Project Presentation

June 2010

Project Overview: Key Figures

Location: Akhaltsikhe, Southern Georgia

River: Mtkvari

Head: 100.0 m

Water discharge: 55.0 m3/sec

Number and type of units: 2; Francis

Construction time: 3.5 years

Potential installed capacity: 46.4 MW

Annual power output: 253.0 GW/h

Capacity load factor: 63.0 %

Estimated construction costs: US$ 70.0-80.0 mln

Estimated tariff range (kWh): US¢ 6.1 - 7.4

Estimated payback period: 6-7 years

Expected life-span of the plant: 50 years

Mtkvari HPP project envisages a

construction of a 46.4 MW hydro power

plant in Akhaltsikhe, South Georgia

The actual construction of Mtkvari

HPP was launched in November 2009

The construction works are

expected to last 3.5 years

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Project location

Mtkvari HPP is located in Southern Georgia…

….28 km away from the Turkish border

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Project location: site description

The headworks of the plant islocated in the vicinity of thevillage Rustavi, Aspindzadistrict, where Mtkvari riverwill be dammed and divertedinto a 9.6 km long headracetunnel to the powerhouse invillage Sakuneti, Akhaltsikhedistrict, which will behousing two 23.2 MW powergenerating units

PowerHouse area

Headworks area

Headrace tunnel (9.6 km)

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Project success elementsSector

• Georgia has the largest underutilizedhydro power generating potential inEurope, with only 30% of the totalcapacity exploited, situated next toTurkey with the 2nd largestelectricity demand growth rate in theworld at 8% p.a. for the past 20-25years

• There is a huge government supportfor the development of the Georgianenergy sector, visible throughreforms and a consequent near-fullliberalisation of tariffs as well asgovernment-led large scaleinvestments in the sector and relatedinfrastructure, including theconstruction of a 500 kVtransmission grid, connectingGeorgia to Turkey, funded by theGeorgian government along withKfW and EBRD

• The new grid will allow Georgianelectricity exports not only to theneighbouring Turkey, but also to therest of the continental Europe, afterTurkey joins the European Networkof Transmission System Operatorsfor Electricity, due July 2010

Location• Mtkvari HPP probably has the best

location for the construction of HPPwith ample water supply and thealready-existent, well developedinfrastructure

• It is environmentally and sociallyfriendly project, requiring norelocation of people and imposingminimal damage to the landscape

• The HPP is located close to theTurkish border, the major potentialcustomer for the producedelectricity

• The new 500 kV transmissiongrid, which is currently underconstruction, passes 2 km awayfrom the HPP site. The new line willexport 1,050 MW electricity fromGeorgia to Turkey, and will be usedby Mtkvari HPP, among others, asthe main grid for electricity exports

• It is notable that newly built HPPs inGeorgia are to have the right toexport electricity firsthand, over allthe other electricity sources

Team• The management team comprises

some of the most qualifiedprofessionals both in the energy andfinance fields, with extensiveexperience in Georgian and Turkishenergy sectors as well as in thefinancial hubs such as the city ofLondon

• The engineers employed on theMtkvari HPP project are the mostexperienced in Georgia, havingworked onplanning, design, construction andrehabilitation of some of the largestHPPs in Georgia, including thelargest Enguri HPP (1,300 MW)

• Companies employed on the projectare the leading engineering andproject development companies inGeorgia and Europe

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Project timelineSeveral leading project development

and engineering companies hiredto conduct the preliminarystudies and research works onMtkvari HPP

Georgian company GeoEngineeringLtd completed the topography ofthe surface map for Mtkvari HPPand proceeded with theGeological survey completing it inQ2 2009

Ukrainian company UkrHydroProjectcompleted the technical projectdesign of Mtkvari HPP

Icelandic company Verkiscompleted a feasibilitystudy on the project

Turkish company ENCON completedthe Environmental and SocialImpact Assessment

Ministry of EnvironmentProtection and NaturalResources approved theEnvironmental and SocialImpact Assessment

President of Georgia M. Saakashviliand the Minister of Energy A.Khetaguri ceremonially unveiledthe commencement of MtkvariHPP construction

The acquisition of lands, usedas a power plantconstruction site, waterintake and floodingzones, was completed

Infrastructural works fullyunderway with most ofthe basic infrastructurealready in place

