Scatec Asa · OSL:SCATC
Scatec Asa — Scatec Solar — Investor Day (May 2016)
96 slides from Scatec Asa's investor day presentation, May 31, 2016
Slide 1: Scatec Solar Capital Markets Day
Scatec Solar Capital Markets Day Oslo, May 31, 2016 Our values Predictable Driving results Changemakers Working together
Slide 2: Disclaimer
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not rely, act or make assessment on the basis of this presentation or anything inc
Slide 3: Agenda for the day
Agenda for the day TIME TOPIC SPEAKER 1. Introduction Raymond Carlsen, CEO 08.30 – 09.30 2. Markets and opportunities Terje Osmundsen, SVP Break 3. Project development Terje Pilskog, EVP 09.45 – 10.45 4. Solutions Pål Helsing, EVP Break 11.00 – 12.00 5. Power Production and O&M Torstein Berntsen, EV
Slide 4: Speakers
Speakers Mr. Carlsen joined Scatec Solar in 2009 from Aker ASA, where he was responsible for the Raymond Carlsen, development of the company’s portfolio of energy related businesses. He has more than 20 CEO years of industrial experience from management positions. Mr. Osmundsen joined Scatec Solar i
Slide 5: 1. Introduction
1. Introduction Raymond Carlsen, CEO Our values Predictable Driving results Changemakers Working together
Slide 6: Generating and capturing PV value in emerging markets
Generating and capturing PV value in emerging markets Fully integrated business model 1 tailored for emerging markets NYTT BILDE Strong global demand for PV 2 accelerates growth in opportunities Excellent track record in capturing 3 value from complex PV projects Solid asset base and a significant 4
Slide 7: A solid track record of developing and building PV
A solid track record of developing and building PV 383 MW in operation: Czech Kalkbult Dreunberg Linde ASYV Agua Fria Red Hills 20 MW 75 MW 75 MW 40 MW 9 MW 60 MW 104 MW Czech Republic South Africa South Africa South Africa Rwanda Honduras USA Installation track record (MW): 602 • 15 years of experi
Slide 8: SSO strategy evolving with shifting industry dynamics
SSO strategy evolving with shifting industry dynamics Scatec has evolved and continues to adapt to market and industry dynamics Build asset portfolio, diversify Further strategic Initiation* From EPC provider to integrated IPP and enhance value considerations • Three times • Retained ownership of po
Slide 9: Cost reductions drive strong demand growth
Cost reductions drive strong demand growth Total system cost (USD / Watt) * Annual installed volume - GW Other Balance of plant Module Rest of world China Japan Installation Inverter India USA Europe -67% 3,24 83.6 68.2 1,80 45.0 1,49 1,21 30.7 1,07 18.3 2010 2012 2014 2016 2018 2010 2012 2014 2016
Slide 10: Integrated Independent Power Producer
Integrated Independent Power Producer Scatec Solar develops, builds, owns & operates solar plants for 20 years Power Production Origination Development Structuring Delivery Phases O&M • Opportunity • Pipeline • Backlog • Construction • Operation • Analysis & • Site control • Equity, debt • Procureme
Slide 11: The integrated model captures the full project value
The integrated model captures the full project value Project development & construction: • Provides access to attractive project pipeline • Generates D&C margins that can be reinvested as equity in projects Long term asset ownership: • Generates steady long term cash flows • Eliminates ‘friction los
Slide 12: Integration key to assessing new opportunities
Integration key to assessing new opportunities • With small integrated teams we Project assessment using SSO competencies: can assess new project opportunities effectively EPC CSR Asset Management • Key questions: Can we apply our business model, meet our Finance The project opportunity Operation fi
Slide 13: A truly sustainable business model
A truly sustainable business model • Solar plants embedded in local communities in emerging economies for 20-25 years • Economic activity is of vital importance to both countries and communities • Local suppliers, local employees and good relations with local communities impact performance, cost and
Slide 14: A history of profitable growth
