European Energy Financial Overview

Risk Factors == EUROPEAN ENERGY Investing in the Bonds involves certain risks. Prospective investors should carefully consider the risks described below, as well as the other information contained in this Prospectus, before making an investment decision. Any of the risks described below could have a material adverse impact on our business, prospects, result of operations, cash flows and/or financial condition and could therefore have a negative effect on the trading price of the Bonds and the Issuer's ability to pay all or part of the interest, principal and other amounts on the Bonds. Investment in the Bonds involves a high degree of risk and holders of the Bonds (the "Bondholders") may lose all or part of their original investment. The Issuer believes that the factors described below represent the principal risks inherent in the Issuer's business and in investing in the Bonds and which could have a negative effect on the Issuer's ability to satisfy its payment obligations under the Bonds. The Issuer does not represent that the risks described below are the only risks facing the Issuer and the Issuer's Group. Additional risk factors not presently known, or that are currently deemed immaterial, may also render the Issuer unable to pay interest, principal or other amounts on or in connection with the Bonds. In addition, our past performance and historical trends should not be used to anticipate results or trends in future periods. The risk factors described below are not listed in any order of priority with regard to their significance or probability. Risks related to the Issuer Operational Risks The Group's business depends on the successful development of new renewable energy projects, which may be impaired due to changes of the market conditions or in the regulatory framework The Group's result and business depend amongst other factors on the successful development of new wind and solar energy projects. A number of risks are associated with the development of such projects. The successful development of renewable energy projects depends to a large extent on the regulatory framework. This concerns both the applicable feed-in tariff schemes as well as the permissibility of the projects with regard to competing public interests (such as environmental protection, noise emission controls, aviation or military use of land and airspace). Given the comparably long development periods, renewable energy projects are particularly vulnerable to changes in this regulatory framework. Additionally, in most of the Group's key markets, there are a multitude of public and private stakeholders involved in the process of approving a given project who may delay or stall the successful development of new projects (such as municipalities, governmental authorities or local residents). The development of new projects may also be subject to complaints or law suits - e.g. regarding necessary approvals or permits - which may delay the construction of a project or even lead to its cancellation. Together with the vulnerability to changes in the regulatory framework, these factors increase the risk that the Group finds itself unable to finalize the development of new projects and to expand its business. The Group may also lose funds invested in the development of unsuccessful projects. Successful project development requires the availability of suitable sites for the projects, which satisfy a number of criteria (such as favourable wind or irradiation conditions, availability of grid connection possibilities and capacity or favourable regulatory prospects for renewable energy projects). In parallel with the expansion of renewable energy in some of the Group's key markets (such as Denmark and Germany), such sites are becoming more difficult to find and more expensive to acquire or to secure. This can adversely affect the Group's ability to successfully develop projects and expand its business. In order to explore business opportunities in different markets, the Group is currently developing renewable energy projects in many different countries. This include European countries, but also countries outside Europe. Consequently, the Group is continuously assessing the possibility of entering into new markets. When entering into new markets, the Group can to a lesser degree than when operating in core market countries rely on relevant in-house experience, and will have to rely on external advisors (legal, technical, etc.). By consequence, the information and knowhow necessary for the successful development of such projects may not be available within reasonable time frames or at reasonable costs. This can adversely affect the Group's ability to successfully develop projects and expand its business. Some renewable energy markets experience significant peaks of project development activities due to regulatory deadlines for attractive feed-in tariff schemes. These peaks stress the availability and costs of crucial resources for project development (such as grid connection and capacity, construction companies or technical advisors). The increase in costs for such resources may impair the profitable development of projects. At the same time, the external deadlines causing peaks in activities also lead to peaks in the Group's internal work load. There is a risk that the necessary human resources cannot be available in due time. This may prevent the successful and timely development of new projects. Further, there is a trend towards a decrease in subsidy levels due to successful implementation of competitive auction-processes. This could within a short- or mid-term period of time (at least within Europe) lead to regimes with none or significantly reduced subsidies for renewable energy projects. The consequence hereof could be that the profitability per MW of the Issuer's projects will be reduced, whereby the Issuer will have to rely on an increased volume of projects to ensure continuous profitability on the overall portfolio. The Group has developed a large-scale energy storage project (EE GigaStorage). Further development of this project will most likely imply further investments by the Group. Whether such development costs will be recouped by third-party investments, a third-party purchase of a license to use the technology etc., is uncertain, and could therefore lead to a risk of loss of development costs. | 39

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