ewz (Deutschland) GmbH.Annual Report 2016.

ewz (Deutschland) GmbH.Annual Report 2016.ewz (Deutschland) GmbH is a wholly owned subsidiary of ewz (Zurich Municipal Electric Utility).

Table of Contents.

ewz (Deutschland) GmbH.Annual Report 2016.

Foreword by the Executive Board. 5Activities of ewz (Deutschland) GmbH. 8Portfolio. 10Finances 2016. 16Financial Report. 18 Scope and principles of consolidation. 20

Wind farm Alered, wind farm portfolio Atlantic, southern Sweden.

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2016 was a year marked by various developments in those coun-tries where ewz (Deutschland) GmbH is active. The addition of new renewable energies continued apace in 2016. A new record expansion in onshore wind energy capacity in Germany was al-ready reported for the first half of 2016. In terms of offshore, ex-pansion figures were slightly muted when compared with the record year of 2015; in Germany in 2016, new offshore wind farms contributed an output of 818 MW to the grid, which was down 64% from the previous year. In France, onshore plants with a total output of 1 561 MW were built. The expansion in Sweden took wind energy capacity to around 493 MW.

On September 2, 2016, the ground-breaking ceremony took place for the construction of the first submarine cable link be-tween Germany and Norway, spanning more than 600 kilom-eters. The transmission capacity will be 1.4 GW. It is difficult to predict the impact that the new infrastructure will have on electricity prices in both countries. Commissioning is sched-uled for 2020.

2016 showed different production conditions. In Sweden and Norway, the planned production targets were achieved thanks to good wind conditions. In Germany and France, the last quar-ter in particular was very poor for wind; production achieved by the onshore wind farms, at 93 GWh and 32 GWh, respective-ly, fell short of the previous year’s figures by 19.5 % and 12.6 %.

Foreword by the Executive Board. Summary of 2016.

The first full year of production for the offshore Butendiek wind farm ran according to plan in terms of the technology. Howev-er, the below-average wind conditions at sea ensured that the production output estimate of 1 287 GWh was missed by 11.6%.

In Spain, the solar thermal power plant Puerto Errado 2 was able to achieve the budgeted production figures thanks to good sun-light conditions. The technical optimization measures enabled better use of solar radiation.

At a few of the turbines in ewz’s wind farm portfolio, studies were conducted into the behavior of the plants. The output of some of the wind turbines in the Swedish portfolio could be op-timized by improving the parameters. In addition, the behavior of the turbines connected to the electricity grid at the Epinette wind farm in France was examined as part of a collaboration project involving industry and institutions of higher education.

For the Høg-Jæren wind farm in Norway, a decision was made for the operators to handle turbine maintenance independently. Service technicians with local experience were hired.

The management systems of ewz (Deutschland) GmbH and its five German wind farm companies were newly certified ac-cording to ISO 9001:2015. Following certification according to ISO 9001:2008 in 2015, this upgrade to certification according to the new ISO standard was achieved in December 2016 based on a surveillance audit. This new standard focuses more on the strategic direction of the organization and demands a more stringent customer focus and more prominent process and risk management. Over the next few years, further process optimiza-tions will be targeted from a technical and economic viewpoint.

Wind farm Alered, wind farm portfolio Atlantic, southern Sweden. Hanspeter Rahm Marcel Frei Nadeschda Hoidn Wiede Martin Roth

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Windpark Dörmte, Lower Saxony, Germany.

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Activities of ewz (Deutschland) GmbH.Overview.

Key figures (as per December 2016).Equity interests 10Capacity (share of ewz) 129.5 MWPower production 324.5 GWh

¡ ewz (Deutschland) GmbH. Founding of the holding company for the acqui-sition of equity interests in foreign renewable energy production facilities.

¡ Crussow onshore wind farm, Germany. Acquisition of three wind turbines.

¡ Dörmte, Kleinbrem-bach, Schermen and Vogelsberg onshore wind farms, Germany. Acquisition of a total of 27 wind turbines.

¡ Høg-Jæren onshore wind farm, Norway. Acquisition of a 20% share.

¡ Høg-Jæren onshore wind farm, Norway. Commissioning of 26 wind turbines.

¡ Puerto Errado 2 solar thermal power plant, Spain. Acquisition of a 10% share.

¡ Høg-Jæren onshore wind farm, Norway. Commissioning of the last six of a total of 32 wind turbines.

¡ Puerto Errado 2 solar thermal power plant, Spain. Commissioning of the solar field with a reflec-ting surface of around 302 000 m2.

