Kenon Holdings Ltd. · NYSE:KEN
Kenon — Merger or Acquisition (September 2020)
30 slides from Kenon's merger presentation, Sep 29, 2020
Slide 1: OPC Acquisition of CPV
OPC Acquisition of CPVSeptember 2020 ENERGY
Slide 2: Disclaimer
2 Receipt of the information delivered or to be delivered to you by OPC Energy Ltd. ("OPC" or the "Company") is subject to the following: This presentation is intended for the provision of concise and non-comprehensive information for the sake of convenience solely. You are hereby referred to the fu
Slide 3: CPV Overview and Investment Highlights
3 CPV Overview Assets Development Management CPV Investment Highlights CPV Commercial Structure 70% Integrated Platform operating assets, strong pipeline, execution capabilities Strong Management Team Industry leading management team with expertise across all key power market disciplines, developmen
Slide 4: U.S. Renewable Landscape
4 U.S. Renewable Landscape Government Regulation Renewables shift aided through Federal / State policies:RPS: state legislation with renewable targets was enacted in 29 statesRGGI: localized carbon pricing, mainly in the North East, provides an additional catalyst for renewables US Election Impact R
Slide 5: Large, Well Progressed Renewable Pipeline
5 Large, Well Progressed Renewable Pipeline CPV has a proven track record as a renewable developer with 4.8 GW of wind generation through U.S.Renewable development pipeline:Advanced-Stage - 1.1 GWPV – 895 MWWind – 250 MWEarly-Stage – 1.1 GW (PV) CPV Renewable Development Overview Project Technology
Slide 6: High Efficiency CCGT Opportunities
6 High Efficiency CCGT Opportunities Shale gas revolution has led to large scale coal retirementContinued Coal Retirement will require base load additions through highly efficient CCGTS Industry in Transition 247 Facilities closed since 2011Primarily environmentally-driven retirements 330 Facilities
Slide 7: CPV's Thermal Pipeline
7 CPV’s Thermal Pipeline Project Capacity (MW) Market Thermal Asset 1 635 PJM Thermal Asset 2 620 MISO Thermal Asset 3 1,350 ERCOT Thermal Asset 4 1,350 PJM Total Thermal Pipeline 3,955 CPV Thermal Pipeline Locations ERCOT MISO PJM CPV has a robust pipeline of CCGT projects at various stages of deve
Slide 8: Three Rivers – Thermal Development Case Study
8 Three Rivers – Thermal Development Case Study 1,258 MW CCGT in PJM-COMEDTotal Construction and financing costs of $1.3bFinancial Closing Achieved in August 2020, 14 lenders for total amount of $750M senior + $125M facilitiesCPV to maintain at least 10% and manage asset Financial Close & Constructi
Slide 9: Proven Development Platform
9 Proven Development Platform ~4.2x Development Return Multiple Over the Course of Development Period In US$ millions 2010-2020, In US$ millions Average Proceeds Received: $68 million 2010-2020 Cumulative GW Developed Cumulative Capital Invested & Returned Development Company Performance (Proceeds R
Slide 10: Attractive Operating Portfolio Overview
10 Attractive Operating Portfolio Overview Acquisition of new, state of the art assets at discount to construction cost Significant upside potential as markets recover, enactment of favorable emission regulation and accelerated retirements of coal and old gas generating assets CPV owns an efficient
Slide 11: Clean, Efficient, State-of-the-Art Operating Fleet
11 Clean, efficient, state-of-the-art operating fleet in diverse, attractive regions of the U.S.Total operating portfolio of 1,397 MWThree Rivers adds up to 220 MW of generation capacity CPVAsset Overview 2020 Capacity Additions (MW) by Year (Pro-Rata for Stake) Project Technology Market MW COD Stak
Slide 12: Highly Experienced Management Team
12 Highly Experienced Management Team Top tier management team Equity and Stakeholder Relationships Integrated Capabilities Significant experience in the sector with over 100 years combined experienceLead members working together at CPV more than 10 yearsCommercial capabilities across hedge products
Slide 13: Leading Asset Management Business
13 Leading Asset Management Business DRIVES SYNERGIES ACROSS CPV’S BUSINESS Cumulative Assets Managed (% by MW) Cumulative Assets Managed (GW) Overview CPV is a proven platform to manage portfolios in all major markets, across various fuel types and technologies10.6 GW of assets currently under mana
Slide 14: Creating a Company of Significant Scale
14 Creating a Company of Significant Scale First Israeli IPP with leading presence Diversified USA presence with a renewable platform for expansion ~2,800MW in operation by 2023 ~7,500MW additional pipeline 1 2 3 3 4 1. OPC’s operational capacity and generation assumes Rotem at 80% stake2. CPV’s cap
Slide 15: CPV Financials
