IFC’s environmental and social due diligence of this Project indicates that while all Performance Standards are applicable to this Project, it will have impacts which must be managed in a manner consistent with the following performance standards: - PS1: Social and Environmental Assessment and Management System; - PS2: Labor and Working Conditions; - PS3: Pollution Prevention and Abatement; - PS4: Community Health Safety and Security; As in case of the existing facility, the land required for the proposed nacelle assembly facility (approx. 85,000 sqm) will be leased or purchased on willing-buyer, willing-seller basis in well established industrial area. Hence PS5: Land Acquisition and Involuntary Resettlement, PS6: Biodiversity Conservation and Sustainable Natural Resource Management; PS7: Indigenous People and PS8: Cultural Heritage; do not apply to this investment.

Environmental and social (E&S) issues associated with this Project are: adequate social and environmental assessment of the impacts of the Project during construction and operations; the Company’s capacity to manage its social, environmental, occupational health and safety performance, and engage with local communities in accordance with local requirements and IFC Performance Standards and EHS Guidelines; assurance of fair, safe and healthy working conditions during construction and operations; management of wastes and emissions from the manufacturing facility as well as construction sites; impacts on community health, safety and security due to transport of wind farm equipment. Potential negative impacts from the Project can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Moreover, Gamesa’s products are used for generating electricity from a renewable resource, and are typically expected to have relatively limited and manageable project-specific impacts given their small physical footprint. Therefore, this is a category B project according to IFC’s Procedure for Environmental and Social Review of Projects.

