NVE June 2018 Green financing what s next

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1 NVE June 2018 Green financing what s next

2 SEB s footprint in sustainable financing Many wind farms funded to date all over Europe Green bonds & loans for clients Green mortgages for clients SEB green bond (EUR 500m) Microfinancing funds, mutual funds with sustainability profile Advisory ESG integrated in in equity research Only Nordic bank in Dow Jones sustainability index

3 Renewables A selection of recent transactions Egersund Wind Farm MLA, Facility & Security Agent, Hedge Bank Mandated Lead Arranger & Hedge Provider Refinancing MLA, Hedge Bank & Financial Advisor Refinancing MLA, Hedging Coordinator, Facility & Security Agent, Financial Advisor Acquisition financing Småkraft AS MLA, Facility & Security Agent, Hedge Bank Refinancing MLA, Sole Interest Rate & FX Hedging Bank EUR 80m/NOK 76m EUR 914m SEK 2.25bn EUR 228m Jan 2017 Feb 2017 Apr 2017 Mar 2017 Sep 2017 Jan 2016 Hamnefjell Wind Farm Sole Arranger & Lender, M&A Advisor NOK 335m / EUR 32m Jan 2016 Sole Arranger & Lender Refinancing SEK 820m Nov 2016 Senior Lender GBP 1.96bn Sep 2016 Honkajoen Tuulipuisto Ky Sole Arranger & Lender Acquisition Financing Sep 2015 OWP Nordergründe Lead Arranger EUR 290m Jun 2015 Mandated Lead Arranger EUR 1.2bn Aug 2016 Silute Wind Farm Mandated Lead Arranger, Facility & Security Agent Export Financing EUR 91.3m Apr 2015 Småkraft AS Facility & Security Agent, Mandated Lead Arranger Acquisition Financing Dec 2015 Lead Arranger, Interest Rate & FX Hedging Bank GBP 1.2bn Nov 2015 Baltic 2 Mandated Lead Arranger & Hedge Bank Acquisition Financing Oct 2015 Nordic Power AS Sole Arranger & Lender, Hedge Bank Refinancing Aug 2016 Saarenkylä Tuulipuisto Oy Sole Arranger & Lender Mar 2015

4 Return requirement? What would a foreign financial investor require in return for investing in a greenfield Norwegian wind farm today? > 8%? < 8%?

5 Return requirements vary What s the risk? What alternative investments are there?

6 Key risks in wind farm financing Construction risks & project parties Revenues (power & certificates) Volume/production Technology/design life Risk generally reduced over the past years

7 Alternatives macro more uncertain Governments reducing liquidity support Interest rates on its way up? Return on fixed income on its way up?

8 but huge demand driven push for sustainable investments Costs reduced significantly From political to investor/market driven demand Liquidity still plentiful for institutional investors Regulators still supportive even though monetary subsidies is reduced

9 Will costs for debt financing go up or down? Premium pricing for green products? Investor behaviour «Green supporting factor» Project bonds Competition in bank market Economic cycles

10 Summary Investors Plenty of capital to deploy Other fixed income investments might become more interesting again Regulators try to impact investor behaviour Funding Risks in greenfield windfarms reduced Pricing benefits in the future? (green supporting factor, investor behaviour)

11 SEB contact details Johan Persson Head of Structured & Leveraged Finance Norway / Johan.persson@seb.no

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