Azure Power Global Limited · OTC:AZREF

Azure Power Global — Investor Presentation (December 2020)

45 slides from Azure Power Global's investor presentation, December 2020

  1. Slide 1: Investor Presentation December 2020

    7 GW+ Pan India Portfolio of Solar Assets India’s First Private Grid Connected MW Solar Plant Issued India’s First Solar Green Bond Investor Presentation December, 2020 0|Copyright © 2020 Azure Power |www.azurepower.com

  2. Slide 2: Disclaimer

    Disclaimer Forward-Looking Statements This information contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, including statements regarding our future financial and operating guidance, op

  3. Slide 3: Executive Summary

    Executive Summary 2 | Copyright © 2020 Azure Power | www.azurepower.com

  4. Slide 4: Market Opportunity

    Market Opportunity India’s 450GW Renewable Energy Capacity Electricity Usage per Capita (MWh) (2) Solar is the Lowest Cost Source of Power (3) Addition Roadmap (1) 450 13.0 US: ~11x > India Tariff (INR/kWh) China: ~4x > India CAGR: 28% INR/kWh 4.9 100 2.99 2.00 2.56 38 1.2 4 2015 Sept'2020 2022E 203

  5. Slide 5: Management Commitment to Capital Discipline

    Management Commitment to Capital Discipline Capital discipline is the foundation to our success 1 2 3 4 5 Delivery of Enhance returns on Optimize capital Risk mitigated If returns on future projects on time and invested capital with structure to lower risk approach to new growth do not meet on budge

  6. Slide 6: Azure Power Overview (AZRE: NYSE)

    Azure Power Overview (AZRE: NYSE) One of the Largest Solar portfolios in India Operational Under Construction Committed(1) 7,115 MW (1) 1,834 MW 1,281 MW 4,000 MW Utility-Scale Projects | 6,948 MWs Azure Roof Power | 167MWs Awan |Punjab| India’s First Private MW scale Solar Plant Gandhinagar | India

  7. Slide 7: 7,115 MW Committed Portfolio, 1,834 MWs Operational

    7,115(1) MW Committed Portfolio, 1,834 MWs Operational ~90%(2) in High ~6%(2) in Mid Focus on Strong Counterparty Credit Irradiation Zone Irradiation Zone Rajasthan (3,675 MW) Punjab (214 MW) ~95% of the portfolio 214 MW BBB- & above is Investment Grade(4) 475 MW 95% 3200 MW Uttar Pradesh (100 MW) 1

  8. Slide 8: Visible Historical and Future Growth

    Visible Historical and Future Growth Growing Portfolio with Strong Contracts in Place Substantial Revenue Growth to Portfolio Revenue Run-Rate(1) 7,800 $705 4,000 7,115 Revenues (US $ Million) 6,500 5,200 Committed MWs 3,900 1,281 2,600 1,834 $193 Under Construction $172 1,300 $112 $144 $44 $61 Oper

  9. Slide 9: Projects Under Construction Update

    Projects Under Construction Update Rajasthan Rajasthan 6 - 600 MWs Rajasthan 8 - 300 MWs PPA Revised Q1 CY’21 (300 MWs COD expected • Q2 CY’21 Q3 CY’21 COD by Dec) Financing 100% Near complete Under Construction Operating Land 100% 100% Transmission ~90% complete; Work on transmission in process Con

  10. Slide 10: Projects Under Construction Update

    Projects Under Construction Update Assam Rajasthan Rajasthan 9 - 300 MWs Assam - 90 MWs Revised 25 MWs Commissioned • Q2 CY’21 August 2020; Q3 CY’21 PPA COD 40 MWs Q1 CY’21, 25 MWs 3Q’ CY21(1) Financing Nearly complete Completed Under Construction Land ~85% Operating Land in place for ~85 MWs Constr

  11. Slide 11: 4 GW Project Win Is Significantly Value Accretive

    4 GW Project Win Is Significantly Value Accretive Present Value of Equity for 4 GW Win(2) Tariff ~15% $1,000 higher (USD Mn) Potential of $800 than similar Opportunity around 6.0x $600 SECI central for 20%+ EV/EBITDA $400 PV of Equity Value grid connected equity IRRs build cost $200 auctions we $- h