¡ Epinette onshore wind farm, France. Acquisition of 100% of the construction-ready wind farm project. Realization of the first wind farm to be developed and owned by ewz.

¡ Butendiek offshore wind farm, Germany. Acquisition of a 49% equity interest in wpd Butendiek Beteiligungs GmbH, which in turn owns ten percent of the wind farm company.

¡ Epinette onshore wind farm, France. Commissioning of the six wind turbines.

¡ Offshore wind farm Butendiek, North Sea, Germany. Constructing of the first wind turbines.

¡ Onshore Atlantic wind park portfolio, Sweden. Acquisition of a 51% equity interest in the Atlantic wind park portfolio, consisting of the four wind farms Alered, Mungseröd, Ramsnäs and Skalleberg.

¡ Butendiek offshore wind farm, North Sea, Germany. Commissioning of a total of 80 wind turbines.

2008 2010 2011 20132012 2014 2015

1 Høg-Jæren; Wind onshore NO 2 Mungseröd; Wind onshore SE 3 Ramsnäs; Wind onshore SE 4 Skalleberg; Wind onshore SE 5 Alered; Wind onshore SE 6 Butendiek; Wind offshore DE 7 Dörmte; Wind onshore DE 8 Schermen; Wind onshore DE 9 Crussow; Wind onshore DE 10 Vogelsberg; Wind onshore DE 11 Kleinbrembach; Wind onshore DE 12 Epinette; Wind onshore FR 13 Puerto Errado 2; Solar thermal ES

Equity interests of ewz (Deutschland) GmbH in Europe.

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Chronological overview.A summary.

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Capacity 6 MWWind turbines 3 Vestas V-80; 2 MWShare of ewz 100%Commissioning 2002Power production 11 GWh

Capacity 73.6 MWWind turbines 32 Siemens

SWT-2.3-93; 2.3 MWShare of ewz 20%Commissioning 2011 (26) 2012 (6)Power production 222 GWh

Capacity 16.5 MWWind turbines 11 REpower MD-77;

1.5 MWShare of ewz 100%Commissioning 2006Power production 31 GWh

Capacity 30 MWTechnology Lineare Fresnel

collectorsShare of ewz 10%Commissioning 2012Power production 43 GWh

Capacity 10 MWWind turbines 5 Vestas V-90; 2 MWShare of ewz 100%Commissioning 2006Power production 23 GWh

Capacity 12 MWWind turbines 6 Enercon E82; 2 MWShare of ewz 100%Commissioning 2014Power production 36 GWh

Capacity 16 MWWind turbines 8 Vestas V-90; 2 MWShare of ewz 100%Commissioning 2007 (6) und 2009 (2)Power production 31 GWh

Capacity 288 MWWind turbines 80 Siemens

SWT-3.6-120; 3.6 MWShare of ewz 4.9%Commissioning 2015Power production 1260 GWh

Capacity 6 MWWind turbines 3 Vestas V-90; 2 MWShare of ewz 100%Commissioning 2009Power production 14 GWh

The wind farm is located 90 kilometers to the north-east of Berlin, close to Angermünde, in the Federal State of Brandenburg. The immediate surroundings consist of agricultural land with arable farming and meadows. ewz (Deutschland) GmbH acquired three of a total of eight turbines in the year 2008.

Since mid-2011, 26 wind turbines have been in operation at the Høg-Jæren wind farm; six more were added at the end of 2012. The site to the south of the port of Stavanger is one of the most productive inland sites for wind energy. The Høg-Jæren wind farm received the award of «Wind Warrior of the Year» in 2013 and 2014.

Crussow wind farm, Brandenburg, Germany. Høg-Jæren wind farm, Stavanger, Norway.

Dörmte wind farm, Lower Saxony, Germany. Puerto Errado 2, Calasparra, Spain.

Kleinbrembach wind farm, Thuringia, Germany. Epinette wind farm, Nord Pas-de-Calais, France.

Schermen wind farm, Saxony-Anhalt, Germany. Butendiek offshore wind farm, North Sea, Germany.

Vogelsberg wind farm, Thuringia, Germany.

The Dörmte wind farm is located in the district of Uelzen, Lower Saxony, 70 kilometers to the south east of Hamburg. The wind farm is surrounded by extensive arable land.

Puerto Errado 2, a solar power plant based on Fresnel technol-ogy, reached completion in the sun-drenched Spanish region of Murcia in 2010. It was built under Swiss management. Alongside two conventional power plant blocks, the facility comprises a solar field of around 302 000 m2 of reflecting surface.

