We are proud to inform you that the Government of Romania has retained AAE as its technical and financial advisor (Mandate signed by the Prime Minister and the Minister of Energy) to explore the potential commercial arrangements for privatization process of Romanian energy assets, the rehabilitation, repowering, and modernization of existing thermal power plants, and to develop new greenfield power projects.

As you know, after seven years of neo-communism, and more than 45 years of communist tyranny, Romania finally elected the first democratic government in half a century. Romania will be the foothold of Western Europe and a country with its sights firmly fixed on the future. The political, social, and economical conditions will be, from now on, much better than in any other Eastern European country. The comprehensive and courageous privatization program of the new Romanian government approved by the IMF is fully consistent with a market-economic framework. Right now, after seven years of neo-communism the Romanian economy is in shamble, in spite of its debt is only US$ 6 billions. However, AAE strategy is to invest in countries with miserable economy but with future potential and strategic location. It is a minimum risk and a maximum profit. The Romanian economy will recover very fast, for the following reasons:

1) Romanians are very well educated people. They are skillful and work hard. The productivity is very high although the wages are the lowest in Eastern Europe. 2) The inflation is only 50%. Within two years will come down to 10-15%. 3) Foreign investors can repatriate 100% of their profits. 4) The Romanian government is able to offer incentives and cash grants to firms that create new jobs. 5) Romania has only US$ 6 (six) billion foreign debt. That is 2.5 % of GDP.

AAE is in the process of developing a 150 MW coal-fueled cogeneration power plant inside-the- fence with Government guaranties for financing, good credit of the client (a very profitable firm), fuel supply agreement for 30 years, power purchasing agreement for 30 years and the construction site adjacent to the client facility and plenty of water. The environmental study is done by a Romanian firm. We need a leading partner in the project. If you are interested, please contact us in Houston or in Bucharest phone: 401-760-6634 fax: 401-312-1303 (temporarily, because we will be moving our offices in the Minister of Energy building).

The new democratic government of Romania has a very ambitious energy program for the next four years. It wants to start immediately the following projects:

Rehabilitation, repowering, conversion, and modernization of 5 (five) power plants with a total of 1, 500 MW. Build-own-operate (BOO) of six-50 MW inside-the-fence cogeneration power plants, in the process of being developed by AAE.

Romania has 23,000 MW installed capacity (8000 MW hydro and 15,000 MW thermal). However, it cannot supply more that 6-7,000 MW annually (50-55 billion kWh). Most of the thermal plants are old, the equipment worn out, and all of them were very poor maintained. IPP companies which will generate power in Romania can sell electricity to industry and commercial clients throughout Europe. Romania is part of the European Interconnected Grid. Hungary, Czech Republic, Poland, Slovakia and Slovenia are in acute need of electrical power.

AAE is a group of seasoned professionals with a broad range of direct and related experience in power development and management of the international IPP projects with offices in Houston, Texas and Bucharest, Romania. Our offices in Bucharest comprise Romanian engineers and professionals who worked years with RENEL, the State Utility. We feel that creating teams staffed primarily by people who are native to the country will create a long term ability for local business to actively and constructively participate in the development of the tremendous potential in Romania, and at the same time keep the cost down.

If you are interested in any of the above projects, or other projects wich will be on line in the near future, and if you want AAE to be your consulting/development company in Romania, please contact us.