Investing in solar power in emerging markets Raymond Carlsen, CEO January 2015
An Independent Solar Power Producer Solid track record Project track record of close to 400 MW, retained ownership to 219 MW Financing secured for additional 214 MW to be realized in 2015 Focus on utility scale solar plants Early mover in selected emerging markets Integrated across the downstream value chain Generating solid margins through project development and construction Retaining ownership to assets yielding predictable long-term cash flows Strong partnerships in project development, financing and equity investments Strong growth ambitions Aim to realize gross 750 MW of solar power plants by the end of 2016 Key facts Key facts Established: 2001 Headquarter: Oslo Established: 2001 Main Headquarter: shareholders: Scatec* Oslo62.5 %, Itochu 37.5 % Employees: 88 Main shareholders: Scatec 29% Itochu 22% Power plants (ownership) Others 49% Employees: ~ 100 Power plants (ownership) Czech Republic (100%): 20 MW Kalkbult, RSA (39%): 75 MW Key financial highlights Secured Linde, revenue RSA backlog (39%): of more than 40 NOK MW15bn Dreunberg, RSA (39%): 75 MW ASYV, Rwanda (57%) 9 MW
South Africa a break through for Scatec Solar Kalkbult, RSA Dreunberg, RSA Capacity 75 MW Capacity 75 MW Annual production 150,000 MWh Annual production 178,000 MWh Linde, RSA Capacity 40 MW Annual production 94,000 MWh Solar power plants started production in 2013 and 2014 3
South Africa - focus on economic development Economic development of rural areas is a critical part of the renewables program; ED commitments and strategy over 20 years are made as part of the extensive bid documents 30% weighting Main sources of economic benefit for South Africa Job creation both directly through construction and operation jobs, and indirectly through high local content targets Socio-economic development (SED) contributions directly from project revenues (0.8 1.1%) Direct project ownership by local communities (8% 17%), dividends managed by community trusts Total community contributions from SED and project ownership total NOK 1.2 billion over a 20 year period; a significant contribution to the scarcely populated regions Specialist advisors engaged to manage the program on behalf of the power plant shareholders A development plan is defined based on input from local communities and NGOs 4
Rwanda first utility scale solar plant in East Africa ASYV Installed capacity: 8.6 MW Total investment: $24 million Project financing: $20 million Completed: Q3 2014 Partners: 5
Jordan excellent conditions for solar Three projects Installed capacity: 43 MW Total investment: $135 million Project financing: $100 million To be completed: 2H 2015 Partners: 6
Latin America - very promising opportunities Agua Fria, Honduras Installed capacity: 60 MW Total investment: $125 million Project financing: $90 million To be completed: 2H 2015 Partners: 7
Key success factors in emerging markets Scatec Solar is leveraging multi-functional teams and strong partnerships Financial Debt and equity structuring Working capital management Local/regional power market insights Solar impact on the power markets Grid interconnection Government relations Operational Plant optimisation Maintenance Commercial/legal Power Purchase agreements Contract/SPV structuring Tax optimisation Technical Engineering and design Component technology Construction management Component sourcing Cost and progress management Page 8
Norfund & IFC partnerships Norfund partnership: Project development and investment partnerships in various regions (70% Scatec Solar / 30% Norfund) Norfund co-investing in South Africa, Rwanda and Honduras IFC partnership: Development and financing partner in selected countries in West Africa Key benefits: Access to lower cost of capital Expanded network for project origination Risk mitigation representing the Norwegian government and the World Bank 9
Norway - promoting investments in renewables MT5 NOKUS - taxation Most countries support investments in renewables and tax incentives are common Norwegian companies have to pay NOKUS-tax equal to the tax incentive benefit. In practice this is reversed development aid Norway is one of only four countries world wide that tax active investments through NOKUS Debt capital Debt financing for renewables projects in developing countries can be challenging, both with regards to availability, cost and tenor GIEK and Export Credit Norway main task is to support Norwegian export: Support to renewables now in mandate letter to GIEK What is Norwegian interests? Expand scope from traditional export content definition Expand mandate to provide loan guarantees in developing countries Expand mandate to a accept local banks as co-guarantors 10
Lysbilde 10 MT5 Mikkel Tørud; 12.01.2015
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