The Kleinbrembach wind farm is located in the district of Söm-merda, Thuringia, 75 kilometers to the south-west of Leipzig. The wind farm is built on a hill in the middle of arable farmland and cannot be seen from the village and borders directly on the Vogelsberg wind farm.

The site is close to the coast, around 30 kilometers from the Eng-lish Channel, and benefits from especially high wind potential. ewz (Deutschland) GmbH took a stake in the wind farm project in 2013. It is the first wind farm to be developed and owned by ewz, realized after only one year of construction. It is also the first to enable ewz to gather experience with direct drive technology.

The Schermen wind farm is located in the district of Jerichower Land, Saxony-Anhalt, 15 kilometers to the north-east of Magde-burg. It benefits from different wind strengths at different heights, as there are altitude differences of up to 20 meters between the individual turbines.

The Butendiek offshore wind farm lies in the German North Sea, around 32 kilometers from the island of Sylt. The first turbines began feeding electricity into the public grid in February 2015, only eleven months after construction started in March 2014. The fastest construction of an offshore wind farm in the North Sea to date was completed in August 2015.

The Vogelsberg wind farm is also located in the district of Söm-merda, Thuringia, 75 kilometers to the south west of Leipzig. The wind farm is surrounded by extensive corn fields and is situat-ed on a slight rise. Only a high-voltage power line and the mu-nicipal boundary separate the Vogelsberg and Kleinbrembach wind farms.

Portfolio.Brief description.

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Capacity 13.2 MWWind turbines 4 Vestas V-112; 3.3 MWShare of ewz 51%Commissioning 2014Power production 37 GWh

Capacity 15 MWWind turbines 4 Vestas V-100; 1.8 MW

4 Vestas V-100; 2.0 MWShare of ewz 51%Commissioning 2014Power production 48 GWh

Capacity 13.4 MWWind turbines 3 Vestas V-100; 1.8 MW

4 Vestas V-100; 2.0 MWShare of ewz 51%Commissioning 2014Power production 38 GWh

Capacity 19.4 MWWind turbines 2 Vestas V-90; 2.0 MW

3 Vestas V-100; 1.8 MW5 Vestas V-100; 2.0 MW

Share of ewz 51%Commissioning 2015Power production 59 GWh

Windpark Alered.Atlantic wind park portfolio, southern Sweden.

Windpark Mungseröd.

Windpark Ramsnäs.

Windpark Skalleberg.

The four wind farms Alered, Mungseröd, Ramsnäs and Skalleberg lie in wooded areas on hills around 200 kilometers apart and benefit from different wind regimes. ewz (Deutschland) GmbH acquired a 51 percent share in three of the four wind farms in January 2015 and in the fourth, Skalleberg, in March 2015 on a turnkey basis.

Wind farm Schermen, Saxony-Anhalt, Germany.

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Wind farm Schermen, Saxony-Anhalt, Germany.

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Finances 2016.Consolidated profit and loss statement.

Finances 2016. Consolidated balance sheet.

Consolidated profit and loss statement. 2016 2015EUR EUR

Revenue 22 790 223 25 991 588Other revenues 550 083 535 900 Total revenues 23 340 306 26 527 488 Operating expenses –6 877 913 –7 541 701 Operating income before depreciation and amortization 16 462 393 18 985 787 Depreciation and amortization –11 572 083 –16 821 793 Operating income 4 890 310 2 163 994 Financial income 477 262 504 894 - Financial income from minority participations 477 261 501 650 - Other financial income 1 3 244Financial expenses –3 290 733 –3 772 866- Interest costs affiliates –277 765 –317 462- Interest costs third parties –2 911 880 –3 314 168- Various financial expenses –101 088 –141 236Income before taxes 2 076 839 –1 103 978Taxes –695 388 –498 056Net income after taxes 1 381 451 –1 602 034

Attributable to:- Shareholders of ewz (Deutschland) GmbH 873 431 –2 573 288- Non-controlling interests 508 020 971 254

Consolidated balance sheet. 2016 2015EUR EUR

Long-term assets 171 980 450 85% 186 278 042 90%Intangible assets / goodwill / company value 15 054 387 16 598 437 Property / plant / equipment 128 480 075 138 505 132 Participations / loans to minority participations 28 445 988 31 174 473

Short-term assets 31 075 438 15% 21 160 573 10%Trade receivables 1 693 987 3 350 508Receivables from minority participations 746 013 546 266Other receivables 1 776 746 2 316 585Accrued income 2 265 435 2 344 062Cash at banks 24 593 257 12 603 152

