Essar Energy Regulatory News (ESSR)

Essar Energy commissions 600MW unit 2 of Salaya I power project

June 15, 2012: Essar Energy plc [LSE: ESSR], the India-focused integrated energy company, today announced that it has commenced commercial operations at the 600 megawatt (MW) unit 2 of its 1,200MW Salaya I power project.

This follows the commencement in April of commercial operations at Salaya I, unit 1, also 600MW, and means the entire project has now been fully commissioned. This takes Essar Energy's total installed operational generation capacity to 2,800MW.

Salaya I, in Gujarat state, is Essar Energy's first coal fired power project and has been built at a total investment cost of US$1.1 billion. Most of the power produced will be sold to the Gujarat state electricity utility, GUVNL, under a long term contract.

Salaya I is one of three power projects due to be commissioned by Essar Energy in 2012, the others being the 1,200MW Mahan I project and the 510MW Vadinar P2 project. Together these three projects will add 2,910MW of capacity and will take Essar Energy's total installed capacity to 4,510MW.

Naresh Nayyar, the chief executive officer of Essar Energy, said: "We are making good progress in completing our construction projects and in our transformation to an operational energy company. The commissioning of the second unit at Salaya is welcome news and represents further evidence of this progress."

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Essar Energy

Mark Lidiard, Director of Investor Relations & Communications +44 20 7408 8714 or +44 7554 440421

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Richard Campbell +44 20 7307 5334 or +44 7775 784 933

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About Essar Energy

Essar Energy (LSE:ESSR) is a world class, low-cost, integrated energy company with an established track record.

Essar Energy, through its subsidiaries, owns one of India's largest private power producers now with 2,800MW of installed capacity and projects under construction to expand its capacity to 9,670MW.

Essar Energy, through its subsidiaries, owns one of India's fastest growing private sector oil and gas companies with a diverse portfolio of exploration and production assets. The Vadinar refinery, located in Gujarat, is India's second largest private sector oil refinery with throughput capacity of 20 million metric tonnes per annum, or 405,000 barrels per day following the completion in 2012 of expansion and optimisation projects.

About Essar Group

The Essar Group is a global conglomerate and a leading player in the sectors of Steel, Energy (Oil & Gas and Power), Infrastructure (Ports, Projects & Concessions) and Services (Shipping, Telecom, Realty and Business Process Outsourcing). With operations in more than 25 countries across five continents, the group employs 75,000 people and has revenues of over US$ 27 billion.

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This announcement contains certain forward-looking statements, including statements regarding Group's plans, objectives and performance. Such statements relate to events and depend on circumstances that may occur in the future and are subject to risks, uncertainties and assumptions. Although the Group believes that the expectations reflected in such forward looking statements are reasonable, there are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements, including, without limitation, the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts or licences; fluctuations in demand and pricing in the Oil and Gas, Power and Energy industries; fluctuations in exchange controls; changes in government policy and taxations; industrial disputes; war and terrorism. Further information on the significant risks and uncertainties associated with the Group's business is set out in the Prospectus published on 4 May 2010. These forward-looking statements speak only as at the date of this document. The Group undertakes no obligation to update any forward looking statements whether as a result of new information, future events or otherwise, except to the extent legally required.

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