Vallibel Power Erathna PLC

It is with great pleasure that Country Energy (Pvt) Ltd wish to inform our shareholders that we were able to register under United Nations Framework Convention on Climate Change (UNFCCC). Our consultant, First Asia Carbon Lanka (Pvt) Ltd of Singapore tediously followed up the process and they were able to complete the registration process by 06th December 2013. (Webpage link of CDM registration http://cdm.unfccc.int/Projects/DB/DNV-CUK1380025557.94/view).

We wish to inform the stakeholders of the company that, we are now qualified for Carbon Credit facility, with respect to the electricity generation of the Kiriwaneliya MHP.

Clean Development Mechanism (CDM), as defined in Article 12 of the Kyoto Protocol, allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol to implement an emission-reduction project in developing countries. Such projects can earn salable certified emission reduction (CER) credits, each equivalent to one tone of CO2, which can be counted towards meeting Kyoto targets. The aim of introducing CDM is to stimulate sustainable development and emission reductions, while giving nations some flexibility to meet their emission reduction or limitation targets. An industrialized country that wishes to get credits from a CDM project must obtain the consent of the developing country hosting the project, ensuring that it contributes to sustainable development.

The expected amount of annual reduction is equivalent to 10,636 tons of CO2 as Certified Emission Reduction (CER) by the project. From this point it is the formality that project has to pass three more milestones in the CDM project cycle, namely Verification, Issuance and Sales to complete the process.

Apart from the expected revenue, UNFCCC registration is a yet another achievement by Kiriwaneliya Project which would enhance the confidence of our share holders to invest in our future projects of the Company