A history of profitable growth Consolidated financials, NOK million Cash flow to SSO equity, NOK million Revenues 881 Development & Construction Operations & Maintenance EBITDA Corporate Power production Net profit 698 240 471 208 179 76 293 24 10 129 136 131 87 49 -35 -22 -17 -8 2013 2014 2015 2014
Slide 15: Strong project pipeline in attractive markets
Strong project pipeline in attractive markets Regions 2,426 Americas, Africa, Asia, MENA MW >50% Regions Pipeline Assessed as having more 1,056 Americas, East and West Africa, South Africa, Egypt, than 50% MW Pakistan likelihood of being realized >90% Regions Backlog Assessed as having more than 90%
Slide 16: Outlook and targets
Outlook and targets MW in production and under construction Average 15% gross margin from Development In operation In operation and under construction and Construction 1,400-1,600 Target average equity IRR of 15% nominal after tax on power plant investments 750-900 550-600 2016 cash flow to SSO equi
Slide 17: Strong growth in power production
Strong growth in power production • Power production set to reach more than 3 TWh per year with current growth targets • Contract length of 20 to 25 years GWh New opportunities 5,000 60% of current pipeline Backlog (422 MW) 4,500 In operation & under construction (426 MW) 4,000 3,500 Production leve
Slide 18: 2. Market and opportunities
2. Market and opportunities Terje Osmundsen, SVP Our values Predictable Driving results Changemakers Working together 18
Slide 19: Introduction
Introduction • Scatec Solar - a track record as early mover: • South Africa (from 2010) • Mali (from 2011) • Jordan (from 2012) • Egypt (from 2014) • Developed a holistic skill-set and capabilities particularly competitive in emerging markets • Globally, numerous emerging markets ready to embrace PV
Slide 20: Developing opportunities in a fully integrated model
Developing opportunities in a fully integrated model Power Production Origination Development Structuring Delivery Phases O&M • Opportunity • Pipeline • Backlog • Construction • Operation • Analysis & • Site control • Equity, debt • Procurement • Operation & Intelligence • PPA and support structurin
Slide 21: Impressive cost reductions drive strong demand growth
Impressive cost reductions drive strong demand growth Total system cost (USD / Watt) * Annual installed volume - GW Other Balance of plant Module Rest of world China Japan Installation Inverter India USA Europe -67% 3,24 83.6 68.2 1,80 45.0 1,49 1,21 30.7 1,07 18.3 2010 2012 2014 2016 2018 2010 2012
Slide 22: Large-scale solar - a major part of the market
Large-scale solar - a major part of the market PV installation per year, GW 100 94,8 90 83,0 80 74,1 70 68,8 66,1 Utility (>5MW) 60 Industrial (1MW - 5MW) 54,6 Commercial (20kW - 1MW) 50 Residential (<20kW) 40 30 20 10 0 2015 2016E 2017E 2018E 2019E 2020E Source: GTM, Solar Summit, May 2016 Part 2.5
Slide 23: Emerging markets: Struggling to meet fast-growing demand
Emerging markets: Struggling to meet fast-growing demand Energy consumption per capita 2013 Average annual growth in power consumption kWh/Capita OECD Average 9.000 15% 8.000 7.000 6.000 5.000 4.328 8% 4.000 7% Global Average 6% 3.000 2.000 1.697 1.000 435 293 252 0% 0 South Africa Egypt Bangladesh
Slide 24: Solar PV is competitive
Solar PV is competitive Example load-curve and energy-mix Cost of alternative energy sources – (LCOE) Oil Geo Pmin Hydro Pmin Coal Hydro Coal Pmin Geo Demand MW USD/kWh 1.600 0,30 1.400 0,25 1.200 0.19-0.26 0.17-0.22 0,20 1.000 800 0,15 600 0.07-0.15 0,10 0.06-0.14 400 0,05 200 0 0,00 1 3 5 7 9 11 1
Slide 25: Multiple drivers of demand for solar
Multiple drivers of demand for solar The government agenda: How we address them: Examples: South Africa Power deficit Cost Time-to- competitive market Climate Egypt Treaty Clean Energy Build once – Cost of use for 30 & National energy finance years + Action Plans Market Solar Mali drivers PV Create
Slide 26: Norwegian and international partners key for our success
Norwegian and international partners key for our success Norfund partnership: • Project development and investment partnership • Norfund (with KLP) are equity co-investors in South Africa, Rwanda and Honduras IFC partnership: • Project development and investment partner in West Africa, South Asia GI
Slide 27: Early-phase development: Our toolbox
