GCP Asset Backed Income Fund Ltd. · LSE:GABI
GCP Asset Backed Income Fund — GCP Infrastructure Investments — Corporate Update (November 2024)
39 slides from GCP Asset Backed Income Fund's corporate update, Nov 12, 2024
Slide 1: Investor Site Visit - Inchdairnie Renewable Energy
GCP INFRASTRUCTURE INVESTMENTS LIMITED INVESTOR SITE VISIT - INCHDAIRNIE RENEWABLE ENERGY 12th November 2024 ‘Authorised and regulated by thé Financial Conduct Authority Gravis (a=)
Slide 2: Presenters
PRESENTERS Phil Kent Director, CEO Phil joined Gravis in 2015 and serves as the CEO. Phil is actively involved in the management of Gravis’ direct infrastructure and real asset investments. Phil has 20-years of experience in the energy and environmental sectors having joined Gravis from Foresight Gr
Slide 3: Agenda
AGENDA GCP Infrastructure Investments Ltd — Investor Site Visit, 12% November 2024 10:30 Arrival and breakfast served 10:45 GCP Infra presentation and market background 11:15 Site induction and health & safety presentation 11:30 Asset tour 12:20 Inchdairnie Renewable Energy presentation 12:50 Inchda
Slide 4: Introduction
INTRODUCTION Gravis
Slide 5: GCP Infrastructure Investments Limited
GCP INFRASTRUCTURE INVESTMENTS LIMITED Invests in UK infrastructure that benefits from public-sector backed cash flows, with a focus on debt. Initial Offering Net Asset Value Investments Constituent of Market Cap the FTSE 250 since July 2015 £696m £987m 22 July 2010 £934m Note(s):1As at 30 June 2024
Slide 6: GCP Infrastructure Investments Limited - Objectives
GCP INFRASTRUCTURE INVESTMENTS LIMITED - OBJECTIVES The Company primarily invests in UK infrastructure debt and/or similar assets to meet the following key objectives. £ Income Pays an attractive risk- adjusted income and has done for 14 years Diversification Diversified across a range of different
Slide 7: Portfolio Overview
PORTFOLIO OVERVIEW A mature, diverse and operational portfolio of UK infrastructure projects that is well positioned to benefit from the macro trends of population dynamics, decarbonisation and energy security. Supported Living Healthcare Biomass (domestic) Geothermal Education Electric vehicles Gas
Slide 8: Portfolio Overview (cont.)
PORTFOLIO OVERVIEW (CONT.) A mature, diverse and operational portfolio of UK infrastructure projects that is well positioned to benefit from the macro trends of population dynamics, decarbonisation and energy security. Portfolio by income type ( Portfolio by annualised yield Portfolio concentration
Slide 9: GCP Infrastructure - First Mover Advantage
GCP INFRASTRUCTURE — FIRST MOVER ADVANTAGE With a changing landscape of government support over the last 14 years, the Company has retained an entrepreneurial appr: identifying new investments. © 2010: The first UK Infrastructure debt focused investment trust in the UK "2 2011: Domestic rooftop sola
Slide 10: Tackling the Discount: Capital Allocation Policy
TACKLING THE DISCOUNT: CAPITAL ALLOCATION POLICY The Company announced its £150m capital allocation policy for the year last December, laying out three key priorities. Capital Allocation Targets + Refinance of RCF completed in March Reduce leverage * Reducing total commitments (£190m to £150m) Undra
Slide 11: Peer Group Universe - A Diverse Landscape
PEER GROUP UNIVERSE — A DIVERSE LANDSCAPE GCP Infrastructure Investments provides exposure to a diversified portfolio which is differentiated from its peers, with a repositioning expected over time. Economic Infrastructure Environmental Infrastructure Social Infrastructure Infrastructure Debt Listed
Slide 12: Regular, Sustained, Long-Term Income
REGULAR, SUSTAINED, LONG-TERM INCOME GCP Infra has consistently paid a strong dividend to shareholders since IPO, regardless of market conditions, with availability-based infrastructure not as sensitive to GDP or wider macro-environment. At current trading levels this represents a c. 8.9% dividend y
Slide 13: Attractive Valuation Levels
