1,000 MW BPA with Suzlon and Roll-out Schedule

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Caparo Energy Limited

("CaparoEnergy")

Caparo Energy announces 1,000 MW BPA with Suzlon and agrees to a roll-out schedule 

The directors of Caparo Energy (the "Board"), the wind power development company, are pleased to announce that Caparo Energy (India) Limited (the "Company"), its 100% owned subsidiary, has issued orders and made advance payments to Suzlon Energy Limited ("Suzlon") (together with the Company, the "Parties") and agreed a delivery schedule in respect of 1,000 MW (the "Orders") of wind power projects to be set up in India. A cumulative 500 MW is to be commissioned progressively by March 2012 and a further 500 MW is to be commissioned progressively by March 2013. The total value of the 1,000 MW, based on the mix of the projects, turbine model, inflation and certain other indices, is estimated to be Rs. 5,700 crore (US$ 1.24 billion). The initial projects, totalling 100.8 MW, are to be located at sites in Rajasthan, Gujarat and Maharashtra in India and are scheduled for delivery by Q4 2011. The Parties have also agreed certain changes to the previously announced business partnership agreement ("BPA") entered into between the Parties.

As a result of placing the Orders, advance payments of Rs.226 crore (US$ 49.1 million) have been made to Suzlon and the Company has agreed to make a subsequent advance payment of Rs.120 crore (US$ 26.1 million) to Suzlon in July 2011. Thereafter, further payments will be made on an ongoing basis throughout the agreed roll out period.

Under the revised terms of the BPA, the Parties have agreed, inter alia, to:;

·; bring forward the required delivery timeframes for the first 1,000 MW specified by the BPA by nine months and to reduce the amount of commitment advances payable to Suzlon ;

·; increase in the price payable to Suzlon across all the various models of turbines, in order to reflect increase in the cost of wind power assets in India. However, the total value of the project may vary based on the final selection of the sites and turbine model mix; and

·; remove the Company's general rights of first refusal and certain non-delivery penalties in return for Suzlon providing regular offerings of sites to meet the requirements of the Company as its preferred partner.

In order to limit the reliance on internal cash flow in the short and medium term and to ensure the Company is able to acquire generating capacity in accordance with the accelerated timeframes set out above, Caparo Energy intends to seek additional external financing through the combination of, inter alia, further equity or debt financing and where appropriate, the securitisation of future cash flows and revenues. The Board remains in discussions regarding the provision of additional external financing and looks forward to provide a further update regarding the outcome of those discussions in the near term.

Tulsi R. Tanti, founder, Chairman and Managing Director of Suzlon, said:

"We welcome Caparo Energy to India's wind energy market and are pleased to kick off what I am sure will be a successful long-term partnership. Caparo Energy's ambitious plans underscore the maturity and growing appetite for Independent Power Producers (IPPs) in India's energy matrix and, more importantly, in the renewable energy space.

"This has been a strong year for wind in the Indian power market which, building on strong and transparent policy frameworks, is now a mature and attractive market. With major players like Caparo Energy entering the market, we are also seeing large wind IPPs in India becoming a major force, in addition to the strong captive and small-size IPP segment. We are also witnessing growing interest from overseas investors to deploy funds through the IPP route. At Suzlon, we are leading this growth, and with our strong order pipeline, are confident of strengthening our market leadership."

Ravi Kailas, Caparo Energy's Chief Executive Officer, said:

"We are delighted to be able to announce the issuance of our first purchase orders and are pleased with the amended terms of the BPA, which we feel reflect the progressive and strong relationship we have with Suzlon in India. As a result of the concessions referred to above, Caparo Energy should now benefit from an accelerated delivery schedule and increased transparency in the delivery of the first 1,000 MW of power generation capacity.

"We are committed to becoming a major player in the Indian wind power market and it is key for us that our partner matches our ambition with capability and expertise. With Suzlon, we believe we have the best life-cycle value contribution, allowing us to rapidly build up bankable, profitable wind power projects.

"We look forward to continuing our partnership with Suzlon and anticipate an exciting 2011 for Caparo Energy."

Further information on the Company can be found at www.caparoenergy.com.

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