Dear Sir, Referring our meeting at your office on 23rd Dec’13, following is summary about Al Ghail Power,    In 2005

,FEWA agreed to provide power to industries at Al Ghail and al Hamra industrial park . Based on that , RAKIA started promoting the industries in 2005. RAKIA investors constructed industries. However, FEWA delayed and later declined from responsibility to provide the power. In that scenario the investors put up pressure on RAKIA to find a solution. Some of them asked for compensation for difference in cost of power if they are forced to operate on electricity from Diesel generating set.   With this background, RAKIA decided to install two power plants , one at Al Ghail and another at Al Hamra , with help of gas supply from RAK Gas. Al Hamra Plant was commissioned in March 2009 and Al Ghail plant was commissioned in Sept 2009. Both plants were operating independently without any connection between them.   When Al Ghail plant was installed, Seventy customers with 60MW connected load committed to RAKIA and deposited the connection fee. When Al Ghail Plant commissioned, due to economic recession those industries didn’t took off. Only 20% customers were ready to take power which was also not at full capacity. This resulted in Al Ghail Power to operate with 3% of its capacity, which was neither technically viable due to low efficiency nor

commercially profitable. However, RAKIA management instructed and decided to operate the plant to fulfill its commitment to clients whoever have started operation.   Whereas at Al Hamra, the plant was operating near full capacity and was unable to fulfill growing electricity demand at Al Hamra. As per instruction and discussion of HH with FEWA, efforts made to use FEWA network to transmit power from Al Ghail to Al Hamra. Two substation 33/11kV were set up at Al Hamra and Al Ghail as per FEWA standard to dispatch and

RAKIA instructed to AGPL to charge the additional gas cost to clients in addition to normal tariff of Gas. We are in process to connect the Marjan island  by putting up 33/11kV substation. which was costing more and not budged by AGPL. o Al Ghail Plant : 65MW o Al Hamra plant : ISO installed capacity is 45MW and available capacity 35MW o Over head transmission line : capacity 30 MW. o Al Ghail plant has capacity to generate additional 30MW by utilizing waste heat.4 million Dhs are due from those customers. HH and RAKIA decided to construct our own Over head transmission line to link Al Ghail with Al Hamra. Total 9.receive the power at plants. we could operate both plants efficiently to optimize cost of generation and could turn EBITA profitable. Accordingly. Construction activities has started and will complete by Oct’14. Thirty four customers out of 246 are not settling the additional gas cost surcharge and approaching to RAKIA to resolve the issue. Future plan.  Since then. RAK Gas is taking gas from Dolphin @12$/mmBtu. completed in Oct’2012. This requires only capital expenditure and no additional fuel cost. As of now ISO installed capacity is 85MW and available capacity installation of overhead line Nineteen new power connection application are with us and are in different stages of power connection. We provide it on first come first serve basis  One of our major customer in future is Marjan Island. RAK Gas started facing gas supply problems.  This created dissatisfaction among RAKIA clients.  Finally. It . Our clients base is 246 numbers now and plant load factor improved to 60% in summer and 50% in winter.  However. To top-up shortfall in supply. when load increased. o Surplus capacity at Al Ghail Plant : 20MW  The surplus 20MW capacity is available to meet future demand.  Power capacity at a glance. we could not make deal with FEWA. Despite our serious efforts and perusal for three years.

And in such scenario we can give commitment to match FEWA price.takes two years from finalizing the contract. . If that happen. we cannot give any commitment on fuel surcharge as we don’t know how much it will be in future. cost of power generation will come down by 20 to 30%. However.