OPTION AGREEMENT

This Agreement has been made on the date set out below between Goran Ernstson,
Skoldungavagen 23 B, SE-131 46 Nacka, Sweden (the "Seller"), and Scandinavian
Energy Finance Limited with address at c/o McCann Fitzgerald, 2 Harbourmaster
Place, International Financial Services Centre, Dublin, Ireland, telefax number
00 353 1 829 0010 (the "Buyer"),

1.       Call Option

1.1      The Seller hereby grants to the Buyer an irrevocable right to
         purchase from the Seller, all shares from time to time held by the
         Seller in Gigantissimo 2321 AB (initially 100,000 shares) (the
         "Company").

1.2      No separate compensation shall be paid for the option granted in this
         Agreement.

2.       Option Period and Exercise of the Option

2.1      If the Buyer  desires to exercise  the option,  he shall  during the
         period  March 7  2002 - 28 February 2027 ("the Option Period") provide
         the Seller with written notice thereof.

2.2      Immediately after receiving written notice as provided for in section
         2.1, the Seller shall notify Lantbrukskredit AB (publ) that the

2.3      The Buyer may  exercise  the  option in whole or in part in one or more
         occasions during the Option Period.

3.       Purchase Price

3.1      The purchase price for the shares purchased by the Buyer under this
         Agreement shall be the aggregate nominal value of the shares.

3.2      The purchase price for the shares shall be paid on Completion upon
         delivery to the Buyer of the share certificates.

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4.       Completion

4.1        Completion shall take place on the 10th business day following the
           exercise of the option pursuant to Section 2. At Completion the
           Seller (i) shall notify Lantbrukskredit that the Buyer has exercised
           the option, (ii) procure that the Board of Directors acknowledge the
           transfer of the Shares and (iii) make a corresponding entry in the
           share register of the Company.

5.       Pledge of Shares

5.1        As security for its obligations under this Agreement, the Seller
           hereby pledges all shares in the Company (initially 100,000 shares)
           owned by it from time to time. The Seller shall deliver the share
           certificates representing the shares, duly endorsed in blank to
           Lantbrukskredit in its capacity as depository. The Seller agrees that
           the Buyer's right to purchase the shares in the Company as provided
           for in this Agreement and the security connected therewith may be
           pledged.

5.2        The Buyer shall have the right to realize the shares pledged pursuant
           to this Section 5 through one or more sales, free from any claim or
           right of any nature whatsoever of the Seller, in any matter permitted
           by law as it deems appropriate and to act generally in such manner as
           the Buyer shall determine. For the avoidance of doubt Chapter 10 of
           the Swedish Commercial Code (Sw. Handelsbalken) shall not apply when
           the Buyer enforces the security constituted hereby.

6.       Restrictions

6.1        During the period up to the end of the Option Period or, if the
           option is wholly exercised before then, until such exercise has
           occurred, the Seller hereby agrees not to cause or permit the Company
           or any of its direct or indirect subsidiaries to take any of the
           following actions;

          a) replace, amend or alter the Articles of Association applicable to
             such company;

          b) issue any  shares,  enter  into or grant  any  options to subscribe
             for  shares or issue any securities convertible into shares or
             entering into any agreement for the same, save for the issuance of
             (i) a convertible debenture of SEK 30 millions to Lansforsakringar,
             (ii) shares corresponding to 5.0 per cent of all outstanding
             shares to Lansforsakringar and (iii) a convertible debenture
             of SEK 470millions to the Buyer;

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         c)  establish any bonus,  profit sharing,  share option or other
             incentive  scheme for any director or employee of the Company or
             any member of the Group (as appropriate);

         d)  sell, transfer or dispose their assets outside the ordinary course
             of business;

         e)  effect a merger with a third party;

         f)  reduce the capital by redemption of shares or any equivalent
             procedure;

         g)  distribute profit by dividends or any other form of shareholder
             benefit;

         h)  voluntarily liquidate or wind-up (except, for the avoidance of
             doubt, any actions and measures taken in connection with mandatory
             liquidation in accordance with the Swedish Companies Act, subject
             to reasonable prior written notice to Lantbrukskredit, SEFL and
             Lansforsakringar);

        i)   change the place of registered office;

        j)   enter into any  agreement  with a director, employee or shareholder
             or an  affiliate of such persons or effect any transaction with
             such persons;

        k)   appropriate fees for the directors or vary the service agreements
             of any directors.

        l)   agree or commit to do any of the foregoing.

