OFFERING MEMORANDUM Global Offering of up to ... - Nordex

Nordex AG believes that generating energy using wind power will become an important alternative to
generating electricity using fossil fuels. The Company attributes this to a number of factors: the fact
that generating electricity using wind power will receive long-term state support because of political
pressure; the fact that prices for fossil fuels will rise due to their increasing scarcity; and the fact that
lower prices for wind turbines will cause the costs of generating electricity using wind power to
continue to fall. In this regard, the Company believes that the performance of turbines will increase,
and wind farms with as many as 20 turbines will be able to contribute significantly to electricity supply.
Even today, a Nordex N-80 wind turbine in a location with excellent wind conditions (e.g. coastal
regions in Denmark or the UK) can generate up to 8.5 million kWh per year, while at an equivalent
location in Germany a similar turbine can generate approximately 6.5 million kWh per year. These
figures correspond to the average consumption of approximately 1,600 and 1,200 households
respectively, or approximately 6,500 to approximately 8,500 tonnes of CO 2 emissions if the same
quantity of electricity were to be generated by burning coal. (Source: German Wind Energy Association
– 25 Facts)
Regulatory Background
Opportunities for the sale of wind turbines produced by the Nordex Group also depend to a significant
extent on the relevant legal framework for erecting and operating these facilities in Germany and many
other countries. For example, legal requirements may restrict the erection and operation of turbines. In
Germany in particular, legal construction and noise emission requirements must be complied with,
which can mean actual or legal restrictions on erecting or operating wind turbines in certain locations.
On the other hand, certain legal incentives (those provided for by the EU in Germany, for example)
could lead to an increased demand for wind turbines. The regulatory framework created by the EU in
Germany, for instance, led to a substantial increase in the sale of new wind turbines in 2000.
Regulatory Framework for Supplying Electricity into Networks and Promoting Renewable Energy
Renewable energy is promoted in line with relevant national laws. Support ranges from regulations on
supplying electricity to the network which prescribe fixed prices for electricity generated by renewable
energy sources (e.g. Germany and Spain), tax credits (e.g. US) through to green certificate systems (e.g.
Denmark).
Promotion in Germany
In Germany, the Act on Granting Priority to Renewable Energies (EEG) dated March 29, 2000, which
superseded the Stromeinspeisungsgesetz (German Act on Supplying Electricity from Renewable
Energies into the Public Grid) dated December 7, 1990 with effect from April 1, 2000, is of key
importance to the construction of facilities for the generation of renewable energy. According to
Section 1 of the EEG, the Act aims to protect the climate and the environment by enabling the growth
of long-term energy supply and to substantially increase the contribution of electricity supply
generated by renewable energy. The European Court of Justice has in a judgment of March 13, 2001,
held that the German Act on Supplying Electricity from Renewable Energies into the Public Grid is not
contrary to European Law. The Company therefore believes that it is not likely that the EEG, which
supersedes that Act is contrary to European Law. The Act regulates the supply of and payment for
electricity generated from wind energy and other sources (Section 2 of the EEG). In the case of such
supply, the Act requires grid operators, i.e. electricity suppliers that operate grids for general supply, to
connect plants that generate electricity from renewable energy sources to the grid. These suppliers
must purchase electricity and pay the legally stipulated amount as prescribed by Sections 4 to 8 of the
EEG. Section 7 of the EEG applies to electricity from wind energy. The Section prescribes a payment of
DM 0.178 (approximately EUR 0.09) per kWh for a period of five years from the date the plant
commences operations. Once this period has expired, the payment requirement becomes subject to
other regulations, but continues in effect. The minimum payment prescribed by Section 7 (1) of the EEG
is reduced by 1.5% each year, starting on January 1, 2002, and applies to all plants that commence
operations after such date. A specific regulation is in place for plants located at least three nautical
miles from the coast and which are due to continue in operation up to and including December 31,
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