Early-phase development: Our toolbox Phase Origination Opportunity Attract and identify opportunities Develop and manage business case Enter pipeline • In-depth market and trend analysis • Evaluate and secure land • External communication, stakeholder • Explore finance arrangements presentations, bu
Slide 28: 2.4 GW of opportunities – emerging markets focus
2.4 GW of opportunities – emerging markets focus MENA Asia & Oceania 420 MW 1,050 MW Americas 170 MW Africa 770 MW Part 2.11
Slide 29: 3. Project Development and Project Finance
3. Project Development and Project Finance Terje Pilskog, EVP Our values Predictable Driving results Changemakers Working together
Slide 30: Develop to capture full project value
Develop to capture full project value • From opportunity to financial close • Integrated approach for efficient project development • Strong central organization with local development partners • Value creation and sustainability key development drivers • Predictable cash flows to enable attractive,
Slide 31: Project development in the integrated model
Project development in the integrated model Power Production Origination Development Structuring Delivery Phases O&M • Opportunity • Pipeline • Backlog • Construction • Operation • Analysis & • Site control • Equity, debt • Procurement • Operation & Intelligence • PPA and support structuring • Const
Slide 32: Drivers of project development priorities
Drivers of project development priorities • Local partner set-up • Sustainability 2,426 • 15% gross D&C margin MW • Average nominal after-tax 15% >50% Pipeline return on gross equity investment Assessed as having more than • Predicable cash flows 1,056 50% likelihood of • Net equity investment level
Slide 33: Project development organization
Project development organization SSO Partners* • 3 Scatec Solar hubs • Clear direction and focus on business model • Tight central control on development spending and business case • Local development partners managed by SSO hubs • Development partners with equity participation • Global development
Slide 34: Project development process
Project development process Opportunity Development Structuring Activity Ongoing 6-18 months 6-9 months Development partners Development budget Site selection Site surveying PPA Environmental permits Socialization of project Pre-design / engineering Support Agreement Grid connection Legal structure
Slide 35: Stable and predictable cash flows
Stable and predictable cash flows Power production • Stable resource 50 MW solar power plant example (USDm)* • Proven technology • Guaranteed performance Debt Equity Opex Debt repayment Interest expense Tax Cash flow to equity Revenues • Take or pay energy sales 14 14 15 15 12 13 13 13 13 13 13 14 1
Slide 36: Value creation in the integrated model
Value creation in the integrated model 50 MW solar power plant example (USD m)* Capex and funding D&C - developing and Power Production O&M USD million constructing the plant 20 year annual revenues 20 year annual revenues USD million USD million USD million 85 85 Other 15 70 12 10 64 Debt Co-invest
Slide 37: A number of factors influence the project returns
A number of factors influence the project returns 50 MW solar power plant example (USD m)* Equity IRR NPV@10% Structuring & construction phase Operating phase 20 20 16.9 16.4 16.0 15.8 15.9 15.5 15.7 15.0 15 15 NPV@10% 12.6 (USDm) 12.0 11.9 11.4 12.0 Equity 11.0 10.6 IRR% 10.0 10 10 5 5 0 0 Base cas
Slide 38: A comprehensive project finance process
A comprehensive project finance process Development Structuring Activity 6-18 months 6-9 months Establish Financial Model Test interest / share PIM Indicative terms Share Financial Model Sign mandate letters Negotiate Term Sheets Negotiate project documents Technical and legal due diligence Credit c
Slide 39: Lowest possible funding costs
Lowest possible funding costs Leverage 50 MW solar power plant example • Debt sizing based on debt service capacity Capex and funding in % • Mezzanine structures Costs of debt • Commercial banks vs Development banks (DFIs) 100 100 Development Fee • Interest rates, hedging and tenure Contigency & Wor
Slide 40: Project Finance for key projects
