Roadshow Presentation

Transcription

1 Roadshow Presentation April 2010 Tonbridge Power Inc. The Waterpark Place 20 Bay Street, 11 th Floor Toronto, ON t: f:

2 Disclaimer This presentation and the preliminary prospectus, including the documents incorporated therein by reference (the Prospectus ) filed by Tonbridge Power Inc. (the Corporation ) dated December 11, 2009, contain forward-looking information under Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the completion of the development and construction by the Corporation of the Tonbridge Power Line and the timetable, costs and financing of the Tonbridge Power Line, demand for transmission capacity, supply of transmission capacity, the benefits of the Tonbridge Power Line and any future projects, including Project 2 (as defined in this presentation), currency fluctuations, requirements for additional capital, and government regulation of transmission operations, including the auctioning of capacity and the permitting required for the Tonbridge Power Line and future projects, including Project 2. Generally, forward-looking information can be identified by the use of forward-looking terminology such as plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate, or believes, or variations of such words and phrases or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Forward-looking information is based on the opinions and estimates of management as of the date such statements are made and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could case actual events to differ materially from those projected in the forward-looking information. Many of these assumptions are based on factors and events that are not within the control of the Corporation and there is no assurance that they will prove to be correct. Estimates with respect to the timetable for and completion of the Tonbridge Power Line and any future projects, including Project 2, required government and regulatory approvals for the Tonbridge Power Line and any future projects, including Project 2, the ability to generate revenue, the thermal capacity of the Tonbridge Power Line, the ability to exploit certain operating margins, the reorganization of the electricity industry, future interest rates, capital resources available, the availability of credit-worthy electrical shippers, the use of certain technologies and materials and annual impairment tests, are based on such things as research by the Corporation of capital and operating costs, contracts signed by the Corporation to date, recent estimates of construction and costs, construction estimates and schedules which have been developed by the Corporation s personnel and independent consultants and reports from counterparties and electrical shippers. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed under the headings Risk Factors in the Company s Prospectus, the Annual Information Form dated April 27, 2009 and the MD&A, all of which are available under the profile of the Company on SEDAR, and elsewhere in documents filed fromtime to time with the Canadian provincial securities regulators. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Corporation to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks related to judicial proceedings, land assembly, technology and materials, wind firming, capital resources, revenue, operating margins, litigation risk, restructuring of electrical industry, competition, annual impairment tests, labour relations, insurance, damage from weather and other disasters, operating and maintenance risks, environmental risks, hazards of high-voltage electricity transmission, counterparty and credit risk, financing arrangements, and other risks relating to the Offering. Although management of the Corporation has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Corporation does not undertake to update any forward-looking information, except in accordance with applicable securities laws. 2

3 Energy. Energy. Energy. Wind Solar Biogas Geothermal Hydro 3

4 Ideal scenario Generation Transmission Consumption 4

5 Unbalanced delivery New / Remote Generation No New Transmission Capability More Consumption 5

6 Major hurdle NIMBYISM year infrastructure deficit 6

7 Nimbyism has a price Constant Congestion Higher electricity cost Less stable grid Less renewable generation 7

8 8 8 Independent Transmission Developers

9 Powerful opportunity Connecting the Alberta/US grid Generation World-Class Wind Resource in Montana Gap No Interconnect between Alberta and U.S. Demand Alberta: deregulation U.S. Northwest: insufficient RPS capacity Alberta CANADA U.S. Montana 9

10 MATL: The route Lethbridge CANADA UNITED STATES Cut Bank 345 km 230 kv 300 MW Northbound 300 MW Southbound Great Falls 10

11 MATL: The progress Lethbridge Fully permitted CANADA UNITED STATES Cut Bank Fully sold Fully funded Great Falls 11

12 MATL: Fully permitted Pre-permit stage Permits required Fully Permitted Other independent transmission developers and Alberta Energy & Utilities Board (AEUB) National Energy Board (NEB) Montana Dept. of Environmental Quality (MDEQ) Utilities US Dept. of Energy (DOE) Federal Energy Regulatory Commission (FERC) Western Electricity Coordinating Council (WECC) 12

13 MATL: Fully sold 25-Year Take/Pay (5-Year Option) Average $5.00/MWh 2.5% annual escalator Lethbridge CANADA Invenergy 180MW NaturEner 300MW Northbound UNITED STATES Cut Bank Southbound Wind Hunter WAPA 70MW 50MW Blowup of Map w/ MATL line 300MW 13 Great Falls

14 MATL: Fully funded Construction funding: $161 Million WAPA Regions (WAPA) Sierra Nevada Region CRSP Management Center Upper Great Plains Desert Southwest Region Rocky Mountain Region 14

