Infratil Limited · NZX:IFT
Infratil — Longroad Energy — Investor Day (April 2019)
27 slides from Infratil's investor day presentation, Apr 10, 2019
Slide 1: Investor Day
INVESTOR DAY Longroad Energy April 10, 2019
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: Agenda
AGENDA • Introduction • Development Company • Operating Company • Services Company • Wrap-Up and Questions COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 3
Slide 4: Longroad Refresher
LONGROAD REFRESHER • Focused on North American renewables (excluding residential) • Founded April 2016 and funded October 2016 Ownership • Flexible business model and capital focused on LONGROAD three segments: ENERGY PARTNERS – Development 20% 40% 40% – Operating Assets – Services • Pre-Longroad Tr
Slide 5: Longroad: A Solid Start
LONGROAD: A SOLID START Solid growth inception to 2019 growth plan in motion today Up to 800 MW of new development deals 1.2 GW acquired and developed ~$100 mm Longroad cash and LCs 1.4 GW services under contract Requiring $2 B of third party capital ~$2 B third party capital raised to date Further
Slide 6: Business Model and Segments
BUSINESS MODEL AND SEGMENTS • Develop and/or acquire and • Higher risk, higher return control high quality assets; DevCo opportunities optimize balance between hold and monetize • O&M, asset management, Flexible and remote operations • Acquire operating assets Capital • Adds value to asset buyers an
Slide 7: High Velocity Development Capital
HIGH VELOCITY DEVELOPMENT CAPITAL Cash Facility + Credit Facility LC capacity returned Return of Cost of capital capital and profits to shareholders, $150 net of write- mm $100 offs and mm overhead Commitments Cash Spend • Pre-financial close • Costs and • Development • PPA/interconnections Fees • O
Slide 8: Investment Thesis: "Wall" of Capital
INVESTMENT THESIS: “WALL” OF CAPITAL Pension Funds & Insurance Private Equity & Infrastructure Funds Strategic Acquirers COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 8
Slide 9: Investment Thesis: Scale
INVESTMENT THESIS: SCALE Utility Scale • New wind build 2021- 2030 = ~28 GW • New solar build 2021- 2030 = ~41 GW • ~ $60 B investment opportunity • Driven by retirements COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 9
Slide 10: Investment Thesis: 5 Years of Growth
INVESTMENT THESIS: 5 YEARS OF GROWTH US Renewable Market Size Near Term Opportunity Set (to 2023) • > 100 GW expected new build • > $85 B investment opportunity • Results in > 250 GW total installed capacity by end of 2023 • 2-4% market share = Longroad success COPYRIGHT © LONGROAD ENERGY HOLDINGS,
Slide 11: Key Driver: State Level Demand
KEY DRIVER: STATE LEVEL DEMAND Source: EQ Research COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 11
Slide 12: Key Driver: Corporate PPA Demand
KEY DRIVER: CORPORATE PPA DEMAND 2018 Summary of 2018 Corporate PPAs • 57 deals • 70% wind, 30% solar Deal Size (MW) • 42% first time buyers • 58% repeat buyers • 13 deals in TX • 13 in SPP • ~50% broker driven Source: Schneider Electric COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTI
Slide 13: Performance to Date: OpCo & DevCo
PERFORMANCE TO DATE: OPCO & DEVCO Longroad: MW Acquired and Developed 1400 553 Project MW Status 1200 Federal Street Solar 299 Retained 1000 +81% YOY MN Wind 80 Retained 800 685 Milford Wind 306 Retained 600 Rio Wind 238 Sold 400 Phoebe Solar 315 Sold 200 Total 1,238 0 2016 2017 2018 Federal Street
Slide 14: Retained Assets: 685 MW
RETAINED ASSETS: 685 MW Milford Wind Minnesota Wind 306 MW 80 MW • Buy and hold • Buy and hold • Attractive service • Option to repower contract for Longroad • Long term option value given location Federal Street (Solar) 299 MW • Buy and hold • Optionality in lessor buyouts and recapitalizations COP
Slide 15: DevCo Assets: 553 MW