Project Finance for key projects Backlog Pipeline Egypt, 341 MW • EBRD + 6 banks • Due Diligence Pakistan, 150 MW • IFC Honduras, 53 MW • Term sheet discussions • GIEK / ECN & CABEI Segou, Mali, 33 MW • Loan documents • IFC and AFDB • SREP • Due diligence Mozambique, 40 MW • IFC and Emerging Africa
Slide 41: The deliverable: A shovel ready project
The deliverable: A shovel ready project Simplified illustration of company structure and main contracts in place Equity co- Scatec Solar investors 100% 39%-100% Land owners Shareholders agreement Land lease agreements Scatec Solar Single Purpose Project financing O&M / EPC • EPC contract Vehicle Loa
Slide 42: 4. Solutions
4. Solutions Pål Helsing, EVP Our values Predictable Driving results Changemakers Working together
Slide 43: Building plants with a well proven operating model
Building plants with a well proven operating model Our integrated approach is key to provide an optimised solution from project development through construction, operation and maintenance to power production. Value-contribution to our integrated model: • Engineering in close collaboration with Proje
Slide 44: Solutions in the fully integrated model
Solutions in the fully integrated model Power Production Origination Development Structuring Delivery Phases O&M • Opportunity • Pipeline • Backlog • Construction • Operation • Analysis & • Site control • Equity, debt • Procurement • Operation & Intelligence • PPA and support structuring • Construct
Slide 45: A solid track record of building solar plants
A solid track record of building solar plants 383 MW in operation: Czech Kalkbult Dreunberg Linde ASYV Agua Fria Red Hills 20 MW 75 MW 75 MW 40 MW 9 MW 60 MW 104 MW Czech Republic South Africa South Africa South Africa Rwanda Honduras USA Installation track record (MW): 602 • 15 years of experience
Slide 46: 50 MW PV plant – build up
50 MW PV plant – build up SCADA Plant Control Room Plant Controlling Transmission line Inverter DC AC 160,000 solar modules/ 20 inverters 20 transformers Sub station Power grid 800 trackers Low voltage (DC) Low voltage (AC) Medium voltage (AC) High voltage (AC) Part 4.5
Slide 47: Value realisation
Our integrated approach enables key decisions to be made at an early stage of the project Development and Structuring Delivery Value realisation Ability to influence Cash generation Value engineering Best value sourcing Risk assessment, mitigation and management 47 Part 4.6
Slide 48: A standard high level operating model and project plan
A standard high level operating model and project plan from Structuring through Delivery Part 4.7
Slide 49: Value drivers in the engineering and construction phase
Value drivers in the engineering and construction phase 50 MW solar power plant example (USD m)* Equity IRR NPV@10% Structuring & construction phase Operating phase 20 20 16.9 16.4 16.0 15.8 15.9 15.5 15.7 15.0 15 15 NPV@10% 12.6 (USDm) 12.0 11.9 11.4 12.0 Equity 11.0 10.6 IRR% 10.0 10 10 5 5 0 0 Ba
Slide 50: Our sourcing model is tailored to our projects
Our sourcing model is tailored to our projects Sourcing based on frame agreements focusing In country risk “boxed” into one construction on cost, quality and delivery assurance contract (sub-EPC) • Leverage high volume in project pipeline and • Scope: From receipt of “bulk” material to opportunities
Slide 51: Installation work includes a high number of standard components
Installation work includes a high number of standard components and work processes • Typical volume for 50 MW power plant • Containers: 1 000 • Drilling of foundation holes: 13 500 • Ramming of foundation piles: 13 500 • Installation of substructure tables: 4 500 • Installation of modules: 180 400 •
Slide 52: Sustainability is core and profitable
Sustainability is core and profitable Example from some recent projects Agua Fria, Dreunberg, ASYV, Honduras South Africa Rwanda 60 MW 75 MW 9 MW Jobs Created 1,050 1,400 600 (Mounting and construction workers during peak construction period) % Local Employees* 82% 77% 85% Numbers of workers with 27
Slide 53: Summary
Summary Our integrated approach is key to provide an optimised solution from project development through construction, operation and maintenance to power production. A robust project execution model: • Operating system based on long experience from construction of PV plants • Strong Project Manageme
Slide 54: 5. Power Production, Asset Management and O&M