ATTRACTIVE VALUATION LEVELS GCP Infra continues to trade at a significant discount to prevailing NAV, representing an attractive entry point. Steadily performing portfolio benefitting from subsidy-backed cashflows and a significant element of inflation protection. GCPIIL Share Price / NAV - Since IP
Slide 14: The Opportunity
THE OPPORTUNITY Falling interest Labour Government Resolution of rates supportive of infrastructure Cost Disclosure Attractive entry Sustained, long-term Disciplined capital Operational point income allocation portfolio Note(s): 'Discount to NAV as at 30 September 2024. 2Vield on share price as at 3
Slide 15: Overview of Anaerobic Digestion
OVERVIEW OF ANAEROBIC DIGESTION Simplified process . yo VY Gas Grass and Rye Ns Vas NEN silage a=) Heat Consumer Anaerobic wus > Digester Do ON > Oi Pot Ale and Draff Digestate Biofertiliser Note: Gravis analysis, GCP INFRA
Slide 16: Overview of Anaerobic Digestion
OVERVIEW OF ANAEROBIC DIGESTION AD is the production of energy from the decomposition of organic matter in the absence of oxygen. Solid digestate Liquid RHI (biogas combustion) Digestate Heat to tanks | Biogas RO / Feed-in-tariff Electricity (parasitic) Electricity Biomethane. i i RO / Feed-in-tarif
Slide 17: Overview of Anaerobic Digestion
OVERVIEW OF ANAEROBIC DIGESTION AD is the production of energy from the decomposition of organic matter in the absence of oxygen. Feedstock Liquid Solid Digestate digestate Heat to tanks Electricity (parasitic) Heat Electricity Biomethane. lan Green Food grade hydrogen CO, y cm sate GCP INFRA 7
Slide 18: Impact
Impact uolyeonpy eyseM euns|eq S1BOY}E8H || | A A A Bua peyioddns || y | || | y SO/DIYSA 914}09|3 || || A | VW Buryead seg, | | || wi 4 a JewsayjosD | || V | | A uosebiq oiqoseeuy ssewoig O4pAH Jejog fersusvoyeun || | | || A Likelihood | | High Market risks Credit risks Legal / regulatory Operationa
Slide 19: UK Subsidy Regimes - The Journey
UK SUBSIDY REGIMES -— THE JOURNEY Public sector support has changed significantly in the last 50 years. The RHI regime that supports Inchdairnie was closed to new plants in 2022. 1980s ey Privatisation of utilities 1990s Evolution of support as policy needs shift GCP INFRA 2000s 2 2020s Fi Monopoly
Slide 20: UK Biomethane Sector - Supply
UK BIOMETHANE SECTOR — SUPPLY The UK currently produces c. 6.4 TWh of biomethane. Net Zero requires a 3.5x increase in installed capacity, with barriers existing to support such deployment. and Scottish biome Future target 3.5 -5.0x ne installed capa: 119 UK 630 UK AD Project ~ 3% of projects louise
Slide 21: Inchdairnie Renewable Energy - Overview
INCHDAIRNIE RENEWABLE ENERGY - OVERVIEW Gravis
Slide 22: GCP Programme Funding Ltd Series
GCP PROGRAMME FUNDING 1 LTD SERIES 3 A portfolio of three strategically located, operational, gas-to-grid anaerobic digestion (AD) projects: Savock Renewable Energy, Stracathro Renewable Energy and Inchdairnie Renewable Energy. a! tS == Eastern trunk road S&S Operational Portfolio of three 550-600 m
Slide 23: Inchdairnie Renewable Energy
INCHDAIRNIE RENEWABLE ENERGY me + Provided senior funding for construction of the plant in 2017, taking full ownership in 2020. + Accredited under the Renewable Heat Incentive (RHI) & Renewable Obligation (RO) 31 000 3 subsidies to 2036 providing long-term, inflation-linked cashflows. Tonnes of soli
Slide 24: Inchdairnie Renewable Energy - Timeline
INCHDAIRNIE RENEWABLE ENERGY - TIMELINE + The project experienced some delays to construction leading to a shortfall against financial close forecasts. + In 2019, the construction contractor, Qila, entered administration. + Gravis assumed ownership and full operational control in 2020. Subsequent in
Slide 25: Savock is a sister plant to Inchdairnie
* Savockis a sister plant to Inchdairnie, located in Foveran approximately 15 miles north of Aberdeen. * Whilst the plants differ in their layout, Savockis the same production design as Inchdairnie with 4 tanks and is fed with 30,000 tonnes of energy crop feedstocks with pot ale and draff to be intr
Slide 26: Inchdairnie Renewable Energy - Original Investment Case