Tunnel drillingmachine, DOSCOroadheaderdelivered andassembled on the site

Headrace tunnel drillingworks commence

Q3-Q4, 2008

Q1-Q2, 2009

Q4, 2009

Q3, 2009

Q3, 2009

Q4, 2009

Q4, 2009

Q4, 2009

Q1, 2010

Q2, 2010

Q2, 2010Q4, 2009

Local authorities ofAkhaltsikhe and Aspindzadistricts granted theconstruction license

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Studies conducted on the site

Topography

Geology

Hydrology

Seismology

The site comprises in general a mountain range extending between the proposed upper and lower sections of the projectIt is assumed that the stability of the slopes adjoining the proposed project structures is adequateThe upper project section where the headrace works, dams and power intake with appurtenances will be located seemsto favour the construction of a rockfill dam with a central impervious core

The detailed study and research was performed on the site, with several wells drilled down the surfaces where thetunnel and powerhouse constructions will take placeSample materials from the site were taken into the laboratory for the detailed analysisThere was a detailed geological and hydrological research performed on the 9.6 km headrace tunnel area with 7 wellsdrilled into the surface, with the total length of 973 mIt was determined that the geology of the area in general is considered favourable for the construction of the structuresrelevant to the hydropower projectA tunnel drilling machine, roadheader, was chosen as an optimal method of excavating the tunnel

Georgia´s climate is affected by subtropical influences from the west and Mediterranean influences from the eastThe midwinter average temperature is 5 °C and the midsummer average is 22 °CThe average discharge rate of Mtkvari river is 55 m3/sA storage reservoir upstream of the project in the main river or some of its tributary rivers would be very valuable andincrease the energy production during the high discharge season of river Mtkvari

The project is located in the central part of South Georgia. It comprises seismically active zones of the central part ofthe Ajara-Trialeti infolded-faulted mountain belt, which has a high seismic potential, and the western part of theseismically very active Javakheti UplandIt is assumed that the European Earthquake Standard, Eurocode 8 (FS ENV 1998:1994) can be applied as guidance forthe definition of a design spectrum for the project

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Project conceptual design

The intake pond will be formed by a dam across the river courseIt will be some 3 km long with the maximum width of about 0.6 kmThe usable water volume will be 900 000 m3The pond can only be used for limited regulation during a day

Mtkvari river is diverted to execute the headworks (main dam, power intake) in dryDiversion will be achieved by excavating a diversion canalThe diversion canal will be about 80 m long and 12 m wideThe canal will be permanently closed at the end of construction

The main dam will be about 300 m long with a maximum height of 32 m Dam will be located slightly downstream of the tunnel intakeIt will have an earth-rockfill structure with an impervious core

Cofferdam will be constructed from rockfill and may apply other readily available fillLoose overburden will be set aside to be used in cofferdamGravel fill & finer grained fill will be placed on the upstream slope to reduce leakageLastly cofferdam will be raised up to the designed level

Spillway will be a 120 m long ogee formed concrete structureIt will be extending between the diversion canal and the main damThe water head at the spillway will normally be limited

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Intake pond

Diversion canal

Main dam

Cofferdam

Spillway

Hea

dwor

ks

Project conceptual design

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Headrace tunnel

Electromechanical equipment

Electromechanical equipment will include 2 Francis type Turbines, 23.2 MW eachThe turbine manufacturer will also provide for governor and shut-off valves, cooling system, sumppump system, generators and excitation systems, generator terminal equipment, powertransformers, high voltage substation equipment, station power supply systemsElectromechanical equipment will also include the control-and protection systems, which will beinstalled in the powerhouse

A 9.6 km headrace tunnel will be excavated with a DOSCO roadheaderThe Mtkvari river will be dammed upstream village Rustavi and diverted into a headrace tunnelAt the downstream end of the headrace tunnel, water will enter into the powerhouseThe powerhouse will be equipped with two 23.2 MW power generating units

Construction works - roads

The inner roads on the site, as well as around it have been put in place

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Construction works – workers’ lodgings

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The company has completed the construction of workers’ dwellings and a canteen

Construction works – administrative building

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The administrative building for the project engineers has been set up

Construction works - warehouses

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One warehouse has already been constructed and another one is currently being built to serve as a storage area for Mtkvari HPP construction materials

Construction works – water wells

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Water wells have been drilled in 3 different places on the site, which will supply the water for workers' lodgings, the canteen, the tunnel drilling machine (DOSCO roadheader) and the concrete factory