6.2      The  provisions  of Section  6.1 shall not  prevent  (i) any actions or
         measures by Ernstson or any Group Company necessary to comply with the
         terms and conditions of Section 5 of the Shareholders Agreement to be
         entered into between Ernstson, SEFL and Lansforsakringar regarding
         their shareholding in the Company so long as such Shareholders
         Agreement is in effect it being understood that it shall terminate
         immediately in the event Lantbrukskredit becomes a shareholder in the
         Company or (ii) any action taken by Ernstson to cause the Company to
         pay Ernstson such amount as is necessary to make Ernstson whole
         (including settlement costs and reasonable legal, accounting and other
         expenses for investigation or defence) on an after tax basis for any
         wealth tax payable by him in connection with his ownership of Shares,
         provided that Ernstson advises Lantbrukskredit, SEFL and
         Lansforsakringar of any such tax assessed and takes any reasonable
         lawful action jointly suggested by Lantbrukskredit, SEFL and
         Lansforsakringar to reduce such tax liability before paying such tax.

7.       Confidentiality

7.1      The parties agree that until the end of the Option Period and for an
         additional period of two years they will not disclose the existence
         of this Agreement nor its content to third parties.

8.        Notices

8.1       Notices shall be given by way of reputable overnight courier or
          telefax to the parties' respective addresses and telefax numbers as
          set out in the preamble or as to an address or telefax number
          announced by any of the parties later.
          A notice shall be deemed to be received by the recipient;

          a) If by courier, when delivered;
          b) If by  telefax,  when  the  telefax  is  sent,  provided  receipt
             is  duly  confirmed by the transmitting telefax machine.

8.2       A notice given in accordance with clause 8.1, but received on a
          non-working day or after business hours in the place of receipt will
          only be deemed to be given at the opening of business on the next
          working day in that place.

8.3       In case of notice to the Buyer, a copy of the notice shall be sent to
          US Energy  Systems,  Inc. ("USE"),  fax number +1 914 993 5190 and EIC
          Partners AG ("EIC"),  fax number +41 1 318 3411
          (until 15 April 2002) and  +41 43 844 10 01 (as of 15 April 2002).

8.4        All notices and communication between the parties shall be in English
           unless otherwise agreed by the parties, USE and EIC.

8.5        Change of address shall be made as set out in clause 8.1.

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9.         Amendments

9.1        Only those amendments and additions to this Agreement that are made
           in writing and signed by the parties are valid.

10.        Assignment

           The Buyer may wholly or partly assign its rights and obligations
           under this Agreement to any third party.

11.        Governing Law and Disputes

11.1       This Agreement shall be construed in accordance with and be governed
           by the laws of Sweden.

11.2       Any dispute,  controversy or claim arising out of or in connection
           with this  Agreement  shall be settled by arbitration in accordance
           with the Rules of the Arbitration Institute of the Stockholm Chamber
           of Commerce. The arbitral tribunal shall consist of three
           arbitrators. The place of arbitration shall be Stockholm, Sweden.
           The language to be used in the arbitral proceedings shall be English.

                            ________________________


This agreement has been executed in two copies of which the parties have taken
one each.


Stockholm, March   , 2002


/s/ Goran Ernston
    ---------------
    GORAN ERNSTSON

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PRESENT when the Common Seal of SCANDINAVIAN ENERGY FINANCE LIMITED was affixed
hereto:





_____________________________________

Director





_____________________________________

Director/Secretary




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