Infratil Limited · NZX:IFT
Infratil — Investor Day (April 2018)
20 slides from Infratil's investor day presentation, Apr 10, 2018
Slide 1: Infratil Investor Day
$Y infratil INVESTOR DAY April 10, 2018 / slongroad 2 ENERGY
Slide 2: Confidentiality
CONFIDENTIALITY The information set forth in this document (including any written materials provided herewith) is proprietary and shall be maintained in strict confidence. Each recipient hereof acknowledges and agrees that the contents of this presentation (i) constitute proprietary and confidential
Slide 3: Intro to Longroad Energy
INTRO TO LONGROAD ENERGY Owners • Focused on US renewables • Founded April 2016 • Funded October 2016 • Business model and strategy focused on three things: – Development LONGROAD ENERGY – Operating Assets PARTNERS, LLC – Services COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 3
Slide 4: Investment Thesis
INVESTMENT THESIS • Significant growth in new plant build (>100 GW wind and solar by 2025) • Deep pool of permanent equity • Development capital more scarce • Operating asset base growing (2023: PV > 120 GW, WIND > 120 GW) • Operating asset turnover constant • Stay close to the assets • Keep it lean
Slide 5: Longroad Today
LONGROAD TODAY Development Operating Assets Services 1,118 MW ~6.7 GW 684 MW 1,236 MW Near Term Owned by LEH Services Development Development Pipeline 884 MW 352 MW 238 MW 880 MW 386 MW 298 MW WIND SOLAR WIND SOLAR WIND SOLAR 74 Employees Development Back-office Services 16 6 52 COPYRIGHT © LONGROAD
Slide 6: US Market Summary
US MARKET SUMMARY Headwinds Neutral Tailwinds • Tax reform • Paris Agreement withdrawal • Continued declining production costs of wind and • Solar trade case • Clean Power Plan revocation solar • Grid resiliency • Coal retirements continuing • Steel and aluminum tariffs • Corporate demand • Municipa
Slide 7: Challenges
CHALLENGES • 35% reduced to 21%, potentially decreasing tax equity Tax Reform supply and challenging economics • Wind hurt more than solar • POTUS decision 1/22/2018 30% import tariff on solar cells and panels Solar Trade • Longroad procured 880 MW of exempt solar panels from Case First Solar to pre
Slide 8: Longroad – 18 Months Ago
LONGROAD – 18 MONTHS AGO Corporate Office COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 8
Slide 9: Vestas PTC Qualified Components
VESTAS PTC QUALIFIED COMPONENTS • Longroad qualified enough components to build out ~600 MW • 100% Production Tax Credit (PTC) value applies so long as operational by end of 2020 • Expect to deploy 238 MW at Rio Wind in near term • Actively developing another 200 MW for 2019 • Remaining components b
Slide 10: Development Pipeline
DEVELOPMENT PIPELINE Seven Bridges 150 MW Phoebe Solar Foxhound Solar 315 MW 100 MW Rio Wind 238 MW As of March 2018/Wind MW in AC and Solar in DC COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 10
Slide 11: Development Margins
DEVELOPMENT MARGINS • Highly dependent on project specifics; very little public disclosure • Key drivers: revenue contract term and credit quality, equipment vendors (Tier 1 vs. others), post-contract revenue assumptions • Levered project returns of 15-20% selling to buyers at 10% could earn develop
Slide 12: Phoebe Solar
PHOEBE SOLAR • 315 MWdc new build solar project in Texas • Financial closing expected 2Q2018 • 12-year revenue agreement in place • Fully-financed with construction and term lenders plus tax equity • EPC and panel supply by First Solar • Commercial operation expected in late 2019 • Longroad likely t
Slide 13: Rio Wind
RIO WIND • 238 MW new build wind project in south Texas • Financial closing expected 2Q2018 • 15-year revenue agreement in place at closing • Fully-financed with construction and term lenders plus tax equity • Vestas turbine technology with EPC by Mortenson • Commercial operation expected in June 20
Slide 14: GE Repowering
GE REPOWERING • Longroad qualified repowering components for ~200 MW GE 1.5 technology • 80% PTC value applies so long as operational by end of 2021 • Ability to raise new tax equity and re-qualify project’s tax benefits • US: 14.5 GW of pre-2011 GE 1.5 technology • Prioritized most executable 1.5 G
Slide 15: Operating Assets and Services = 1,236 MW
OPERATING ASSETS AND SERVICES MN Wind 80 MW Remote Operations Center Portland, Maine Third Party Services Milford Wind + 498 MW wind = 1,236 MW 54 MW solar 306 MW (not shown) Federal Street 298 MW As of March 2018/Wind MW in AC and Solar in DC COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONF
Slide 16: Federal Street Solar
FEDERAL STREET SOLAR • 14 portfolios of operating distributed generation solar projects • 297 MW at 435 individual projects • ~15 years average remaining contracted revenue life • Longroad acquired on balance sheet in 4Q2017 • Recapitalization closed in 1Q2018 resulting in re-cycling of capital and
Slide 17: Minnesota Wind
MINNESOTA WIND • 80 MW operating wind farms • Long term contracts with Xcel Energy • Candidates for repowering using Vestas technology • Investment case: acceptable returns through long term ownership with upside in repowering • Asset management and operations COPYRIGHT © LONGROAD ENERGY HOLDINGS, L
Slide 18: Milford Wind
MILFORD WIND • Two operating wind farms – 306 MW total • Long term contracts with Southern California Public Power Authority • Asset management and operations • Investment case: low purchase price with upside in longer term residual value and expansions COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STR
Slide 19: Longroad Today
LONGROAD TODAY • Flexible source of capital allows diversified approach to market • Significant progress on all three fronts: development, operating assets, and services • Key staff in place • Market continues to grow but not without some hurdles • Well positioned for continued growth through develo
Slide 20: Thank You
ARESETRRE STIR pg as