Major Events after the period under review

EU Commission ends anti-trust investigation against RWE

The European Commission has closed its anti-trust investigation of RWE’s German electricity business. This was officially communicated to us in October and confirms our opinion, verified by external certified public auditors, that RWE operates according to market rules and in particular does not withhold any electricity generation capacity or manipulate wholesale prices. The Commission had started investigating several European power utilities in 2006, following an electricity sector inquiry.

Moody’s downgrades RWEs rating to A2

As expected, in early November, Moody’s lowered our long-term credit rating from A1 to A2. The outlook remains “negative.” The main reason for the downgrade given by the rating agency is the rise in our debt and reduction in our financial flexibility resulting from the acquisition of Essent. The new rating is in line with Standard and Poor’s. We do not believe that the downgrade materially affects RWE’s existing bonds or those it may issue in the future.

RWE prepares for new-build project in Turkey

At the end of October, we signed an agreement with Greek-based Metka to construct a combined-cycle gas turbine (CCGT) power plant in Denizli in the west of Turkey. The 775-MW facility will be owned and operated by a joint venture between RWE (70 %) and Turcas (30 %). We intend to take a final decision on the investment in the first quarter of 2010. The CCGT plant is scheduled to go online at the end of 2012.

Exit from nuclear power project in Bulgaria

At the end of October, we terminated the joint venture agreement to develop a nuclear energy project in Belene in northern Bulgaria. We had partnered with the state-owned energy utility NEK. The project’s financing could not be finalised within the agreed period. Safety issues were not a factor in the decision. RWE held a 49 % stake in the project, with NEK owning 51 %.