15 MATL: Great project economics 25-Year Take/Pay (5-Year Option) Average $5.00/MWh 2.5% annual escalator $25M revenues 10-year fixed price operating and maintenance contract $22M EBITDA 15

16 MATL: Project timeline Milestone 0% 25% 50% 75% 100% Target Completion Major Permits 2008 Compeletion of Final Design Transmission Q2 10 Substations Q2 10 Ordering of major equipment Q2 10 Pole insertion & construction Transmission Q2 11 Substations Q2 11 System commissioning & line in service Q

17 17 17 Tonbridge Growth Strategy

18 Project pipeline Project Size (MW) Prospect and Feasibility Development and Permitting Finance Construct Operate MATL Upgrade 250 each north & south Green Line each north & south 18

19 MATL upgrade: Being built now 650 MW cable cross-section Lethbridge 100 MW Efficiency Buffer CANADA UNITED STATES Cut Bank MATL 300 MW Great Falls 250 MW Proposed Upgrade 19

20 MATL upgrade: Attractive economics MATL 300 MW $15 - $20 Million capital Regulatory approval Phase shifting transformer MATL UPGRADE 550 MW 20

21 Green line: The route British Columbia Washington Montana Alberta Connecting Montana s wind resource to the Mid-C Hub Mid-Columbia Hub Idaho MATL Colstrip transmission line 500kV Proposed route to Garrison Proposed route to Townsend Garrison interconnect Townsend interconnect 21

22 Green line: Anchor tenant strategy 1,000 MW cable capacity Anchor Tenant: Gaelectric North America Inc. & Invenergy LLC 500MW 350MW 500 MW Take/Pay contract Shares in development cost Receives future transmission credit 100 MW efficiency buffer Unallocated capacity 50 MW OASIS auction 13% Return on Asset 22

23 Green line: Anchor Tenants Gaelectric North America Inc. Focused on assembling large wind power projects in high wind resource areas and supporting grid expansion to deliver power to growing loads and green power markets Part of the Gaelectric group of companies, each active in different fields of renewable power generation and energy storage Invenergy Wind Development LLC Focused on development, ownership, operation and management of large-scale wind energy generation assets in North America and Europe Invenergy companies have approx. 2,000 MW of wind projects in operation or construction Affiliate of Chicago-based Invenergy Wind LLC 23

24 Green line: Timeline Lethbridge Feasibility study 2010 CANADA UNITED STATES Cut Bank Regulatory approval Notice to proceed 15 to 24 months 2012 Great Falls Construction 9 to 15 months Commercial operations

25 Tonbridge Power: Strong outlook PROJECT Economics TARGET DATE PROGRESS MATL $22 million EBITDA 2011 under construction MATL Upgrade TBD 2013 Green Line 13% ROA 2013 being built now only ~$15 million investment development risk shared by shippers Long-term + Fixed Rate Contracts = Growing + Predictable Cash Flows 25

26 Appendix: Corporate overview TSX-V symbol: TBZ Price: (04/08/10) $2.40 Market cap: Shares outstanding: Issued: Fully diluted: $85.7 M 35.7 M 41.1 M Working Capital: ($2.1 M) Cash & cash equivalents: LT debt: $1.2 M $38.1 M 26

27 Appendix: Management Johan van t Hof, CA Chief Executive Officer & Director 18 years project finance experience in the power industry as the project finance partner at PriceWaterhouseCoopers (PWC) head of electricity division; Responsible for development/financing of over 25 infrastructure projects worldwide Robert van Beers COO & Director Over 25 years of experience in global power sector strategy and organizational restructuring as the Head of North American Strategy at PWC and the Head of the Energy Department at Charles River; Involved in all stages of developing power projects including engineering, regulatory permitting, feasibility studies Caren Narvet, CGA Chief Financial Officer, Regulatory & Reporting 15 years of experience in finance, senior commercial banking with Bank of Montreal Robert McFarlane Chief Business Officer, Head of Capital Markets & Corporate Communications 10 years of experience in energy finance while at CIBC Debt Capital Markets; Involved with a cross section of projects in recent years including Equador Wind Power Project in Loja with Villonaco Wind Power SA; 54MW Wind Project with Manitoulin Power LLP; Portland Connecticut Gas Pipeline Disposition David Axford Senior Vice President, Project Development Over 25 years of experience in the chemicals and power industries in Alberta, Ontario and Dubai 27

28 Appendix: Independent Directors of the Board John Etchart Chairman Former Chair of Northwest Power Planning Council; Former advisor to Montana Governor Racicot Jeff Myers Director President of Pristine Power; Former President Westcoast Power David Matheson, QC Director Special counsel at McMillan Binch John Wiebe, PhD Director President of Globe Foundation of Canada; Regional Head of Environment Canada Walter Pollock Director Former Chief Transmission Officer, Bonneville Power Administration 28