5. Power Production, Asset Management and O&M Torstein Berntsen, EVP Our values Predictable Driving results Changemakers Working together
Slide 55: Securing and maximizing returns from a growing portfolio of power producing assets
Securing and maximizing returns from a growing portfolio of power producing assets Power Production Origination Development Structuring Delivery Phases O&M • Opportunity • Pipeline • Backlog • Construction • Operation • Analysis & • Site control • Equity, debt • Procurement • Operation & Intelligenc
Slide 56: Benefits of an integrated, industrial approach to operating power plants
Benefits of an integrated, industrial approach to operating power plants • Aligned focus on operational excellence and maximizing kWh produced • Continuous search for improvement opportunities trough multidisciplinary teams • Experience gained in operations translated to improvement initiatives for
Slide 57: Contractual structure established to ensure good governance
Contractual structure established to ensure good governance and efficient operations • Simplified illustration of company structure and main contracts in place Equity co- Scatec Solar investors 100% 39%-100% Shareholders agreement Scatec Solar Land owners EPC Land lease agreements Scatec Solar Singl
Slide 58: Generating significant cash-flow from multiple sources
Generating significant cash-flow from multiple sources 50 MW project example - typical structure 100% 100% Asset Management fee to Scatec Solar 3% SSO margin 15% Opex SSO cost O&M Margin to Scatec Solar Other opex • Impacted by plant performance through bonus arrangements 23% Interest 32% Amortisati
Slide 59: Key drivers of Cash Flow to Equity in an operating project
Key drivers of Cash Flow to Equity in an operating project Electricity price Activity areas: PPA revenues 1. Asset management Production volume • Administrative operation of the Project + Companies (Cost Management, compliance, Other revenues stakeholder management). O&M fees • Improving structure a
Slide 60: 50 MW PV plant – build up
50 MW PV plant – build up SCADA Plant Control Room Plant Controlling Transmission line Inverter DC AC 160,000 solar modules/ 20 inverters 20 transformers Sub station Power grid 800 trackers Low voltage (DC) Low voltage (AC) Medium voltage (AC) High voltage (AC) Part 5.7
Slide 61: Drivers of production in a PV power plant
Drivers of production in a PV power plant Tilt Horizontal irradiation Capacity Tracking Effective kWp System design irradiation Row 100% distribution Production Yield kWh/kWp Performance - kWh ratio % Modules Losses Soiling 100% Availability Temperature - Frequency % of incidents Cables Downtime Rep
Slide 62: Weekly irradiation, Kalkbult (SA)
Weekly irradiation, Kalkbult (SA) 70 60 50 Global Horizontal Irradiation [kWh/m2] 40 2014 30 2015 2016 20 P50 1) 10 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Week While solar irradiation genera
Slide 63: Rolling average irradiation, Kalkbult (SA)
5 weeks rolling average irradiation, Kalkbult (SA) 70 60 50 Global Horizontal Irradiation [kWh/m2] 40 30 2014 5-week average 2015 5-week average 20 2016 5-week average 10 P50 1) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
Slide 64: Annual accumulated irradiation, Kalkbult (SA)
Annual accumulated irradiation, Kalkbult (SA) 2 500 2 000 Global Horizontal Irradiation [kWh/m2] 1 500 2014 - Accumulated 1 000 2015- Accumulated 2016 - Accumulated 500 1) P50 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44
Slide 65: Annual accumulated irradiation vs. production
Annual accumulated irradiation vs. production 2 500 160 000 Irradiation Production 140 000 2 000 120 000 Global Horizontal Irradiation [kWh/m2] Power Production [MWh] 100 000 1 500 80 000 2014 - Accumulated 2014 - Accumulated 1 000 60 000 2015- Accumulated 2015- Accumulated 40 000 2016 - Accumulated
Slide 66: A global standardised approach to O&M
A global standardised approach to O&M based on significant experience • Global SSO SCADA system allowing for remote monitoring and operation through which central experts can provide back-up and support to plant- level operators. • Global SSO operating system with standard operating procedures allow
Slide 67: The value of an integrated, industrial approach: Reducing downtime
