POLARIS INFRASTRUCTURE INC.TSX : PIF

NOVEMBER 2017WWW.POLARISINFRASTRUCTURE.COM

IMPORTANT NOTICE

This Presentation includes general background information with respect Polaris

Infrastructure Inc. (“Polaris”) and does not purport to be complete. It has been

prepared solely for informational purposes and is not to be considered a solicitation or

an offer to buy or sell any securities and should not be treated as investment advice.

The information contained in this Presentation is confidential and the property of

Polaris. It is made available strictly for the purposes referred to above. This

Presentation must not be disclosed, copied, published, reproduced or distributed in

whole or in part at any time without the prior written consent of Polaris and, by

accepting this Presentation, you agree not to do so. You also agree to return any

written copy of this Presentation to Polaris at the request of Polaris.

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POLARIS

INFRASTRUCTURE

OVERVIEW

SNAPSHOT

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Own and operate San Jacinto Geothermal power plant in Nicaragua

PPA with national grid – contractual price per MWh, with annual

escalator, to 2029

Recapitalized in May 2015

“Fixed” balance sheet

New Management and Board

Cash flow positive; init iated US$0.10 quarterly dividend in Q2 2016;

currently paying U$0.15 quarterly dividend

Strong organic cash flow growth expected in next 12-18 months

CAPITAL MARKETS SNAPSHOT

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* as o f N ovember 24, 2017

S y m b o l : P I F

Price* (C$):

C$17.12

Shares Outstanding (FD):

15.7 mm

Market Cap. (C$):

269 mm

Market Cap (US$):

210 mm

Cash On Hand – Sep 30 (US$):

40.8 mm

Debt – Sep 30 (US$):

173.7 mm

Enterprise Value (US$):

343 mm

Run Rate EBITDA (US$):

~ 50 mm

EV/EBITDA:

~ 6.9x

Quarterly Dividend (US$):

$0.15

IMPROVEMENT IN FINANCIAL METRICS

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Annualized “Run-rate” Results

2 new wells drilled* 2016 reflects annualized results once 2 new wells brought online

RECENT OPERATING RESULTS

USD million Q2/17 Per Share

Q3/17 Per Share

Revenue 15.9 15.3

EBITDA 13.6 12.9

Less:

Interest & Bank Fees

3.9 3.9

Sustaining Capex * 1.3 1.3

Discretionary CF 8.4 US$0.54/ C$0.70

7.7 US$0.49/ C$0.63

Less:

PrincipalRepayment

2.5 2.5

Free Cash Flow 5.9 US$0.38/ C$0.49

5.2 US$0.33/ C$0.43

*As estimated by management, on a long term, average basis.

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Abil i ty to raise

dividend based

on both growth

in cash f low

and/or payout

rat io

Note: Q2 2017

payout rat io

was impacted

by planned

turbine

maintenance

DIVIDEND GROWTH

* Calculated using management's estimated sustaining capital expenditure

SAN JACINTO

GEOTHERMAL PLANT

PROJECT OVERVIEW

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72 MW capacity turbines – both onl ine s ince January 2013

PPA in US$ for up to 72MW net, to 2029

US$123/MWh in 2017 with 3% per annum pr ice escalator for 6 years;

1.5% per annum thereafter ( to 2029)

11 production wel ls with productive capacity of approximately:

500-525 tph of steam and

1,500-1,700 tph of hot brine.

Production wel ls 500m to 2,500m in depth

Current steam can result in power capacity of approx. 60-65 MW

(net of ~5 MW internal consumption)

6 Injection wells re - inject the hot br ine into the reservoir to create

a “closed loop” – renewable energy in l i teral sense

Plant re-certif ied for CO 2 credits - ~250,000 tons per year avai lable

STABLE/GROWING PLANT-LEVEL EBITDA

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* Plant-level EBITDA defined as Revenue less Direct Costs

SAN JACINTO

DRILLING PROGRAM

2017/2018 DRILLING PROGRAM

Three new productions wells

SJ 4-2 – connected in Aug 2017

SJ 12-4 – test ing in Jan 2018

SJ 12-5 – start mid-Nov 2017

One new injection well

SJ 11-2 – connected in Aug 2017

Selected infrastructure investments:

Dri l l ing pads

New separation stat ion

Well connection piping etc.

Total project budget ~$30MM

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Pending

update….

2015/16 DRILLING PROGRAM RESULTS

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NOTE: 2016 reflects contribution from 2 new wells (SJ 9-4 and

SJ 6-3). Results of 2017/2018 Dri l l ing Program are pending.

FUTURE GROWTH

OPTIONS

FUTURE GROWTH OPTIONS

Acquisitions / Project Development

San Jacinto geothermal project

Binary Unit

Carbon Credits

Develop Western Sector

Casita – San Cristobal Geothermal Field

Development Project

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ACQUISITIONS/DEVELOPMENT

Grid in Central America is small/fragmented and has a

signif icant number of renewable projects

Numerous – 25-100 MW projects in the region

Large power companies and infrastructure funds not act ive

Owners are small companies and / or high net worth

individuals

Implication is that:

Good targets for acquisit ions without signif icant competit ion

Much higher IRR projects avai lable to develop (i .e. 12-18%

IRR vs. 8-12% in North America)

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BINARY UNIT

Separate generating unit – generates power from hot geothermal f lu ids (brine) before reinject ing

Low r isk means of generating addit ional power

No exploration risk

Low technical r isk

Competit ive nature of OEM market wi l l result in attract ive pricing

Design f inal ized and EPC quotes received

Total cost of approximately $30 mil l ion

Est imate addit ional 8 – 10 MW

Equates to approx. $6 – 8 mil l ion addit ional cash f low

Approx. 4-5 year payback

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NEAR TERM GROWTH IMPACT

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Polaris has the capital to s ignif icantly grow free cash f low in next

6-24 months

Dri l l ing provides upside …with an outcome most l ikely at the

“midpoint ”…i.e. $7 -8 mil l ion in free cash f low

Increase in Cash Flow (% Increase)

De-bottleneck Line Capacity $1 - 2 mm (3% to 7%)

Two Production Wells $0 - 15 mm (0% to 50%)

Corporate Development or Binary Unit $5 - 9 mm (17% to 30%)

Total (net) $6 - 26 mm (20% to 87%)

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NICARAGUA OVERVIEW

Daniel Ortega President – elected in 2007

▪ Ortega won national election in November 2016 – 5 more years of stability

Highest growth rate and safest country in central America

“Left Leaning ” pol it ical ly but open economical ly

Polaris project is a showcase project for the country

One of the largest fore ign investments in country to date

Renewable energy

World Bank and other g lobal development banks as lenders

RESEARCH ANALYST COVERAGE

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* as of Nov 14, 2017

SAN JACINTO PHOTOS

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