ETHANOL BIO-FUEL PROJECT in Moldova Millennium Group

1. ETHANOL BIO-FUEL PROJECTin MoldovaMillennium Group

2. C O N T E N T

3. Why invest in ethanol? • The demand is [and will be] constantly increasing • Both major global concerns – (1) environment and (2) alternative fuel/energy – have found ethanol as an important contributor. • Governments are becoming more aware and reponsible toward the environmental problems, enforcing CO2 reduction targets and policies. • Political and economic concerns are stimlating policies for lowering oil dependency of major industrialized contries and regional organizations (particularly Europe). • Oil prices keep high for political and demand reasons.

4. Why invest in ethanol? The demand is [and will be] constantly increasing • The EU directive 30 of may 1998 sets the minimum 2% consumption of renewable starting January 1st 2006. by 2010, member states need to increase this share to 5%. • EU energy security strategy sets a target of 20% substitution of mineral fuels with the alternative/renewble ones. • USA anounced aggressive plans for renewables development and conusmption (over 20% over A decade) • Under the pressure of business community, USA Government is adopting the Carbon Credits trading scheme, according to the Kyoto Protocol. • In 2007 Moldova enforced minimum consumption regulations !!! • 6% of volume until 2010 • 20% of volume until 2020

5. Why invest in ethanol? Production technology is mature • Various countries invested over $25 billion since 1974 to develop economic technologies of ethanol production. • The technology reached the state, where – at the current and expected oil prices – it is economically feasible to produce and sell bio-fuels. • The required investment costs decreased dramatically within the past 5 years.

6. Why invest in ethanol? The value of production assets will increase • Operating assets are expected to increase in value, as the demand for bio-fuels will increase correspondingly. • Moreover the valuations of the production sites will be enforced/driven up by different financial derivatives, such as carbon credit tradebale securities. • From this perspective the installed capacity is very important, as it is determining the economies of scale, which are very important for long-term view.

7. Why invest in ethanol? This field of activity makes good/favorable public image for responsible investors • Public opinion is sensible to the investments in green technologies. • Environmental problems/challenges will be the main concerns of the public for the forseable future.

8. Why invest in ethanol? Long term considerations • Currently the prices for bio-fuels are driven by high oil prices. • However in the medium-to-long term, the demand for ethanol will be created/determined by policies. The international community has set a long-term/strategic aim at using only bio-fuels for transportation needs, while the remaining petrol is to be used in the chemical industries. • Emission reduction tradeable securities/schemes will further stimulate investments. • Further technological development will make production cost of ethanol comparable to the extraction and production cost of petrol-based gasoline.

9. ETHANOL BIO-FUEL PROJECT Pre-Tax ROI = min 24%

10. C O N T E N T

11. ETHANOL BIO-FUEL PROJECT Technical parameters of the project

12. ETHANOL BIO-FUEL PROJECT Investment structure

13. ETHANOL BIO-FUEL PROJECT

14. ETHANOL BIO-FUEL PROJECT The economy of ethanol production • Feasiblity factors (in order of magnitude/importance): • [Specific] capital/investment costs; • Raw material prices; • Cost of utilities; • Financing costs (subject to capital/finacing structure).

15. ETHANOL BIO-FUEL PROJECT The economy of ethanol production • Cpital costs efficiency depends on the size/capcity of the plant, i.e. economies of scale are important Investment EUR/liter Installed capacity in million liters peryear

16. ETHANOL BIO-FUEL PROJECT Plant localization factors • Within 50 km from Balti: • Over 350 ha is cultivated with corn every year; • Important storage capacities are available. • The location has all the infrastrture needed (railroad, local and international road access, energy and utilities) • There is long-term experience of working in the corn technology. • The company is located in the very middle of the corn area of the country.

17. ETHANOL BIO-FUEL PROJECT Main risk factors

18. C O N T E N T

19. WHY INVEST IN MOLDOVA? Why invest in Moldova? • Availability of raw material • Corn and wheat are traditional crops for large areas of land (though the productivity is very low). • The market does not have a constant internal consumer. • Good premises for effective corn price risk management • The geography and the existing infrastruture limit the efficient export of corn. • Long-term contracts based on co-financing increase the security of supply.

20. WHY INVEST IN MOLDOVA? Why invest in Moldova? • If one assumes a possible increase in corn prices in Moldova, the same will happen elsewhere. • Many European countries produce ethanol from wheat, which is less efficient.

21. WHY INVEST IN MOLDOVA? Why invest in Moldova? • There is a huge potential (!) of increasing the volume of raw material.

22. C O N T E N T

23. Constellation of Partnership? What has been done so far? • Pre-feasibliity of the project (with the contribution of Delta-T). • Technical feasibility of the project (with Praj Industries, www.praj.net). • Technical and economic feasibility. • Pre-contractual arrangements with Eco-securities (www.ecosecurities.com) for CDM sale. • Legislation in Moldova and technical norms.

24. Constellation of Partnership? Equity Project Management Management Experience Equity Debt Financing Experience we help grow MIN 25% ROI Development Technology Project Management Plant Management Raw Material

25. Dorin Recean, CEO tel/fax. +373 (22) 223-419, 223-487 email: receand@email.com of .207, 45 BanulescuBodoni street MD-2012 Chisinau, Republic of Moldova we help grow