The value of an integrated, industrial approach Example: Reducing downtime Quality of equipment Design/suppliers Preventive maintenance procedures Operating procedures Operating procedures/ Early detection procedures Technology strategy (Revenues lost) Organisation and staffing Availability of quali
Slide 68: A number of factors influence the project returns
A number of factors influence the project returns 50 MW solar power plant example (USD m)* Equity IRR NPV@10% Structuring & construction phase Operating phase 20 20 16.9 16.4 16.0 15.8 15.9 15.5 15.7 15.0 15 15 NPV@10% 12.6 Equity (USDm) 12.0 11.9 11.4 12.0 11.0 10.6 IRR% 10.0 10 10 5 5 0 0 Base cas
Slide 69: Prepared for growth
Prepared for growth • Power production set to reach more than 3 TWh per year with current growth targets • Contract length of 20 to 25 years – potential for additional power sales after this period GWh New opportunities 5,000 60% of current pipeline Backlog (422 MW) 4,500 In operation & under constr
Slide 70: 6. Financials and funding
6. Financials and funding Mikkel Tørud, CFO Our values Predictable Driving results Changemakers Working together
Slide 71: Our approach to investments and financing
Our approach to investments and financing Key principles: • Controlling equity positions in the projects • Capital discipline – return and margin targets • Investments funded through non-recourse project finance NYTT BILDE • D&C margins - key contribution to equity positions • Working capital - mana
Slide 72: Cash flows in Scatec Solar
Cash flows in Scatec Solar Sources of cash: O&M contract 3 O&M contract 2 Operating power plants O&M contract 1 Project company New power plants 3 O&M Construction Project company margins project 3 2 Total cash Construction Project company available project 2 1 Distributions Development & Constructi
Slide 73: Steadily growing cash flow from operating plants
Steadily growing cash flow from operating plants SSO proportionate share of cash flow to equity* 2014 and 2015 (NOKm) Development & Contruction Operations & Maintenance 240 Corporate Power production 208 71 179 76 58 42 24 37 22 10 131 87 -35 -22 2014 2015 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 • 2016 cash f
Slide 74: Structuring projects with self-funding capacity
Structuring projects with “self-funding” capacity 50 MW solar power plant example (USDm)* Debt Equity Opex Debt repayment Interest expense Tax Cash flow to equity 14 14 14 15 15 13 13 13 13 14 12 12 12 13 13 11 11 11 12 12 Project company perspective: -2 -2 Year Year Year Year Year Year Year Year Ye
Slide 75: A self funded growth capacity of 300-400 MW per year
A self funded growth capacity of 300-400 MW per year Basis for self funded growth capacity Funding of 300-400 MW (NOK million)* • 2016 cash flow to equity from PP and O&M of NOK 180-200 million Sources: – growing with new operating assets CF from PP and O&M ~180-200 • D&C gross margins of 15% from r
Slide 76: Managing working capital
Managing working capital Working capital in project development phase: Project development cash flow*: (USDm) • Project development expenses typically Development recovery + premium represents 3-4% of project capex • SSO recovers the project development expenses Project development expenses 3 at fin
Slide 77: Financial risk management
Financial risk management Power price • Fixed for 20-25 years, normally inflation adjusted • USD/EUR denominated or pegged tariff except in Czech and South Africa Currency Project Company: • Project company structure debt in same currency as long term revenues • Project company hedges any currency e
Slide 78: A history of profitable growth
A history of profitable growth Consolidated financials, NOK million Revenues 881 EBITDA Net profit 698 471 293 129 136 49 -17 -8 2013 2014 2015 Part 6.9
Slide 79: 2015 segment results – explained
2015 segment results – explained Full Year 2015 Power Operation & Development & (NOK million) Production Maintenance Construction Corporate Eliminations Consolidated External revenues 863.0 4.1 0.7 - - 867.7 Internal revenues - 51.4 1,146.6 7.5 -1,205.5 - Net gain/(loss) from sale of project assets
Slide 80: Cash flow not affected by eliminations in the accounts
