Europe and South America

The European and South American markets are managed by Suzlon Energy A.S. Denmark (“SEAS”), a
subsidiary of Suzlon Denmark. The following markets are of particular strategic focus: Portugal, Spain,
Italy,
Greece and Brazil as they constitute growth markets. Suzlon has established marketing and project offices
as
Subsidiaries of SWEAS in the above-mentioned countries. REpower won a bid for a government tender in
Portugal to provide a wind energy project with a projected capacity of 400 MW. The Group provides
technical
services relating to the installation, EPC and O&M of WTGs.
China
The Group has a representative office in Beijing and a manufacturing unit in Tianjin. In 2009, China was
the
largest wind energy market in the world in terms of installed wind power capacity (Source: BTM Report
2010).
The Chinese government is encouraging the development of renewable energy sources and has declared its
intention to generate 15% of its electricity from renewable energy sources by 2020, accompanied with a
fixed
feed-in tariff system and full purchase obligations for grid companies. As the energy market in China is
currently dominated by state-owned utilities, the Group expects that these state-owned utilities and their
Subsidiaries will be its primary customers.
Australia and New Zealand
Marketing activities in Australia and New Zealand are conducted by Suzlon Energy Australia Pty. Ltd., a
subsidiary of Suzlon Denmark. The Group believes that both Australia and New Zealand have the natural
resources necessary to potentially generate substantial amounts of renewable energy. The Group may also
offer
customers assistance in obtaining project finance and provide technical services relating to the installation,
EPC
and O&M of WTGs.
Customers
The Group has four principal types of customers in India: (i) companies that have manufacturing units with
high
power consumption; (ii) companies with high profitability and/or surplus liquidity that seek investment
opportunities with stable returns and tax benefits; (iii) power utilities and public sector entities; and (iv)
companies selling “Carbon Emission Receipts”. The Group’s target international customers include: (i)
companies interested in investing in renewable energy sources; (ii) utilities; (iii) wind energy project
developers; and (iv) municipalities, schools and cooperatives in the United States interested in establishing
captive power facilities.
Since December 31, 2009, major sales orders for the Group include:
A contract in March 2010 between Suzlon and Gujarat State Petronet Ltd. to supply 35 wind turbines (each
with
a rated power of 1.5 MW).
A contract in April 2010 between REpower and Al Yel Elektrik to supply 44 MW wind turbines (each with
a
rated power of 3.37 MW).
A contract in February 2010 between REpower and Akuo Energy SAS to supply 51 wind turbines (each
with a
rated power of 2.05 MW).
A contract in February 2010 between REpower and EOLE-RES S.A. to supply 26 wind turbines (each with
a
rated power of 2.00 MW).
86
A contract in February 2010 between REpower and RWE Innorgy to supply 48 wind turbines (each with a
rated
power of 6.15 MW).
The Group’s agreements with customers generally operate in phases with additional payment advances for
each
stage. Additionally, the agreements provide for liquidated damages to be paid to customers if the project is
not
completed on schedule.
REpower has a limited number of customers, which typically include utilities and power companies. It has
long
term relationships in place with most of its major customers.Purchase agreements with customers typically
include the provision of WTGs over a number of years.Framework agreements entered into with customers
commit them to accept a certain number of WTGs within certain timeframes. Under framework
agreements,
REpower commits to providing such WTGs predominantly at agreed prices. Details for specific projects
and the
required WTG specifications must then be notified to REpower within time periods specified in the
framework
agreement. Only notified projects are included in REpower’s order book and not the capacity included in
the
framework agreements.
Quality Management Certification
Pursuant to the Group’s internal policies, all of the design and manufacturing facilities of the Group and
each of
its O&M services have either been certified as ISO 9001:2008 by Det Norske Veritas (“DNV”) or are in the
process of being so certified. DNV is one of the world’s leading certification bodies. It is an independent
foundation with the purpose of safeguarding life, property and the environment. WTG model type
certifications
are permitted from five agencies (including DNV), pursuant to the revised guidelines for wind power
projects
issued by MNRE.
Product Certification
The Group’s WTGs are also designed to meet the standards set by independent international agencies such
as
Germanischer Lloyd (“GL”) or the DNV. Once the Group has completed a WTG design, the design is
usually
presented for type approval and certification in accordance with the Certification of Wind Energy
Conversion
Systems laid down by GL. The Group has also obtained WTG type certification from internationally
accredited
agencies such as GL, DNV and agencies such as the C-WET. The C-WET is an autonomous body and the
major
specialized technical institution to the MNRE. See the section titled “Regulations and Policies” of this
Letter of
Offer. C-WET was associated with the Risø National Laboratory, another internationally-recognized WTG
certification agency.
The rotor blades also undergo extensive static and fatigue tests conducted by blade testing centres.
Typically, the
type approval and certification process would take anywhere between nine to fifteen months. The Group
has
established a rotor blade testing centre in Vadodara.
During the course of the type certification process, WTG design, prototype performance and systems are
independently assessed and verified, which assists in providing assurance to customers regarding the
design,
performance and safety of the Group’s WTGs. Furthermore, banks and other financial institutions often
require
type certification for the WTGs that the Group’s customers propose to acquire to provide financing to its
customers for their purchases. In quite a few cases, however, the Group is allowed to sell its WTGs on a
“selfcertification”
basis.
Logistics
The dimensions and weight of WTG assemblies are such that their delivery can be expensive and a
considerable
logistical challenge, particularly in the case of the 5.00 MW and 6.00 MW WTGs, which are implemented
by
REpower and require assembly on-site. These challenges, particularly in terms of transport vehicles and the
condition of transport routes, can create considerable problems, particularly in regions with less developed
infrastructure. The Group depends on various forms of transport such as air, sea-borne freight, rail and
road, to
receive raw materials and components used in the production of WTGs and to deliver its products from its
manufacturing facilities to its customers.As the Group expands its operations, its logistical challenges will
increase particularly in relation to the shipping of WTGs and its components. As a result, the Group
conducts
site suitability studies not only in ter