15 CPV Financials Historical Financials (Proportionate Consolidation)1 1. Proportionate consolidation (based on equity ownership) of all the operating assets. Non-GAAP presentation as this reflects a proportional consolidation of the equity method investments and corresponding eliminations2. 2018 EB
Slide 16: Transaction Financing and Capital Raise
16 Transaction Financing and Capital Raise Funding Sources (NIS) OPC Portion (70%) Internal sources Bond 1,960m 280m 250m Remaining Funding (Acquisition & Development) 330m Private placement (Clal & Phoenix) 350m Kenon order in public offering 350m Total Sources (including projects under development
Slide 17: Transaction Timing and Next Steps
17 Transaction Timing and Next Steps Sep 15 Term Sheet signed – exclusivity period of 30 days granted October 1-8 Bond Issuance October 15 SPA signing target Q2 2021 Closing target
Slide 18: Appendix
18 Appendix
Slide 19: U.S. Power Market Overview
19 U.S. Power Market Overview World’s largest energy market (>1,000 GW) Fragmented and only partially deregulatedThermal generation still dominates, providing more than 60% of energy produced during 2019Limited renewable energy penetration to-date (<20% energy generation in 2019) but coal and old-ga
Slide 20: Main CPV Power Markets
20 Main CPV Power Markets Installed Capacity by fuel Installed Capacity by fuel Installed Capacity by fuel PJM States 13 Residents ~65 million Installed Capacity 198 GW Power Plants 1,373 Peak Demand (All Times – 2011) 148 GW Total Generation (2019) 829 TWh Transmission System 100,000 miles NYISO St
Slide 21: PJM PV Development Project Case Study
21 PJM PV Development Project Case Study Off-take Strategy & Details: Capacity - will be sold to PJM Energy - 10-12 year virtual PPA with Fortune 50 C&I customer (shortlisted) SREC - Executed SREC PPA with Oil giant, locks in ~40% of revenue requirement for the projectSignificant economies of scale
Slide 22: CPV Operating Assets Enjoy Competitive Position in Attractive Markets
22 CPV Operating Assets Enjoy Competitive Position in Attractive Markets NYISO Asset(s) Valley (720 MW) Capacity Advantage Premium capacity zone in the Lower Hudson Valley; stands to benefit further from the planned retirement of 2 GW Indian Point (IP) nuclear facility Energy Advantage Margin protec
Slide 23: Keenan II Overview
23 Keenan II Overview – 152 MW Wind Farm Fully contracted, with 100% of energy and environmental attributes purchased by OG&E under a 20-year Wind Energy Purchase Agreement (WEPA) through December 2030Proven, reliable operation evidenced by its 9+ years of operating historyProven performance level s
Slide 24: Shore Overview
24 Shore Overview – 725 MW CCGT Well-positioned on the PJM dispatch curve due to its fuel efficiency and low variable cost of operation, and with consistently superior operating metrics relative to other CCGTs in PJMShore’s 6,698 Btu/kWh full base load heat rate is significantly advantaged relative
Slide 25: St. Charles Overview
25 St. Charles Overview – 754 MW CCGT At a 6,856 Btu / kWh heat rate, St. Charles is the most efficient thermal power plant in the densely populated PJM-PEPCO zone, providing substantial opportunity to generate attractive energy marginsDirect connection to the highly liquid Transco interstate gas pi
Slide 26: Towantic Overview
26 Towantic Overview – 805 MW CCGT Capacity price is locked-in at $9.55/kW-mo, escalating annually, providing an attractive stream of known cash flows through May 2025Towantic has the lowest heat rate in ISO-NE and it is located in a load pocket with premium nodal energy pricesDual-fuel capability a
Slide 27: Valley Overview
27 Valley Overview – 720 MW CCGT Strategically located in an area with extremely high barriers to entry for any new natural gas power plantStands to benefit significantly in terms of capacity and energy prices upon the planned retirement of the 2 GW Indian Point nuclear facilityAdvantaged access to
Slide 28: Fairview Overview
28 Fairview Overview – 1,050 MW CCGT Surrounded by significant natural gas and NGL production, Fairview’s strategic location in the heart of the Marcellus formation avoids costly long-haul pipeline contractsInterconnected to the premium PJM-MAAC capacity regionAbility to burn low cost ethane with th
Slide 29: Three Rivers Overview
29 Three Rivers Overview – 1,258 MW CCGT Interconnected to the premium PJM-COMED capacity region$90/MW-day average premium to RTO over last 3 yearsShare of contribution margins composed of capacity revenues is projected to fluctuate between 40-50% through the 2020s and early 2030s, with ComEd cleari
Slide 30: Thank You
Thank You Giora Almogy, C.E.O., OPC+972-54-801-0400Gioraa@opc-energy.com WWW.OPC-ENERGY.COM Tzahi Goshen, C.F.O., OPC+972-54-950-3888Tzahig@opc-energy.com Shay Perets, IR, OPC+972-54-740-5544Shay.Perets@opc-energy.com ENERGY Guy Maor, Business Development Director, OPC+972-52-608-4722Guym@opc-energy
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