EFTA01366657.pdf

Amendment #4 Page 228 of 868 JNr ,p tor mi. companies are usually Mort term in &moon typcaly ore year subject to annual extensions. Under China's Renewable Energy law. the grid convenes are otagated to accept all energy produced by dry lensed and teeming solar and wn:l energy projects In practice, however, solar and wind energy projects have teen subject to curtailment by gid corrpantes due to transmission capacity and other reastructure oonstrarts Solar and wind energy projects owned in whole or m part by foreign unties we also subject to the general (omen tnvestireM tegulalcry regime adminstered by the Minstry of Commerce, or 'MCPCOM: and State Administraton d Foreign Exchange. Foreign investment on the solar and vend power Misty a currently listed by LICPCOM as an *encouraged' teeny, Yawn means new solar or wit energy projects may te developed by a wholly foreign owned enterprise on the same basis es they may be developed by a domestic enterprise. However, if a foreign investor seeks to acquire a solar or wit project (whether cpentrg or under construction) it must obtain the approval of ether the national office of MOFCOM or its regorel offices (depending on the total monetary value of the project at structue of the acgasition) Under current Chnese law, acquisition of a solar or wind energy project bye foreign party does rot in itself require approval from State Admission of FOttncrl Exchange. Du ay foreign loans issued by * foreign party (including shareholder loans) must be registered with SAFE before they rnay be disbursed Brad The National Electnc Energy Agency. or ire 'ANEEL: and the Energy Research Company are ire predominant regulatory bodes governing electric energy chstribution in Rani These governmental agencies are responsible fa enacting rules and regulations related to, among others granting Meeses to enter the eiectreity generation rmrkd. Wing tariff rates regulating the auction process used to award energy production coded* and establishing the reentim structure for producers of renewable energy The electricity sector in Brazil es divided into two markets (i) the regulated market where electnc energy is supplied at rates and tariffs set by a government-owned distnbdon companes. and (ii) the free market. in which any supplier (generators. dstritutors seff.poducers. it skive din it producers. traders of energy. etc ) can drecIty sell energy to consumers at market rates with the prior approval of the ANEEL Nth respect to the regulated market ten ANEEL estatashed an auction system foe awarding contracts for the production of renewable energy. Domestic and foreign companies (solely a in consortium), private equity funds and specel purpose vehicles we elgble to bid at auction In case of a corsonum. the consortium partiesare pnty bade for all obligations arising from the auction rules aid tre resulIng PPA. If a foreign company prevais al auction. it met ircorporate a &eyrie, company to enter into the PPA Bidders we regime/ todeposit a bid bond equal to 1% of the peed estimated cosi. which must be declared by the bidder and approved by the ANEEL beforehand. Teas bond is returned ale( the contract is signed if the bidder wins the auction, otherwise rt is returned immediatey following the auction Auction wirers also need to depose a project petrel:Trance bond equal to 5% of the investment cost mat a released after avian project milestones are completed. Several penates are applicable in the event d dedy m Waving Wan milestones set in the PPA contract and In the ANEEL authorization Among other dared everts, the ANEEL has the net( to 'emirate the contract if a delay n advent mentelles exceeds one year Brazilian Woe does not restnct the foreign ownership of electnety generati-g <octanes but a company perticipatng in the electric energy sector must be incorporated tnder Bataan law 220 http://cfdocs.btogo.com:27638/cf/drv7/pub/edgar/2015/07/20/0001193125-15-256461/d78... 7/20/2015 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0058185 CONFIDENTIAL SDNY GM_00204369 EFTA01366657