  12. Slide 12: Long Term Outlook

    Long Term Outlook MWs Operational Guidance Gross Margin(2), Cash Flow to Equity for MWs Operating Assets(3) and Debt Forecast 8,000 7,000 6,000 CAGR USD Millions Gross Margin: $575 - $675 5,000 30% $700 4,000 CAGR 3,000 $600 40% 2,000 1,000 $500 - Gross Margin: FY'17(a) FY'18(a) FY'19(a) FY'21(a) FY

  13. Slide 13: Recent Sustainability Disclosure Reaping Rewards

    Recent Sustainability Disclosure Reaping Rewards Highlights  Avoided 7.8 mn tons of CO2 equivalents since inception (1) Top 10 Global Renewable  40% saving last year in water consumption per unit of electricity generated (2) Energy Company for Sustainability  Aim to become water neutral by 2023 E

  14. Slide 14: Corporate Social Responsibility Programmes

    Corporate Social Responsibility Programmes Promoting livelihood enhancement by providing Donation of modified wheelchair and two Promoting education by providing smart class in skill development across 7 sites in Gujarat wheelers to the disabled army veterans Government schools across multiple state

  15. Slide 15: Strong Governance and Disclosure Standards

    Strong Governance and Disclosure Standards Only Indian Solar Independent Power Producer listed on NYSE Standards reinforced by listing requirements Strong Corporate Governance Home country SEC & NYSE SGX-ST requirements that requirements regulatory also require regular requiring periodic requirement

  16. Slide 16: Experienced Board Backed by Long Term Marquee Shareholders

    Experienced Board Backed by Long Term Marquee Shareholders IFC Global Infrastructure Fund  Increased stake in Azure Power to c.50.4% through multiple rounds & open market purchase  Made its first investment in company in 2010 and increased stake through multiple rounds with current  2nd largest C

  17. Slide 17: Industry Overview

    Industry Overview 16|Copyright © 2020 Azure Power |www.azurepower.com

  18. Slide 18: Industry and Regulatory Update

    Industry and Regulatory Update Industry Update Regulatory Update • India’s power supply remains in a deficit at 0.3% for the first half of • Basic Custom Duty (BCD) – The current expectation is that a 10 - FY’21. 20% BCD will be imposed, which will be in addition to the SGD, although there has not b

  19. Slide 19: The Solar Advantage in India

    The Solar Advantage in India Electricity Usage per Capita (MWh) 12.8 US: ~11x > India Azure’s solar plants have ~100 mn people without high availability Seasonal Energy direct power source Curve Summer Monsoon China: ~4x > India 4.3 India-Demand Peak Low 0.9 Solar-Generation Peak Low USA China India

  20. Slide 20: Operating and Financial Metrics

    Operating and Financial Metrics 19|Copyright © 2020 Azure Power |www.azurepower.com

  21. Slide 21: 2Q FY'21 Key Performance Metrics

    2Q FY’21 Key Performance Metrics 1,834 MW Operating 7,115 MW Operating & US$ 0.45m Project US$ 14.5m Q2 CFe from 2% increase Committed (1) Cost/MW (DC) Operating Assets 111% increase 2% increase(2)(3) 50% increase(2) • 36 MW (116 MW DC) commissioned • 1,281 MWs are under construction • DC cost per M

  22. Slide 22: Review of Q2 FY'21 Results

    Review of Q2 FY’21 Results Reported Reported Reported 2Q FY’21 After % Change Adjustments* (in million) 2Q FY’20 2Q FY’21 2Q FY’21 Adjustments Adjusted Q2FY’21 vs Comments US$ INR INR US$ US$ Q2FY’20 2,847 3,504 47.6 - 47.6 23% 5% increase in operational DC MWs. Additional revenue of Revenue $2.2 mi

  23. Slide 23: Operating Assets Review: EBITDA, CFe, & Leverage

    Operating Assets Review: EBITDA, CFe, & Leverage 50% growth in CFe from Operating Assets YoY EBITDA from Operating CFe from Operating Assets Assets (in US$ Mn) (in US$ Mn) $14.5 Positive Drivers: $40.7 • Revenues: +$8.9 million +50% • Lower Debt Amortization: +$2.2 million $9.7 +20% Partly offset by

  24. Slide 24: Balance Sheet Highlights

    Balance Sheet Highlights As at March 31, As at September 30, 2020 2020 (in million) (in million) INR INR US$## Cash, Cash Equivalents and Current Investments* 9,792 7,828 106.4 Property, Plant & Equipment, Net 95,993 103,712 1,410.3 Net Debt# 73,806 79,721 1,084.0 Hedging Asset (net) 6,266 5,290 71.

