RWE AG Opernplatz 1 D - 45128 Essen Germany Strictly private and confidential Innogy Holdings plc Windmill Hill Business Park Swindon Wiltshire SN5 6PB For the attention of: Brian Count 21st March 2002 Dear Sirs, Proposed recommended cash offer for...

                                                                  Exhibit (d)(1)

                                     RWE AG
                                  Xxxxxxxxxx 0
                                 X - 00000 Xxxxx
                                     Xxxxxxx

Strictly private and confidential

Innogy Holdings plc
Windmill Hill Business Park
Swindon
Wiltshire
SN5 6PB

For the attention of: Xxxxx Xxxxx

21st March 2002



Dear Sirs,


Proposed recommended cash offer for Innogy Holdings plc ("Innogy") to be made by
Xxxxxxx Xxxxx (outside the US) on behalf of a subsidiary of RWE AG ("RWE") (the
"Offer")

This letter agreement sets out the circumstances in and terms on which Innogy
and RWE have agreed to pay to the other a fee in connection with the Offer.

1    Innogy agrees to pay to RWE an inducement fee of (pound)20 million if the
     Offer lapses or is withdrawn following a competing offer being announced,
     and such competing offer becomes or is declared unconditional in all
     respects.

2    Subject to Clause 3 below, RWE agrees to pay to Innogy an inducement fee of
     (pound)20m if the Offer does not become or is not declared unconditional in
     all respects as a result of condition (b), (c), (d) or (e) in Appendix 1 of
     our joint press release to be dated 22 March 2002 not being satisfied
     because of a relevant action. For this purpose a "relevant action" is the
     acquisition by RWE or a subsidiary of RWE (RWE Group) of electricity or gas
     related assets in the EU or the US, the entry by the RWE Group into a
     contract to make such an acquisition, after the date of this letter or a
     failure by RWE to either submit the relevant regulatory filings or use all
     reasonable endeavours to satisfy such conditions.

3    RWE's obligation under Clause 2 above shall not apply if a higher competing
     offer has been announced for Innogy which constitutes an offer within the
     meaning of the City Code.

4    This letter agreement shall be legally binding and shall be governed by and
     construed in accordance with the laws of England.



Yours sincerely

Xx. XXXXXXX XXXXX        Dr. XXXXXXX XXXXX
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for and on behalf of RWE AG



Agreed and accepted

XXXX XXXXXX
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for and on behalf of Innogy Holdings plc




Date 22nd March, 2002
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