PRESS RELEASE

Singapore, 21^st March 2013

VELCAN ENERGY: ANNUAL RESULTS 2013

SIGNIFICANT GROWTH OF PORTFOLIO OF CONCESSIONS IN DEVELOPMENT (MW), NET RESULT HIT BY EURO APPRECIATION, EBITDA IN STRONG PROGRESS

MAIN FIGURES

During Fiscal Year 2013 Velcan Energy consolidated its existing portfolio and concentrated it on a smaller number of projects with satisfactory probabilities of realization. Significant progress on these key projects has allowed the Group to grow its portfolio of projects in development by 37% to 860 MW. In 2013, broad cost-cutting efforts, in particular the cut in the number of Indonesian projects, allowed an improvement of EBITDA despite a decline in turnover caused by the appreciation of the Euro relative to the Brazilian Real. These efforts should continue to bear fruit in 2014.

In India, the Group continued the development of its hydroelectric concessions in Arunachal Pradesh that were granted in 2007. Its teams are working on land acquisition and on obtaining all necessary administrative clearances. The Group announced important milestones as it successfully submitted the Detailed Project Report (DPR) for Tato-1 (186 MW) and Heo (240 MW). These DPRs were accepted for examination by the Central Electrical Authority (CEA). Velcan Energy aims to obtain the Techno-Economic Clearance (TEC) for Tato-1 and Heo during 2014 or early 2015 depending on the CEA's administrative process. The Group also announced that the public hearings for all three projects in Arunachal Pradesh (Heo, Pauk and Tato-1) were successfully held. These hearings are decisive steps in order to obtain environmental clearances.

In Indonesia, the Group continued to consolidate its portfolio and to work on its projects. It announced in July that it held rights for three projects at various stages of advancement, totaling 128MW. The Group also signed an exclusive agreement with PT PJB, a wholly-owned subsidiary of the national utility PT PLN for the joint development of a 59 MW project, Meureubo 2. However, the weakening of the Indonesian Rupiah led the Group to put on hold a number of projects under 10 MW capacity.

In Laos, the Group, active there since 2010, announced new advances with the validation of the Feasibility studies for both Nam Phouan and Nam Ang Tabeng as well as the granting of the environmental clearance for Nam Phouan. These projects are being developed in partnership with ECI (Electrical Construction and Installation). Furthermore, capacity for Nam Phouan was revised from 25 MW to 52 MW and that of Nam Ang Tabeng from 35 MW to 41 MW. Finally, the Group also revised upwards the probability of success on Nam Ang Tabeng and wrote back the existing provision on development costs on this project which has been in development since 2011.

In Brazil, the Rodeio Bonito Hydropower plant (15 MW) ran without any technical problems. The operating and financial performance of the plant were satisfactory but the weakening of the Brazilian Real and the remedial actions taken by the Brazilian government following the drought of 2012 weighed on the EBITDA when expressed in Euros (EUR 3.1m in 2013 vs EUR 3.5m in 2012). The MME (Ministério de Minas e Energia) decided (« Resolução nº 03 du 06/03/2013 ») that all agents of the electricity market should partake in the incremental cost caused by the utilization of thermal plants. This regulatory change hit Rodeio Bonito's EBITDA (-EUR 0.4m). Turnover amounted to EUR 4.6m, of which EUR 4.4m from electricity sales and EUR 0.2m for sales of carbon credits.

Net Financial Income for the group amounted to EUR -3.5m in 2013, of which EUR +3m of income excluding Foreign Exchange (FX) and derivatives variations. This income compares to  EUR 4.2m in 2012 following, in part, the sale of Indonesian bonds.

The overall impact of FX on the Financial Income is a loss of -EUR 3.7m to which must be added an unrealized loss of EUR 2.3m on derivatives (FX forwards and options), mainly because of the weak USD (-4.5% on the year) and Singapore Dollar (-8.1%). The significant depreciation of Emerging Market currencies in 2013 relative to the Euro (Brazilian Real -20.5%; Indian Rupee -17.6%, Indonesian Rupiah -31.9%) weighed heavily on conversion reserves as the Group's main investments (tangible and intangible) have been done in local currency.