DEVCO ASSETS: 553 MW Rio Wind (Texas) Phoebe Solar (Texas) 238 MW 315 MWdc • LEH developed, financed, •LEH developed, financed, and sold; also providing and sold at FNTP; also construction management providing construction • LES to provide O&M, AM, management and ROC services • Project costs $307 mm
Slide 16: 2019 DevCo Assets: 800 MW
2019 DEVCO ASSETS: 800 MW MN Wind Repower Foxhound Solar 70 MW 108 MWdc • Lincoln and Pipestone • Halifax County, VA Counties, MN • FNTP Q4 2019 • FNTP Q3 2019 • COD Q4 2020 • COD Q3 2020 Prospero Prospero I Solar I Solar El Campo Wind 379379 MWMW dc dc 243 MW • Andrews • Andrews County, County, TX
Slide 17: Expected Performance: OpCo & DevCo
EXPECTED PERFORMANCE: OPCO & DEVCO Longroad: MW Acquired and Developed 2,500 EOY 2019 Total > 2.0 GW Foxhound Solar • Objective to achieve 2,000 MN Wind financial closing on four El Campo Wind additional development +45% YOY 1,500 deals (800 MW) Prospero I Solar – Development and 1,000 timing risk r
Slide 18: Wind Safe Harbor Strategy
WIND SAFE HARBOR STRATEGY • Rio Wind – 238 MW – FNTP Q2 2018 $44 mm safe – COD Q2 2019 harbor • El Campo investment Catalyzed > $75~95 mm – 242 MW in Vestas gross profit plus capital – FNTP Q2 2019 (est.) components return ($44 mm) – COD Q2 2020 (est.) (December 2016) • MN Wind (Repower) – 70 MW – F
Slide 19: Comprehensive End to End Services
COMPREHENSIVE END TO END SERVICES Asset Balance of Plant 24/7/365 & End-to-end platform and Management Services Analytics internal capabilities designed • Commercial • Total project • 24/7/365 remote to maximize long-term asset optimization and value creation oversight monitoring, including performa
Slide 20: Performance to Date: Services
PERFORMANCE TO DATE: SERVICES MW Under Contract ~1.5 GW in 1,600 2 years • Longroad Energy Services 1,400 Third Party Third Party Wind (Rio) • 1,476 MW to EOY 2018 1,200 Solar 1,000 Third Party – 685 MW Longroad owned Wind 800 – 791 MW third party 600 Longroad Owned – Milford Wind 400 Longroad Owned
Slide 21: Expected Performance: Services
EXPECTED PERFORMANCE: SERVICES MW Under Contract 2,000 Total 1.7 GW EOY 2019 1,800 +8% YOY 1,600 (Advanced Third Party • 256 MW new growth in Discussions) Wind Third Party advanced discussions 1,400 Solar 1,200 – Project sales could 1,000 bring further growth 800 – Pursuit of other third 600 party b
Slide 22: Performance to Date: Capital Raising
PERFORMANCE TO DATE: CAPITAL RAISING Lenders Third Party Capital Raising Inception to 3/31/2019 Tax Equity ($ mm) 1,800 1,600 1,400 1,200 1,000 800 1,702 M&A 600 400 200 307 - Debt, Tax Equity, M&A LCs COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 22
Slide 23: Performance to Date: Financial
PERFORMANCE TO DATE: FINANCIAL $77 mm realized profit Net $76 mm invested in the business Realized profit Capital invested Capital returned Note: Excludes LES COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 23
Slide 24: Expected Performance: Financial
EXPECTED PERFORMANCE: FINANCIAL Unrealized >$200 mm of realized plus Projected profit on unrealized 2019 cumulative portfolio - High profit Realized (3/31/2019) Projected profit on Unrealized 2019 profit on portfolio - closed deals Projected Low Unrealized - High Projected capital profit on capital
Slide 25: Post 2019
POST 2019 Growth expected to • Well positioned with our solar pipeline (> 7 GW) remain, especially in solar • Evaluating panel supply and safe harbor options out to 2023 similar to wind • Insolated Longroad from near term tariff and trade Tariffs and Trade Disputes dispute exposure through commitmen
Slide 26: Wrap Up
WRAP UP • Real momentum and traction with solid deal flow, DevCo growth, and attractive returns Flexible Capital • Provides incremental • Continual flow of M&A growth and adds scale to opportunities plus OpCo Services the overall business and is improving the financial an important strategic and tec
Slide 27: Thank You
THANK YOU