  25. Slide 25: DSO by Counterparty

    DSO by Counterparty Amounts in US$ million On time/ Past due Project Net Within Past due up DSO Customer Name Capacity (MWs) more than 365 Name Receivables grace to one year days (2) days period(1) _ _ SECI , NTPC, NVVN 689 11.4 11.4 54 AP-1 Southern Power Distribution Com of AP Ltd 50 10.6 1.0 5.1

  26. Slide 26: FY'21 Guidance

    FY’21 Guidance 2,300 – 2,500 MWs INR 15,300 – 15,800 million(1) Operating by March 31, of Revenue for FY’21 2021 3Q FY’21 Revenue: INR 3,600 – 3,800 million Q3 FY’21 PLF 19.5%- 20.5% _________________________ 1) US$ 208- 212 Mn (at September 30, 2020 exchange rate- INR73.54 to US$1) 25

  27. Slide 27: Appendix

    Appendix 26|Copyright © 2020 Azure Power |www.azurepower.com

  28. Slide 28: Historical Plant Load Factor; Annual, Quarterly and 3Q FY'21 Forecast

    Historical Plant Load Factor (PLF); Annual, Quarterly and 3Q FY’21 Forecast 24.0% 23.0% 22.7% 22.3% 22.0% 21.5% 21.0% Annual PLF 20.5% FY'20 19.5% 20.0% 19.5% – 20.5% PLF FY'19 18.6% 19.4% 3Q FY’21 forecast FY'18 18.2% 19.0% 18.8% 17.9% 18.0% 17.0% 17.7% 16.4% 16.0% 16.8% 15.0% 1Q 2Q 3Q 4Q FY'19a FY

  29. Slide 29: Historical Plant Load Factor; Green Bonds Performance

    Historical Plant Load Factor (PLF); Green Bonds Performance PLF: Azure Power Energy Limited PLF: Azure Power Solar Energy Private Limited 22.0% 27.0% 26.3% 21.0% 21.0% 25.5% 25.0% 20.0% 20.1% 20.0% 23.0% 22.7% 19.0% 21.0% 21.0% 18.0% 17.3% 20.1% 19.0% 17.0% 17.0% 17.0% 16.0% 15.9% 16.6% 15.0% 15.0%

  30. Slide 30: Use of Non-GAAP Financial Measures: EBITDA

    Use of Non-GAAP Financial Measures: EBITDA Adjusted EBITDA is a non-GAAP financial measure. We present Adjusted EBITDA as a supplemental measure of its performance. This measurement is not recognized in accordance with USGAAP GAAP and should not be viewed as an alternative to USGAAP GAAP measures of

  31. Slide 31: Reconciliation of Non-GAAP Measures to Comparable GAAP measures

    Reconciliation of Non-GAAP Measures to Comparable GAAP measures Quarter Ended September 30, Six Month Ended September 30, (in million) (in million) 2019 2020 2020 2019 2020 2020 INR INR US$ INR INR US$ Net loss (756) (368) (5.0) (585) (322) (4.5) Income tax expense/ (benefit) 27 (97) (1.3) 171 220 3

  32. Slide 32: Use of Non-GAAP Financial Measures

    Use of Non-GAAP Financial Measures Adjusted EBITDA is a non-GAAP financial measure. The Company presents Adjusted EBITDA as a supplemental measure of its performance. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance

  33. Slide 33: Cash Flow to Equity (CFe)

    Cash Flow to Equity (CFe) For the quarter ended For the quarter ended September 30, 2019 September 30, 2020 (US $ million) Operating Others Total Operating Others Total Sale of power 38.7 - 38.7 47.6 - 47.6 Cost of operations 3.4 - 3.4 4.2 - 4.2 General and administrative 1.3 5.7 7.0 2.7 9.2 11.9 Ad

  34. Slide 34: Cash Flow to Equity (CFe) – Contd.

    Cash Flow to Equity (CFe) – Contd. (1) Items from the Statement of Cash Flows. Other items include: loss on disposal of property plant and equipment of Nil, share based compensation of US$ 0.3 million and US$ 7.2 million, realized gain on investment of Nil, non-cash rent expense of US$ 0.6 million a