Construction works – transmission line

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A 10 kV transmission line has been built, connecting the site directly to the grid

Construction works – concrete factory

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A concrete factory has been set up on the construction site to provide concrete for the headrace tunnel, the bridge and other building works

Construction works – spillway drain

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The spillway drain has been put in place near the headrace tunnel

Construction works – DOSCO roadheader

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The tunnel drilling machine, DOSCO roadheader, is fully assembled and ready to start the drilling works

Construction works – tunnel portal

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The portal of a 9.6 km headrace tunnel construction has been built and the concrete platform has been laid in front of the tunnel portal

Construction works – bridge

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The construction of a bridge on the Mtkvari river in underway, which will allow an easy access to the site from the main highway

Appendix: Caucasus Energy & Infrastructure

Caucasus Energy & Infrastructure is a joint stock companyset up in November 2007 under the Georgian legislation

The company completed a database of technical andeconomic parameters of potential greenfield HPP projectsin Georgia and shortlisted 26 most attractive projects forfuture potential construction, with the total requiredinvestment of approximately 500 mln Euros

Of these projects, Mtkvari HPP presented the mostattractive opportunity and CEI proceeded with itsdevelopment, obtaining the license for the construction andgaining the required initial funding

After the competitive bidding process CEI obtained alicense for the construction, building and operation of a46.4 MW Mtkvari hydro power plant in Southern Georgia

In January 2009, CEI set up a special purpose vehicleMtkvari HPP LLC and allocated capital equivalent of US$15 million for the implementation of Mtkvari HPP project

The construction of Mtkvari hydro power plant began inNovember 2009 and is expected to last 3.5 years

The HPP construction works are going according to thetimetable and it is expected that the Mtkvari HPP willbecome fully operational by 2014

CEI is currently working on signing the Power PurchaseAgreements with several Georgian and Turkish electricitycompanies. At the same time the company is working withseveral IFIs and strategic partners on raising debt andpossibly additional equity financing in order to obtain fullfunding for Mtkvari HPP

Mtkvari HPP project is fully owned and developed by JSC Caucasus Energy & Infrastructure

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Appendix: CEI shareholder structure

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CEI’s shares are traded on the Georgianstock exchange since 2008, under theticker NRGY

The free float is approximately 84%

CEI launched a GDR program with BNYMellon in March 2008, with one GDRrepresenting 10 ordinary shares

The company represents a sole investablevehicle offering investors a broadexposure to the energy and infrastructuresegments of the economy inTranscaucasia

Appendix: CEI management

Archil Mamatelashvili (Chief Executive Officer)Archil Mamatelashvili joined the Company in the capacity of Chief Executive Officer in October 2007. Prior to joining CEI, Mr.Mamatelashvili served as the Country Manager for Energo Pro S.A. in Istanbul, Turkey (April 2007 – October 2007) and as aDeputy Minister of Energy of Georgia (March 2005 – April 2007). Mr. Mamatelashvili holds an Undergraduate degree inEconomics from Tbilisi State university, and a joint international MBA degree from Weatherhead School of Management of CaseWestern Reserve University.

Irakli Bezhuashvili (Chief Financial Officer)Irakli Bezhuashvili joined CEI in the capacity of Chief Financial Officer in April 2008. Prior to joining CEI, Mr. Bezhuashviliserved as a Senior Consultant at PricewaterhouseCoopers as well as an Audit Manager at UBC International Ltd. He has alsooccupied the post of Director at Georgian Branch of Eilamed Raj BV. Irakli Bezhuashvili obtained his Bachelor’s degree inMunicipal Engineering and Economy from Technical University of Georgia. Mr. Bezhuashvili is an accredited member of theAssociation of Certified Chartered Accountants (ACCA).

Bidzina Bejuashvili (Executive Chairman)Bidzina Bejuashvili served first as a Chairman of the Supervisory Board of CEI and consequently as an Executive Chairman ofCEI since November 2007. Mr. Bejuashvili also serves as the Chief Executive Officer of Abbey Asset Management. Prior tojoining CEI and Abbey Asset Management, Mr. Bejuashvili served as a Vice-President at the leading global investment bankingfirm JPMorgan Chase, London, and was responsible for equity research coverage of the oil & gas sector in Russia, CEE, MiddleEast and Latin America. Prior to joining JPMorgan Chase in October 2005, Mr. Bejuashvili served in similar capacities at ItalianUnicredit (2003-2005) and RZB Austria, London (2000-2003). Mr. Bejuashvili has twelve years of professional experience ininvestment banking, and holds a dual British and Georgian citizenship. Mr. Bejuashvili holds an Undergraduate degree fromMoscow State University, Dept. of Applied Mathematics and Cybernetics and a Masters degree in Economics from BostonUniversity.

