First Project of 42 MW completed

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Caparo Energy Limited

("Caparo Energy" or the "Company")

First Project of 42 MW completed

The board of directors of Caparo Energy (the "Board") is pleased to announce that the Company's first project, totalling 42 MW and comprising 20 Suzlon S-88 2.1 MW wind turbine generators ("WTG"), has been connected to the grid and commissioned.

The project is currently considered by the Board to be one of the best sites available in Rajasthan and has an overall potential for over 400 MW.

As stated in the company's update on 20th June, the Company has entered into a 20 year Power Purchase Agreement ("PPA") with the Rajasthan State Electricity Board for the sale of power generated by the 20 WTGs at a rate of Rs. 4.22 per kWh. The project will also receive an additional incentive of 4% over and above the energy tariff, resulting in a net tariff of Rs. 4.39 per kWh. Furthermore, the project is eligible for approval under the Generation Base Incentive Scheme to earn an additional Rs. 0.50 per kWh. The Board also expects the Company to receive revenues through CER credits.

The Company also expects that its second project in Mahidad, Gujarat, comprising 12 Suzlon S-88 2.1 MW WTGs, totalling 25.2 MW will be fully completed by mid-August 2011.

Further information on the Company can be found at www.caparoenergy.com.

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