1

Development & Financing of PV Power Plants & Key Issues in the Off-Grid/

Hybrid Sector

Conergy at a glanceA

Financing of PV Systems & Issues in Hybrid SystemsB

3

Conergy has a wide experience in all downstream sales channels; diversified sales approach is key to balance risks

Conergy‘s downstream business

INDUSTRIAL (free-field)COMMERCIAL (roof-top)RESIDENTIAL

< 50 kWp 1) Large > ~ 200 kWp 1) > ~ 500 kWp 1) Small 50 ~ 200 kWp 1)

Indirect sale to wholesale EPC

(Engineering / procurement / construction of PV installations)

PD, Financing, EPC(Development / financing / EPC of

large PV power plants)

B2B PROJECTS

SA

LE

S C

HA

NN

EL

SM

AR

KE

T S

EG

ME

NT

SA

Source: Conergy 1) Indicative dimensions

Direct sale to installers and sollateurs

4

Conergy has a longstanding experience in Asia and Middle East

Overview of markets in APAC served by Conergy

Source: Conergy

Middle East

Countries with own CGY-entity

Countries with EPC business driven by Singapore

APAC & Middle East markets

REMARKS

Singapore

| Presence in Asia Pacific and Middle East markets since 2005

| Teams with global experience and local knowledge

| Regional Headquarters in Singapore serving surrounding markets – regional engineering center of excellence

| Offices in Australia, India, UAE, Thailand

| Strategic partners in Thailand, Indonesia, Malaysia, the Philippines and Saudi-Arabia

| Market entry in Japan currently in execution – own entity expected in H1/2013

A

5

AConergy offers high-quality solar systems and an all-round carefree service package for all sales channels from a single source

Solutio

Conergy‘s solution portfolio

Based on more than 14 years of solar experience and its in-depth expertise as a former system manufacturer ....

l .... Conergy integrates high-quality components and comprehensive services to all-round carefree solar system solutions

l .... Conergy’s sales force has the expertise in all components, such as modules, inverters, mounting systems, cables and electrical parts

l .... Conergy has the competence to ensure its high quality standards by strict quality management along the entire value chain

SYSTEM COMPETENCE

HIGH YIELD DURABLE SECURE SIMPLESource: Conergy

6

In general, Conergy operates in a proven consortium approach with selected strategic partners

Conergy – Local Partner Consortium

Consortium Member

General role in project

Tasks

Engineering Engineering Procurement ConstructionProcurement

PROJECT ENGINEERING PROJECT MANAGEMENT

• Overall conceptual design• Overall mechanical and electrical

design

• Main components supply

• Commissioning support

• Warranties

• Local civil design• Local mechanical design• Local electrical design

• Local components supply

• Installation • Commissioning

• O&M

A

Local Partner

Conergy at a glanceA

Financing of PV Systems & Issues in Hybrid SystemsB

8

PV Projects have the advantage to be comparable to financial products as they are straight forward on a technological perspective

Main characteristics of PV projects

Reliable

| Technology is simple and passive

| Maintenance is light

| Module life time 25 years

Predictable

| Sunlight is stable through the years

| Energy yield are predictable and Regular

| Output directly linked to quality of modules / inverters

| O&M costs are stable

Safe

| Returns are known well in advance

| Economical reality does not vary too much from simulations

9

Through the eyes of Finance a project is Risk Management

Overview of project development framework

ENVIRONMENT“Framework”

TECHNOLOGY“Know-how”

PLAYERS“human factor”

PROJECT

FINANCE

| Social Need

| Political framework

| Geological conditions

| Yield check

| Technical feasibility

| Technical/site risks

| Promoters

| Technology suppliers

| Investors

| Banks

Land + Rights

Project development

| Mitigate the risks of a project by

| Proper project documentation

| Scenario Analysis

| EPC Guarantees

10

Each partner in a project has a different goal..

EPC Margin (10 to 15%)

Loan Interests (6 to 10%)

Dividends (15%)

Sweat equity/Development Margin (15%)

Annual returns

Annual returns

One shot profits

One shot profits

EACH ACTOR HAS A DIFFERENT EXIT STRATEGY

IN MIND

Project stakeholders and their goals

Project

Project Promoter

Equity Investor

Money lender

EPC contractor

11

Typical Finance Cycle of commercial PV Systems

Exit by trade sale to long term equity investorswith lower IRR expectations (8 to 10%) :| Utilities| Pension funds

Financial close

Preferred exit option

Short term equity investors withEquity IRR expectations around 14% :| Development banks (label+equity)| Hedge/Innovation funds (equity)| Industrial partners (exit strategy offer)

Joint Venture development(SSA, SHA)

Project construction

Exit by sector IPO

Equity Partner search

Promoters+

Initial Investors

Cash bring as Equity Injection into New/future

project pipeline

x

12

| PPAS Capacity of local institutions to honor PPAs

| PPAs duration and renegotiation risk

| Land lease risks

For an investor a bad project is a project showing him shadow areas and risks with no answers, no mitigations …

Overview Project risks

PROJECT INTERNAL RISKSTECHNOLOGY RISK

| Clear shareholding structure of SPV with clear leadership Clear ownership rights

| One Majority shareholder mastering with track record

| Clear exit strategies

| Potential delays in EPC| Previous References project implementation

(Shareholders/EPC) in the country| Degradation factor of modules (generation)

over the years| Efficiency of components (Modules Inverters)| Guarantees on performance/yields| O& M issues

| Political stability and energy framework

| Project geological location| Project administrative environment

PARTNERSHIP RISKENVIRONMENT RISK

13

| Potential delays in EPC| Previous References project implementation

(Shareholders/EPC) in the country| Degradation factor of modules (generation)

over the years| Efficiency of components (Modules Inverters)| Guarantees on performance/yields| O& M issues

| Political stability and energy framework

| Project geological location| Project administrative

environment

| PPAS Capacity of local institutions to honor PPAs

| PPAs duration and renegotiation risk

| Land lease risks

For an investor a bad project is a project showing him shadow areas and risks with no answers, no mitigations …

Overview Project risks

PROJECT INTERNAL RISKSTECHNOLOGY RISK

| Clear shareholding structure of SPV with clear leadership Clear ownership rights

| One Majority shareholder mastering with track record

| Clear exit strategiesPARTNERSHIP RISKENVIRONMENT RISK

14

Overall private sector investments have the opportunity to bring efficiency and competition to the Off-Grid/ Hybrid Sector

Key points of concern for private investors

Some of the concerns can be addressed by the

Government while education play a key role and can be driven by the

private sector

A No sovereign guarantees to counter bankability issue

B Often remote access raises questions on O&M

C Difficulties to pool projects in order to attract equity

D Smaller systems difficult to debt-finance

E Wider span in quality/ reliability compared to PV PP

F Lack of education on RE in Off-grid markets

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