Operating costs are down sharply from 2012 (-31%). The Group continues its cost-cutting policy in order to improve EBITDA in 2014. Costs have continued to come down materially during the first quarter of 2014.

Depreciation and amortization of tangible and intangible assets of Rodeio Bonito plant amounted to EUR 1.2m.

Velcan Energy's balance sheet is very healthy. The Group has no debt has a cash and cash equivalent position of EUR 84m. The asset side includes the capitalized expenses of projects in development (EUR 13.8m) and the Rodeio Bonito Hydropower plant in operations (EUR 18.8m). Excluding foreign exchange variations, Rodeio Bonito's revenues and financial income cover the Group's operating and development expenses.

The number of shares outstanding (net of Treasury shares) amounts to 5,984,908.

After this eighth fiscal year, Velcan Energy has the following objectives:

In the short term, to start building a second hydroelectric plant, most likely in Indonesia or Laos.

In the medium term, to make its Indian concession (571 MW) completely economically viable.

During the studies and development phase prior to construction, Group equity is invested in short and medium term instruments, mainly in fixed income, money markets and bank balances as well as equities. These investments are in Euros, US Dollars, Singaporean Dollars and Indonesian Rupiah.

The Board of Directors does not recommend that the company pay a dividend for Fiscal Year 2013.

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Investor Relations Contact                 investor@velcanenergy.com
Nicolas Konialidis                                konialidis@velcanenergy.com

FINANCIAL RESULTS

Summary Balance Sheet as of 31/12/2013 (EUR '000)

Summary income statement for Fiscal Year ending 31 Dec 2013 (EUR '000)

Cash Flow statement for Fiscal Year ending 31 Dec 2013 (EUR '000)

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About Velcan Energy:

Velcan Energy (ALVEL FP) develops and operates hydro power concessions in emerging markets. The Company's strategy is to become a market leader in up to 200 MW hydro power concessions in India, Brazil, Laos and Indonesia.

Hydro power is attractive and can be an important contributor to the economic development of these countries: 

• Chronic electricity shortages are an impediment to social and economic development. For instance, an estimated 650 million people do not have regular access to electricity in India.
• Under-capacity has led both the Indian and Brazilian national governments to liberalize their national electricity market to allow increased private and foreign competition.
• Laos has a strategic position in South-East Asia and can export electricity to growing countries such as Thailand, Vietnam, Cambodia and China. Indonesia is one of the largest emerging economies in the world with stable economic growth rates and good conditions for hydro power.
• Velcan Energy is active in countries with huge untapped hydroelectric potential; 84,000 MW in India, 180,000 MW in Brazil, 75 000 MW in Indonesia and 26,000 MW in Laos.

As of March 2014, Velcan Energy:

• finished building and has put into operation its first hydroelectric concession in Brazil (15 MW),
• owns rights related to hydroelectric concessions projects amounting to over 860 MW in India, Brazil, Indonesia and Laos,
• has two pre-concessions in the Lao PDR for a total of 93 MW,
• Develops, through a consortium with a subsidiary of PLN and a local partner, a 59 MW hydroelectric project in Indonesia.

Velcan Energy's technical team is composed of industry veterans. Velcan Energy is headquartered in Paris and employs over 50 people in its administrative offices (New Delhi, Singapore, Vientiane, Jakarta and Saõ Paulo) and its concession sites.

Velcan Energy is listed on the Paris Stock Market (Euronext Alternext ALVEL-FR0010245803). The Company never performed any Public Offer as under the meaning of Articles L 411-2, II-4° and D 411-1 of the French monetary and Financial code.

This press release contains prospective information about the potential of the projects in progress and/or of the projects of which the development has begun. This information constitutes objectives attached to projects and shall not be construed as direct or indirect net income forecast of the concerned year. Reader's attention is also drawn on the fact that the performance of these objectives depends on future circumstances and that it could be affected and/or delayed by risks, known or unknown, uncertainties, and various factors of any nature, notably related to economic, commercial or regulatory conjuncture, which occurrence could be likely to have a negative impact on future activity and performances of the Group.

This announcement does not constitute a public offering ("offre au public") nor an invitation to the public or to any qualified investor in connection with any offering. This announcement is not an offer of securities in the United States of America or in any other jurisdiction/country.