VELCAN ENERGY : ANNUAL RESULTS 2011

Press Release

Paris, April 23^rd, 2012

ANNUAL RESULTS 2011 : SIGNIFICANT LOSS DUE TO BRAZILIAN OPERATIONS
AND REAL'S LOSS OF VALUE, PRESERVATION OF CASH

MAIN DATA

2011 was a halftone year for Velcan Energy.

In Brazil the company continued to operate the Rodeio Bonito concesssion (15 MW). The plant's financial performance was satisfactory. The plant suffered from technical problems that now seem to be under control. However the company did not experience significant improvement in the procedures of its projects under development in Brazil. Given the length observed in these procedures, the Company re-evaluated these projects and decided to provision them very significantly. The impact on 2011 accounts amounts to 4.5 million Euros.

In India the group continued to develop its 500 MW concession in Arunachal Pradesh. Given this asset's size, which will produce the equivalent of 3 million people power consumption in India, the administrative procedures & technical studies are necessarily long and complex, and should continue at least until 2013.

In Lao PDR the group obtained a second exclusive pre-concession called Nam Ang Thabeng. The group is also pursuing the development of Nam Phouan, its first Laotian project. Following initial feasibility studies, preliminary discussions have been initiated with Electricité du Laos about the project's electricity sales contract.

Group's financial products were significantly lower than in 2010 due to forex losses. The Group sold its Brazilian sovereign bonds in September 2011 in order to reduce exposure to the Brazilian Real. These bonds were yielding a rate of 10%. Financial products at constant exchange rates were stable compared to 2010 (around 7.1 million Euros). It has not been possible, since then, to find such returns for the Group's treasury. As a consequence, the Group's financial products at constant exchange rates should decrease in 2012. In order to improve financial products, the Group began to invest a portion of its cash into riskier investments (stocks, corporate bonds...).

Throughout the year, the Group suffered a net foreign exchange loss of around 3.3 million Euros.

Full-year operation of Rodeio Bonito dam contributed to the improvement of the group ebitda, increased from -1.2 million Euros to -0.1 million Euros.

Net income was significantly impacted by the Brazilian project portfolio depreciation, foreign exchange loss and lower interest income. It falls down from a profit of 9 million Euros to a loss of 3.1 million Euros.

The Group is still actively prospecting new countries and always targets a portfolio of 1000 MW exclusive hydroelectric concessions within a few years.

In view of the losses, the Board of Directors does not propose the shareholders to pay a dividend for the year 2011.

Financial Results

Summary Balance Sheet as of 31/12/2011 (in k€)

ASSETS	2011	2010
NON CURRENT ASSETS	40.581	47.449
CURRENT ASSETS	99.476	102.137
o/w cash & cash equivalents	97.066	98.139
TOTAL ASSETS	140.056	149.586

LIABILITIES	2011	2010
Equity, group share	132.702	138.940
Minority interests	(235)	(290)
TOTAL EQUITY	132.467	138.651
Provisions	1.896	2.804
Financial debts	1.119	1.424
Other liabilities	4.574	6.707
TOTAL LIABILITIES	140.056	149.586

Summary income statement (in k€)	2011	2010
Revenues	5.390	3.720
Amortization & provisions	(6.440)	(2.322)
Current operating income	(6.528)	(3.519)
Income from operating activities	(7.334)	(1.674)
Financial income (loss)	3.831	11.021
Income tax	401	(369)
Share in net income of associates	-	-
Minority interests	42	(116)
Net result, group share	(3.144)	9.093
EBITDA	(88)	(1.197)

Cash Flow statement (in k€)	2011	2010
Gross Cash Flow before financial interests and income tax	730	(740)
Income tax	(639)	234
Change in operating working capital	(163)	(950)
CASH FLOW FROM OPERATING ACTIVITIES	(72)	(1.457)
Change in consolidation scope	(187)	(1)
Net tangible and intangible investments	(5.293)	(4.736)
Disposals and other investment flows	401	6.284
CASH FLOW FROM INVESTMENTS ACTIVITIES	(5.079)	2.087
Dividend paid and capital increase	(594)	83
Balance in reimbursement of debt / new debt	-	-
Net financial interests	3.832	13.314
Capital Increase	-	-
Other cash flows		(2.292)
CASH FLOW FROM FINANCIAL ACTIVITIES	3.238	11.105
Impact of currency, accounting practices and other	855	540
OPENING CASH & CASH EQUIVALENT	98.124	85.864
TOTAL CASH FLOWS FOR THE PERIOD	(1.058)	12.276
CLOSING CASH & CASH EQUIVALENT	97.066	98.139

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Summary Information on Velcan Energy

• Velcan Energy 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 among others India, Brazil and Laos. Conditions are favourable for this type of plants because:

• These countries suffer from serious under capacity in electricity production, particularly India where an estimated 650 million people do not have regular access to electricity.

• Under capacity has led to both Indian and Brazilian national governments liberalizing the state controlled electricity market and allowing increased private and foreign competition.

• Laos has a strategic position in South-East Asia, and can export to high power-demand growing countries such as Thailand, Vietnam, Cambodia and China.

• These countries have huge untapped hydroelectric potential; India with an estimated 100,000 MW, Brazil with an estimated 190,000 MW and Laos with an estimated 28,000 MW.

• In April 2012, 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 600 MW in India, Brazil and Laos (Group share),

• has an agreement with the Lao PDR Government to co-develop 300 MW,

• is actively prospecting in new emerging markets.

• Velcan Energy's technical team is composed of industry veterans and is one of the most experienced in the world in the construction and operation of hydroelectric and thermal power plants.

• Velcan Energy is headquartered in Paris, and employs over 50 people divided between its administrative offices (Bangalore, Paris and Saõ Paulo) and concession sites.

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. These information constitute objectives attached to projects and shall, in any case, 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.