AS Tallinna Vesi STOCK EXCHANGE RELEASE 18.01.2007 TALLINNA VESI INVESTS 346.9 MILLION KROONS IN 2007 The capital expenditure budget of AS Tallinna Vesi in 2007 is 346.9 million kroons, which is almost 100 million kroons more than in 2006. "This is the largest investments programme throughout the years, the main focus of which is aimed at the continuous improvement of the quality of drinking water. Additional requirements of the directive of the European Commission on the quality of drinking water came into force as of 1 January 2007 and requires, among others, stricter standards for the iron content and turbidity of drinking water. Although the quality of drinking water is already very high and today in compliance with this directive, investments are necessary in order to maintain the high level of quality and to continuously improve it," says Roch Chéroux, the Chairman of the Management Board of AS Tallinna Vesi. 118 million kroons from the overall investment will be aimed at the continuous improvement of the quality levels of water production and wastewater treatment of the City. Of this over 33 million kroons are intended for reconstructing water networks in the City and for increasing water quality. This includes the renovation of the drinking water network, the maintenance works on the Pirita Ülemiste channel will continue and maintenace work will be completed on the level control devices at the Kaunissaare reservoir. Renovation of one of the Ulemiste Water Treatment Plant water reservoirs will be completed in 2007 and the tank will be taken into use again. This reservoir was originally constructed in the 1960s. More than 28 million kroons will be invested in renovating sewerage pipeline, in all approximately 5.5 km of pipeline will be renovated in 2007. Approximately 45 million kroons will be allocated to the improvement of the performance of water treatment plant and wastewater treatment plant, including 21 million kroons, which will be allocated to improving the sludge treatment process and making it more environmentally friendly. "We shall continue to invest in the environmental project regarding processing the sludge that arises as one of the products of the wastewater treatment process. The compost fields for the management of sludge mixture will also be completed. These fields give us the opportunity to reuse the residue of sludge as soil filling and landscaping. As a result of the project we can produce soil that is of higher quality and even more environmentally friendly, instead of disposing the sludge in a landfill," added Chéroux. In 2007 the Company has planned 210 million kroons for investments into new water and sewerage pipeline construction, which also includes the works that have been carried forward from 2006. AS Tallinna Vesi has submitted to the City of Tallinn the first part of the new construction works programme of water and sewerage pipeline in the volume of 105 million kroons. "An extraordinarily warm winter enables us to start the construction works early this year. We have already carried out the first procurements, chosen the winners of the procurements and prepared the contracts, which means that we are practically ready to start the construction works as soon as the City has approved the construction works programme," explained Cheroux Most of the new water, wastewater and storm water pipeline will be constructed in the area of Nõmme, Lilleküla, Veskimetsa and Merivälja making it possible for many customers to connect with public water and sewerage system. Eteri Harring Head of Treasury and Investor Relations Tel: + 372 6262 225 eteri.harring@tvesi.ee Reigo Marosov Head of Public Relations Tel: + 372 6262 209 reigo.marosov@tvesi.ee