  35. Slide 35: Cash Flow to Equity (CFe)

    Cash Flow to Equity (CFe) Six Months ended Six Months ended September 30, 2019 September 30, 2020 (US $ million) Operating Others Total Operating Others Total Sale of power 84.8 - 84.8 101.2 - 101.2 Cost of operations 7.5 - 7.5 7.8 - 7.8 General and administrative 5.9 8.5 14.4 4.4 12.7 17.1 Adjusted

  36. Slide 36: Cash Flow to Equity (CFe) – Contd.

    Cash Flow to Equity (CFe) – Contd. (1) Items from the Statement of Cash Flows. Other items include: loss on disposal of property plant and equipment of Nil and US$ 0.1 million, share based compensation of US$ 0.5 million and US$ 8.1 million, realized gain on investment of 0.1 million and Nil, non-ca

  37. Slide 37: Projects Commissioned - Utility

    Projects Commissioned - Utility As on September 30, 2020 Commercial Duration PPA Capacity DC Capacity Tariff Project Names Operation Off taker of PPA in Credit Ratings (MW) (MW) (INR/kWh) Date(1) Years Operational – Utility Punjab 1 (3) Q4 2009 2 2 17.91 NTPC Vidyut Vyapar Nigam Limited 25 AAA Punja

  38. Slide 38: Projects Commissioned– Utility and C&I

    Projects Commissioned– Utility and C&I As on September 30, 2020 Commercial PPA Duration DC Capacity Tariff Project Names Operation Capacity Off taker of PPA in Credit Ratings (MW) (INR/kWh) Date(1) (MW) Years Operational – Utility North & South Bihar Power Distribution Company Bihar 1 (3) Q3 2016 10

  39. Slide 39: Under Construction Projects –Utility and C&I

    Under Construction Projects –Utility and C&I As on September 30, 2020 Duration Expected Commercial PPA Capacity Tariff Credit Project Names Off taker of PPA in Operation Date(1) (MW) (INR/kWh) Ratings Years Under Construction Assam 1 Q1– Q3 2021 65 3.34 Assam Power Distribution Company 25 B+ Rajasth

  40. Slide 40: Debt Overview

    Debt Overview As of September 30, 2020 Maturity Profile (1,2,3) $500 $467.5 $465.1 $400 $300 $200 $83.1 $88.7 $100 $62.7 $23.5 $0 FY'21 FY'22 FY'23 FY'24 FY'25 - 29 FY'30 & Beyond Debt Split by Currency LT vs ST Debt Split INR Debt Foreign Debt Short Term Debt Long Term Debt 271.0 , Consolidated Deb

  41. Slide 41: Project Debt Schedule

    Project Debt Schedule As of September 30, 2020 Outstanding Principal Amount (In millions) Type of Interest Currency Maturity Date(1) Commissioned/ Name of Project INR US$ (2) Under construction Rajasthan 6 2,659 36.2 Fixed US$ 2021 Under construction Andhra Pradesh 1 2,508 34.1 Fixed INR 2022 Commis

  42. Slide 42: Project Debt Schedule

    Project Debt Schedule As of September 30, 2020 Outstanding Principal Amount (In thousands) Type of Interest Currency Maturity Date(1) Commissioned/ Name of Project Under construction INR US$ (5) Punjab 3.1 and 3.2 1,219 16.6 Fixed INR 2024 Commissioned Chhattisgarh 1.1,1.2 & 1.3 1,256 17.1 Floating

  43. Slide 43: Glossary of Select Terms

    Glossary of Select Terms Accelerated Depreciation – Accelerated depreciation can be elected at the project level, such that projects that reach COD in the first half of the fiscal year can expense 100% of eligible project costs in year 1, and otherwise can expense 50% of project costs in year 1 and

  44. Slide 44: Investor Contact / Media Contact

    Investor Contact Media Contact Nathan Judge, CFA Samitla Subba ir@azurepower.com pr@azurepower.com +1 (917) 209-6750 +91-11- 4940 9854 +91-99-1065 6148 43

  45. Slide 45: Affordable Solar Power for Generations

    Affordable Solar Power for Generations Excellence | Honesty | Social Responsibility | Entrepreneurship 44|Copyright © 2020 Azure Power |www.azurepower.com

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