More VERBUND Hydropower in Germany, Value Realisation from Business Commitment in Turkey

As part of the transaction, VERBUND will sell its 50% interest in Enerjisa Enerji A.S. to E.ON and, in return, will acquire E.ON’s interest in eight run-of-river power plants in Germany with average pro rata annual generation of over 2 TWh. Prior to the transaction, VERBUND has already held interests in the acquired run-of-river power plants as well as electricity purchase rights. Once the transaction is completed, VERBUND will own 100% of these power plants. In detail, VERBUND will acquire the following assets:

• the sections of the Ering, Egglfing and Nußdorf hydropower plants located in Germany with a pro rata generation of 592 GWh
• the 50% share in the Österreich-Bayerische Kraftwerke AG ("ÖBK") with a pro rata generation of 994 GWh
• the 50% share in Donaukraftwerk Jochenstein AG ("DKJ") with a pro rata generation of 425 GWh
• the 50% share in Grenzkraftwerke GmbH ("GKW"), which operates the ÖBK and DKJ power plants

As a part of the transaction, VERBUND will also repurchase 20.3% of the capacity of the Zemm-Ziller power plant group (237 GWh). This is equivalent to 60% of the electricity purchase rights of 33.8% agreed with E.ON in 2009. In addition, VERBUND will purchase the 50% interests from E.ON of the existing hydropower plant projects Freilassing basin (approx. 18 MW), Tittmoning basin (approx. 18 MW) and Riedl energy storage plant (300 MW).

The closing of the transaction is planned for quarter 1/2013 and is subject to regulatory approval including authorization under anti-trust law.

With this transaction, VERBUND reinforces its position in Germany, its most important international market, and in its core technology hydropower generation.

In addition, VERBUND improves its risk profile as well as the structure of its balance sheet, and increases its strategic flexibility given the ongoing challenging backdrop to both the energy sector and the overall economy. By selling its interest in the joint venture Enerjisa, VERBUND will realize a significant appreciation in the value of its investment in Turkey. By purchasing additional hydropower capacity, VERBUND is acquiring renewable electricity generation owned 100% by VERBUND which will generate immediate cash returns.

This transaction underscores VERBUND’s strategy of expanding its position as a leading renewable electricity company in Europe. The focus for future investments will also be on VERBUND’s core markets of Austria and Germany. In contrast, Italy and France are no longer considered to be strategic growth markets. South-Eastern Europe offers interesting potential for future growth opportunities in the medium term.