The Company has presented plans to address the E&S impacts to ensure that the proposed Project will, upon implementation of the specific agreed measures, comply with the environmental and social requirements including: the host country laws and regulations; IFC’s Performance Standards; and the World Bank Group (WBG)/IFC environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the Company is summarized in the paragraphs that follow. PS 1: Social and Environmental Assessment and Management System IFC’s assessment considered the Company’s management of its environmental, health and safety performance in the establishment and operation of its facilities; compliance with national and local permit requirements; and the Company’s engagement with local communities as well as its suppliers, regarding environmental, health and safety performance and corporate social responsibility (CSR). - Environmental & Social Assessment: GWT’s existing facility, located in the specified industrial area, comprises of only a small engineering assembly operation. As such, an EIA study was not required by the local regulators. For the wind farm development operations too, the local regulations do not require a formal EIA study to be carried out. However, as GWT has voluntarily decided to adopt the IFC’s PS requirements for its wind farms development business even though this is outside the scope of the Project, it will conduct appropriate E&S assessment of all its ongoing and future wind farm developments. For this purpose, in line with Gamesa policies and practices, and as a part of its own management program, GWT will develop and implement a formal policy and procedure for conducting E&S assessment study for each of the future wind farm development and shall also conduct the EIA study for its wind farms under development in Gujarath State This study will assess, at minimum, presence of any natural or critical habitat, presence of indigenous people and cultural heritage; impacts on biodiversity (including those due to transportation of wind turbines), cumulative impact assessment; presence and/or the nearest flight corridors for migratory birds; evidence of nearest nesting/ breeding sites; evidence of bird strike from existing wind turbines in the vicinity, if any; and impacts due to noise and shadow flicker on nearby communities among others. The socio-economic analysis will be done to ensure, that the land purchase is carried out strictly in accordance with local regulations, does not involve any tribal land and a fair market price is paid in the transaction. Management Systems: GWT has demonstrated the capacity and the resources allocation, to implement comprehensive EHS and quality management systems in line with Gamesa’s internal corporate standards which are in turn aligned to international standards (ISO) and are consistent with IFC Performance Standards and relevant WBG/IFC guidelines. Gamesa sites in Spain have a multi-site certification for quality, environmental and safety management systems. GWT has had a certified quality management system in place since December 2009 and is currently working towards ISO14001 Environmental Management System (EMS) and OHSAS 18001 Occupational Health and Safety Management Systems covering the existing nacelle assembly facility and the wind farm business, with expected certification by December 2010. Similar integrated management system certification will be put in place for the upcoming new facility in due course. - Organization: At GWT, a full time team of experienced professionals is responsible to oversee all the matters related to EHS and quality for the wind turbine assembly facility as well as the wind farm development operation (including transportation and erection of turbines). This team at GWT closely works with the Business Excellence Unit (BEU) of Gamesa, Spain; which has articulated “A safe, sustainable and reliable Company” as its corporate goal. Monitoring & Reporting: As a part of the management system an elaborate monitoring and reporting program has been put in place by GWT which enables the management to understand the performance of day-to-day operations, but also track the progress towards the annual objectives, targets, and Key Performance Indicators (KPIs). Weekly monitoring of KPIs is carried out and regular reports are submitted to GWT and Gamesa senior management. - Managing Supply Chain: Components required for the turbines are sourced from suppliers accredited by Gamesa across the world. Currently, 80% of the total components are sourced internationally; however, GWT has target to source up to 80% of the components locally in coming years. Gamesa has a comprehensive process for the selection of suppliers; which includes an assessment by the quality and EHS departments on safety, environment and quality aspects. The assessment involves standard checklists, document review, interviews; prototype order; pre-series order to monitor the process prior to awarding to final order. Elaborate inspections and audit process is in place for suppliers, involving presence audits, non-presence audits etc. GWT’s own EMS encompasses the supply chain and accordingly, one of the KPI targets for the current year is to achieve ISO14001 certification in 10% of its suppliers (compared to the current level of 3-4%). - Community Engagement: GWT’s existing facility occupies a small area in an established industrial zone and is primarily surrounded by other industrial units. As such, the needs and opportunities for community engagement are rather limited for the nacelle assembly facility. However, the wind farm development and operation will have close interaction with its neighboring communities at all stages – from land purchase, to transportation/erection and also during operation of turbines. To formalize and enhance the community engagement with the affected communities, GWT will engage in community disclosure and consultation program linked to land acquisition and potential impacts of siting of turbines prior to land acquisition. In addition, a formal and documented grievance mechanism will be developed for the nearby communities to understand and address their concerns related to GWT’s operations, if any. Moreover, through formalized CSR activities the Company plans to engage proactively with the communities in the vicinity of wind farms to build a long term relationships. PS 2: Labor and Working Conditions - Human Resource Policy, Management and Training Currently, GWT has a total workforce of around 200, including 30 in nacelle assembly facility and around 60 in wind farm operations (including 30-40 site personnel). It proposes to recruit a total of 150 employees for the proposed new facility. GWT has articulated HR policies and procedures building upon the Gamesa corporate HR policies and guidelines as well as local regulations. This covers: terms of employment and working conditions including procedures for hiring, probation, training, performance review, promotion, salary and compensation, leave and travel policies, regulatory policies etc., consistent with the national labor laws. Extensive induction training is being provided to all staff. As a part of formal induction program, all the new recruits undergo training on EHS issues. - Occupational Health and Safety The Company combines adherence to the national industrial safety standards as well as the Gamesa corporate standards for workplace health and safety. The Company has instituted very high standards of occupational health and safety at its operational facility in Chennai. As a result, GWT has achieved over 400 accident-free days since the start of operations of nacelle assembly facility, in line with “Zero fatality and disability accidents” as one of the targets in the EMS for the current year. For safe erection and commissioning of turbines, GWT uses a 95-points safety and quality checklist – which groups the check points as critical or minor. In addition, Safe Practices Guidelines and Standard Operating Procedures (SOP) have been developed based on task risk analysis. GWT’s own staff is deputed at each wind turbine location to supervise the safe erection according to the guidelines and SOP. PS3: Pollution Prevention and Abatement GWT’s facility comprises of assembly of turbine components and does not result in any significant air emissions, wastewater discharge or solid/hazardous waste generation. Domestic wastewater and solid waste generated from nacelle assembly facility as well as from the labor camps at the wind farm development sites are managed in accordance with the local regulatory requirements. - Resource Conservation: At the Company facility near Chennai pollution prevention and resource conservation has been an important focus. Accordingly, the buildings are designed to maximize the utilization of natural light and are fitted with energy efficient lighting and less environmental impact air conditioners. Variable frequency drives for fan and similar other measures result in nearly 30% energy savings. Rainwater harvesting and 100% recycling of treated wastewater from the treatment plant are practiced for water conservation. - Carbon Footprint: GWT’s operations require very small quantities of electricity (or diesel for the backup generator sets). As such, the carbon footprint of GWT’s operations is very small (estimated for existing as well as proposed facilities and turbine transportation). On the other hand, the wind turbines produced and installed by Gamesa and GWT will generate renewable energy to the tune of 3066 GWh per year (based on proposed development of 1400 MW with estimated yield of 25% for 365 days of the year.) PS4: Community Health, Safety and Security GWT’s existing facility is located in the industrial zone on the outskirts of Chennai, which is well connected by highway so that the impact of vehicular movement on surrounding communities is expected to be minimal. GWT has completed the risk assessment study for the existing nacelle assembly facility near Chennai and accordingly, Emergency Response Plan document has been finalized and an Emergency Response Team has been constituted. Moreover, GWT is currently conducting a similar risk assessment for its wind farm development operations. - Safety during Transportation and Installation of Wind Turbine For the wind farm development operation, the transportation of wind turbine components such as blades, nacelle and cranes may pose safety hazards for the communities en route. Hence, GWT has developed standard operating procedures and guidelines to minimize the transportation risks and impacts on the communities. Accordingly, GWT uses reputed and specialized logistics company for the transport of wind turbines to the project sites. Moreover, relevant safety related clauses and conditions are included in the contracts for the transportation company. For safe erection and commissioning of turbines, GWT uses a 95-points safety and quality checklist – which groups the check points as critical or minor. In addition, Safe Practices Guidelines and Standard Operating Procedures (SOP) have been developed based on task risk analysis. GWT’s own staff is deputed at each wind turbine location to supervise the safe erection according to the guidelines and SOP. As a result of such efforts, there have been no reportable accidents at any of GWT’s wind farm development sites to date. On the basis of the above information, and by implementing the Environmental and Social Action Plan it is concluded that the Project has been designed and will be operated in compliance with IFC’s PS and relevant EHS guidelines.

As GWT has recently started its operations in India, it is in the early stages of developing its community engagement and CSR program. However, going forwards, as a part of its CSR activities, GWT plans to develop a community engagement program to formalize and further enhance the engagement with the communities. Through such formalized CSR activities the Company will proactively engage with the communities in the vicinity of wind farms to build a long term relationships. This will also help the Company to remain appraised of community concerns related to its operations. In addition, a formal and documented information disclosure and grievance mechanism will be developed for the nearby communities to address their concerns related to Company operations, if any.

The Company will disclose this ESRS and the ESAP at its website, as well as, locally at the following address: Gamesa Wind Turbines # 489, GNT Road, Thandal Kazhani, Vadagarai Post, Red Hills, Chennai India All inquiries and comments may be directed to: Venkatesh Rajaratnam       Head of Finance