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Appendix: Mtkvari HPP team

Simon Bakhturidze – Head EngineerSimon Bakhturidze serves as a head engineer at the Mtkvari HPP LLC. Prior to joining Mtkvari HPP Mr. Bakhturidze served asa head of hydro-technical department at the Georgian Energy Generation, where he was responsible for investigation, monitoringand planning of reconstruction and maintenance works of Georgian HPPs. Mr. Bakhturidze has extensive experience in theGeorgian hydro energy field and has worked on such projects as Enguri HPP rehabilitation (the biggest hydro power plant inGeorgia), where he was a consultant to the chairman of the board of directors on technical issues (2005-2006). At the same timeMr. Bakhturidze served as an invited expert for the USAID project that envisaged construction of Khudori HPP andNamakhvani HPP. Mr. Bakhturidze has also served as a chief specialist at the Ministry of Energy of Georgia, on the research ofnew technologies and implementation of new methods into the Georgian energy sector. Mr Bakhturidze holds diplomas fromGeorgian State University, from the faculty of Radio-Physics and Georgian Polytechnic University in mechanical engineering.

David Kviriasvili – Technical EngineerDavid Kviriashvili serves as a Technical engineer at Mtkvari HPP LLC. Prior to joining Mtkvari HPP Mr.Kviriasvili served asan electrical engineer at Energo Pro Georgia at the commercial department in 2005-2008 and as an engineer at the KakhetiEnergy Company in 2002-2005. Mr. Kviriasvili holds a Diploma from the Georgian Agrarian University from the faculty ofelectrification.

Moveli Chaava – EngineerMoveli Chaava works at Mtkvari HPP LLC as an engineer since 2009. Prior to joining Mtkvari HPP Mr. Chaava worked as adirector at the Enguri underground buildings’ construction department (1980-2009). He has also worked as a chief engineer andafterwards as a deputy head of the Enguri N5 power node (1966-1978). Mr. Chaava is one of the most experienced engineers inthe hydro power sector in Georgia and has worked on various HPP sites during their construction, reconstruction and operationalperiods.

Vasil Japaridze – EngineerVasil Japaridze serves as an engineer at the Mtkvari HPP LLC. Prior to joining Mtkvari HPP, Mr. Japaride worked on the RioniHPP rehabilitation project in 2008-2009. In 2000-2008 Mr. Japaridze worked on planning and construction of Zarmagi HPP inOsetia. In 1986-2000 Mr. Japaridze was employed at Sakenergo where he worked on planning, organization and refurbishmentworks of different HPPs in Georgia as well as collection, control and analysis of the hydrological data.

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Contacts & important notice

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This material is for information purposes only and does not constitute an offer to sell, nor a solicitation of an offer to buy shares in Mtkvari HPPLLC or JSC Caucasus Energy & Infrastructure in any jurisdiction to any person to whom it is unlawful to make such an offer or sale. Thispresentation contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to theimplementation of strategic initiatives and other statements relating to our business development and financial performance. While theseforward-looking statements represent our judgments and future expectations concerning the development of our business, a number ofrisks, uncertainties and other factors could cause actual developments and results to differ materially from our expectations. These factorsinclude, but are not limited to, (1) general market, macroeconomic, governmental, legislative and regulatory trends, (2) movements in local andinternational currency exchange rates, interest rates and securities markets, (3) competitive pressures, (4) technological developments, (5)management changes and changes to our group structure and (6) other key factors that we have indicated could adversely affect our business andfinancial performance, which are in our past and future filings and reports, including those filed with the NSCG.

We are under no obligation (and expressly disclaim any such obligations) to update or alter our forward-looking statements whether as a result ofnew information, future events, or otherwise.

For further information please contact:

Bidzina Bejuashvili, Executive Chairmanbbejuashvili@cei.ge+995 95 227 997

Archil Mamatelashvili, CEOamamatelashvili@cei.ge+995 99 159 573

Disclaimer