

• Rotor Blade Testing Facility in India
• Asias 1st Rotor Blade Testing Facility at
  Vadodara
• Technical tie up with Knowledge Center WMC, a
  unit of TU-Delft
• Capital outlay of approx MUSD 6.5
• Facility will conduct Life Cycle destructive
  test on rotor blade

36
Wind Power in China by Product New Installations
x Contracts Awarded in 2005
37
Wind Power Pricing StrategyConcession Projects
2006 Evaluation Criteria

• Power Purchasing Agreement value 25 Points
• Localization 35 Points.
• 70 Localization plan/feasibility,
• 30 Technology proven WTG technical advantage
• Investment and Financing ability 10 Points
• Finance Plan 10 Points.

• Technical Solution 20 Points
• 10 feasibility study report,
• 12 wind resource analysis,
• 13 WTG type selection layout estimated Power
  Output,
• 15 Electric works,
• 10 Civil works,
• 10 Construction organization design,
• 15 Project investment budget,
• 4 Project acceptance standard,
• 4 Project operation plan,
• 3 Disassembly standard,
• 4 QAQC Plans

38
Wind Energy in China by Developers Contracts
Awarded in 2005
24 active players in the market
39

• Competitor Information

40
Foreigner Competitors in ChinaVestas
41
Foreigner Competitors in ChinaAcciona
42
Foreigner Competitors in ChinaGamesa
43
Foreigner Competitors in ChinaNordex