ASSETS 203 055 888 100% 207 438 615 100%

Equity capital 87 082 600 43% 85 701 149 41%Subscribed capital 25 000 25 000 Capital reserve 92 813 412 92 813 412 Shareholder loan 15 800 000 15 800 000 Retained earnings –26 435 604 –23 862 316 Group profit 873 431 –2 573 288 Non-controlling interests 4 006 361 3 498 341

Long-term liabilities 88 894 206 44% 114 059 870 55%Financial liabilities 86 526 102 112 473 141 Provisions 2 368 104 1 586 729

Short-term liabilities 27 079 082 13% 7 677 596 4%Financial liabilities 25 000 000 5 000 000 Other liabilities 1 454 370 2 033 329 Deferred income 624 712 644 267

LIABILITIES 203 055 888 100% 207 438 615 100%

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Offshore wind farm Butendiek, North Sea, Germany.

Financial report.Group result positive for the first time.Consolidated income statement.For the first time, the ewz (Deutschland) GmbH Group closed the financial year with a positive result after taxes of EUR 1.4 million, which is EUR 3.0 million higher than the previous year. The minority interests in the earnings amounted to around EUR 0.5 million.

Compared with the previous year, the operating income (EBITDA) was some EUR 2.5 million lower. Poor wind levels led to lower revenues in Germany (-20%) and France (-12%). In Sweden, the revenue was around 5% lower than in the previ-ous year. Total costs fell by 8.8% compared with 2015. In the year under review, depreciation and amortization amounted to EUR 11.6 million, some EUR 5.2 million lower than the previous year in which a special write-down had to be made. At the end of 2016, the operating income (EBIT) was EUR 2.7 million above the previous year.

The financial result changed by some EUR 0.5 million com-pared with 2015.

Consolidated balance sheet.The balance sheet total amounted to EUR 203.1 million as at December 31, 2016, down around EUR 4.4 million from the pre-vious year.

The repayment of loans granted and depreciation reduced non-current assets to EUR 172 million as at the end of 2016. Cash and cash equivalents increased by EUR 12 million. This item was positively impacted largely by cash inflow from operating activities and by the repayment of loans granted; it was reduced by the repayment of debt due in the amount of EUR 5.9 million.

The equity ratio as at December 31, 2016, was up 2% to a new level of 43%.

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Scope and principles of consolidation. The ewz (Deutschland) GmbH Group.

ewz Windpark Crussow GmbH Germany

ewz parc éolien Epinette S.A.R.L. France

ewz Windpark Dörmte GmbH Germany

ewz Atlantic Sverige AB Sweden

ewz Windpark Kleinbrembach GmbH Germany

wpd Butendiek Beteiligungs GmbHGermany 1)

ewz Windpark Schermen GmbH Germany

Jæren Energi ASNorway

ewz Windpark Vogelsberg GmbH Germany

Tubo Sol Puerto Errado 2 S.L. Spain

ewz

ewz (Deutschland) GmbH

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100%

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100%

51%

49%

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10%

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1) ewz (Deutschland) GmbH holds a 49% share of the wpd Butendiek Beteiligungs GmbH, which in turn holds a 10% share of the Offshore wind farm Butendiek.

Impressum.Publisher ewz (Deutschland) GmbH Lohnerhofstraße 2 78467 Constance

Phone +49 7531 8926 0 info@ewz-energie.de

Issue May 2017

Cover picture Windpark Dörmte, Lower Saxony, Germany.

Edition 35 copies, printed on Cyclus FSCR FSC recycling (climate-neutral & with green energy printing).

Duplication Permitted with indication of source.

Units of measurement.GWh = Gigawatt hour (1 billion watt hours)MW = Megawatt (1 million watts)

The consolidated annual financial statements of ewz (Deutsch-land) GmbH Group include the financial statements of ewz (Deutschland) GmbH, its subsidiaries and majority sharehol-dings. Subsidiaries are companies which are controlled direc-tly by ewz (Deutschland) GmbH and wholly owned by it. Majo-rity shareholdings are companies in which ewz (Deutschland) GmbH holds at least 51% of the equity. Non-controlling inte-rests in affiliated companies (share ≤ 50%) are recognized in the consolidated financial statements at the cost of acquisition. All Group-internal relationships are eliminated. The consolidated financial statements are not subject to an audit requirement.

For the year under review, the scope of consolidation of the ewz (Deutschland) GmbH Group remained unchanged from the previous year.

ewz (Deutschland) GmbH Lohnerhofstraße 2 78467 Constance

Phone +49 7531 8926 0info@ewz-energie.de

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