Attachment To the RoA PSRC Resolution No.

207 Dated May 4, 2007

METHODOLOGIES ON CALCULATION OF TARIFFS FOR SALE OF ELECTRICITY DELIVERED FROM POWER PLANTS OPERATING ON RENEWABLE ENERGY RESOURCES WITHIN THE TERRITORY OF THE REPUBLIC OF ARMENIA 1. According to these Methodologies the tariffs for sale of electric energy delivered from the following types of power plants operating on renewable energy resources ( hereinafter, refer to as the Plants) within the territory of the Republic of Armenia: a) Small hydro power plants of up to 10 MW installed capacity constructed on natural flows, which do not use completely, partially or on a joint use basis the hydro facilities possessed by other entities, and received the power generation license from the RoA Public Services Regulatory Commission (hereinafter, refer to as the Commission) after February 9, 2004. b) Small hydro power plants of up to 10 MW installed capacity constructed on irrigation systems, in which the water intake is implemented from the irrigation systems, and which redceived the power generation license from the Commission after November 8, 2005. c) Small HPPs of up to 10 MW installed capacity constructed on a drinking water pipeline, in which the water intake is implemented from the drinking water pipelines and which received the power generation license from the Commission after November 8, 2005, except for those Small HPPs constructed on drinking water pipelines that received the power generation license before November 8, 2005. d) Wind power plants that received the power generation license from the Commission after February 9, 2004. e) Power plants operating on biomass that received the power generation license from the Commission after September 9, 2003. 2. Pursuant to these Methodologies, the tariffs shall be calculated throughout the period of 15 years after the effective date of the power generation license issued by the

Commission. 3. The tariffs for 2008 and the following years for sale of electricity to be delivered from the Plants shall be set and revised according to the following formula:

T = T1 k1

ER1 PI + k2 + (1 k1 k 2 ) 100 ER2

in which,

T T1 k1

the value of the set tariff (AMD/kWh) the value of the currently effective tariff ( AMD/kWh) the portion of the currently effective tariff that is subject to adjustment to the rate of inflation and is accepted equal to 0, 25

PI

the index of consumer prices for the period of January-September of the current year towards the same period of the previous year

k2

the portion of the current tariff that is subject to adjustment to the USD by changing the average monthly exchange rate of the RoA AMD and is accepted equal to 0,35

ER1

the average arithmetic value of average monthly exchange rates of AMD towards USD during the period of January-September of the current year

ER1

the average arithmetic value of average monthly exchange rates of AMD towards USD during the period of January-September of the previous year

4.

Tariff revision shall be carried out each year before December 1 of the current year. Tariffs set as a result of revision shall become effective from January 1 of the year following the current year. If the 6-month period of effectiveness of tariffs for electricity delivered from the Plants is not expired yet, the tariffs set as a result of revision shall become effective after the expiration of the 6-month period of the tariff effectiveness.

5.

If the Resolution of the Commission on setting tariffs for sale of electricity delivered

from the Plants of the entities that submitted power generation license applications becomes effective before December 1 of the current year, then the value of the tariff to be set shall be assumed equal to the value of the tariff currently effective for such types of the Plants. If the Resolution of the Commission on setting tariffs for sale of electricity delivered from the Plants of the entities that submitted power generation license applications becomes effective in December of the current year, then the value of the tariff to be set shall be assumed equal to the value of the tariff effective for such Plants from January 1 of the year following the current year. 6. The current tariffs for sale of electricity delivered from the Plants shall be revised and become effective from January 1, 2008. The tariffs effective as of the moment of setting tariffs for sale of electricity delivered from the Plants during 2008 (T1) shall be assumed equal to the values of tariffs set according to point 2 of this Resolution.