INCHDAIRNIE RENEWABLE ENERGY - ORIGINAL INVESTMENT CASE Original financing structure Project finance security structure including; fixed and floating charges, share charges, direct agreements and assignments, TEEN Biogas. Share Charge 9 noo Cn (Ultimate Parent) Share Charge re 100% ISC Share Charge
Slide 27: Inchdairnie Renewable Energy - Updated Structure
INCHDAIRNIE RENEWABLE ENERGY — UPDATED STRUCTURE Current financing structure GCP Intermediary Holdings Ltd 100% GCP Infrastructure GCP Programme Investments Ltd Loan Notes Funding 1 Ltd 100% GCP Biogas 2 Ltd Ownership changes In February 2020, GCP Programme Funding 1 Ltd exercised its security under
Slide 28: Sources and Uses: Construction Phase
INCHDAIRNIE RENEWABLE ENERGY - SOURCES AND USES: CONSTRUCTION PHASE Sources (£000) Uses (£000) Initial Equity 5,651 Construction costs 10,777 Senior debt 6,307 Fees 210 Pre-funding DSRA — Mezz 121 Pre-funding DSRA — Senior Debt A 847 Funded senior debt service 3 Total sources 11,958 Total uses 11,95
Slide 29: Project Due Diligence Structure
INCHDAIRNIE RENEWABLE ENERGY — PROJECT DUE DILIGENCE STRUCTURE Advisor Equity / Project SPV Q ADDLESHAW Legal (incl. property) J GODDARD . + x Technical Atlanticbiogas ee aardvark a Griffiths Insurance Munich RE Armour Finance / tax / model audit % PKF KPMG. AURSRA &) AFRY Market report GCP INFRA Ke
Slide 30: Project Current Contract Structure
INCHDAIRNIE — PROJECT CURRENT CONTRACT STRUCTURE Party Role / Contract Feedstock Supplier & Inchdairnie AD Feedstock Operator i al Atlantic Biogas Sees OEM Operations & Project monetised through Maintenance contractual links with third parties al Pentair, Thyson, 2G > Ofgem Subsidy Payer Sustainabil
Slide 31: Inchdairnie - Income
INCHDAIRNIE — INCOME Revenue breakdown Key Details ™ Gas Sales Renewable Heat Incentive 5,000 REGOs 4500 | is 4,000 = np wm mm 3,500 3,000 fo) 8 2,500 a 2,000 | 1,500 | HEEdg | 1,000 500 ™ Renewable Obligation = Green Gas Certificates 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
Slide 32: Inchdairnie - Forecast Cash Flows
INCHDAIRNIE - FORECAST CASH FLOWS Forecast project cash flows over life Key Details 6,000 + 80% plant availability; 5,000 * Gas sales price based on forward pricing 4,000 plus AFRY Q3 2024 (Central) forecast; 3,000 + Average Feedstock cost of £42.58 / 2,000 tonne; 8 1,000 * O&M contracts £660k p.a;
Slide 33: Lessons Learned
LESSONS LEARNED Issues Faced Learnings GCP INFRA Experienced delays during ramp-up as part of the commissioning process. = Biogas upgrade unit; = Power cuts; = Ramp-up and commissioning programme. Greater oversight from independent Technical Advisor. More robust incentive / penalty structure under t
Slide 34: Future Optimisations
FUTURE OPTIMISATIONS Located on the Eastern trunk road in Scotland, the plant is strategically positioned for meeting future sustainable transport fuel requirements, and access to the Scottish Cluster Carbon Capture and Storage projects. * Planning granted for CO, capture. * Sale to food & beverage
Slide 35: Biomethane is a Growth Sector
BIOMETHANE IS A GROWTH SECTOR The forecast growth of biomethane is supported by its versatility across end-uses. Biomass feedstocks and end use sectors! iomethane end uses + Asadirect substitute for natural gas, biomethane is highly versatile across a range of hard UCO, tallow, brown grease and micr
Slide 36: Q&A
Q&A Gravis 36
Slide 37: Important Notice
IMPORTANT NOTICE Warning This presentation (the "Presentation") has been prepared by Gravis Capital Management Limited (the "Investment Adviser" or “Gravis") andis for information purposes only. This Presentation is not intended for distribution to, or use by, any person or entity in any jurisdictio
Slide 38: Contact Information
Gravis Capital Management Limited 24 Savile Row London WIS 2ES www.graviscapital.com CONTACT INFORMATION Philip Kent philip.kent@graviscapital.com 020 3405 8512 Jonathan Feely jonathan.feely@graviscapital.com 020 3405 8569 Cameron Gardner cameron.gardner@graviscapital.com 020 3405 8555 Jacob Kett ja
Slide 39: Gravis
Gravis INVESTMENT IDEAS FOR THE LONG RUN
GCP Infrastructure Investments — Corporate Update (November 2024) on 6ix