Cash flow not affected by eliminations in the accounts Cash flow to equity from PP and O&M* (NOKm) Cash flow to equity from D&C* (NOKm) Operation & Maintenance (O&M) Power Production (PP) Development and Construction (D&C) 3 9 5 7 4 39 39 31 29 32 26 20 13 4 7 Q1 15 Q2 15 Q3 15 Q4’15 Q1’16 Q1 15 Q2
Slide 81: Eliminated D&C margins affects book equity
Financial position Eliminated D&C margins affects book equity Build up of PP&E as per 31.03.2016 NOKm • Margins created through Development & 6,574 1,106 Construction of power plants are eliminated in consolidated financial 5,468 5,427 statement 493 • Elimination booked against PP&E in consolidated
Slide 82: A solid financial position
Financial position A solid financial position Consolidated financial position: Financial position (NOKm) as of 31.3.2016 • Full consolidation of all project companies 7,725 7,725 • Cash position of NOK 1,217 million of which NOK 277 million 716 free cash available outside project companies 1,682 571
Slide 83: Prepared for further growth
Prepared for further growth • Risk managed through project structuring • Controlling equity positions • Integrated business model • Non-recourse project finance • “Cash flow to Scatec Solar equity” – a key measure of value creation • A solid “self funded” growth capacity • Capital discipline – retur
Slide 84: 7. Financing solar in emerging markets
7. Financing solar in emerging markets Scatec Solar Capital Markets Day – 31 May 2016 Harry Boyd-Carpenter, Senior Banker, Power and Energy Utilities
Slide 85: DFIs, MDBs, IFIs…
DFIs, MDBs, IFIs… • Public ownership • Public mandate • Strategically public, tactically private • Patient capital • Conservative on commercial and technical risks; appetite for political risks • Deep commitment to environmental and social standards • Mobilise and catalyse private finance – no crowd
Slide 86: EBRD overview: annual business investment
25 years of investment AAA-rated, multilateral development bank, Net cumulative business investment founded in 1991 to promote transition to €107 billion modern and well-functioning markets Since 1991, EBRD invested over €107 12 110 105 billion in over 4,400 projects across private 11 100 95 and pub
Slide 87: EBRD finances diverse range of enterprises
EBRD finances diverse range of enterprises Introduction to EBRD Case studies Agribusiness - 12% 12 % 18 % Manufacturing and Services - 12% Information & Communication Technologies - 2% 12 % Property and Tourism - 2% 8% 2% Equity Funds -5% 2% Financial Institutions - 23% 5% 13 % Municipal & Env Inf -
Slide 88: Operational approach
Operational approach • Promoting sustainable energy • Honest broker role • Sharing experience and best practice Policy dialogue • Development equity Technical • Mezzanine cooperation • Project finance • Corporate loan • Equity Investment • Regulatory frameworks • PPA drafting • Grid absorption studi
Slide 89: Bankability in emerging markets
Bankability in emerging markets Why? • Understand the drivers Who? • Sponsor, partners, financiers What? • Technology, location, interconnection How? • Environmental and social standards; operating principles Write it all down • Legislative, regulatory and contractual framework Part 7.6
Slide 90: Governments and the energy trilemma
Governments and the energy trilemma Energy is supplied to all Energy is delivered in a consumers at a price that allows manner that does not them to meet their basic needs. undermine opportunities of future generations to enjoy the same level and quality of Affordable Affordable services by degradin
Slide 91: Solar in emerging markets
Solar in emerging markets Source: IEA Energy Technology Perspectives 2015 – annual power sector deployment rates in the Two Degrees Scenario. Part 7.8
Slide 92: Jordan – Oryx solar project – April 2016
Jordan – Oryx solar project – April 2016 Part 7.9
Slide 93: Financing solar in emerging markets
Financing solar in emerging markets Scatec Solar Capital Markets Day – 31 May 2016 Harry Boyd-Carpenter, Senior Banker, Power and Energy Utilities
Slide 94: Summary
Summary Raymond Carlsen, CEO Our values Predictable Driving results Changemakers Working together
Slide 95: Positive market outlook
Positive market outlook • The global market for PV is expected to grow significantly in the years to come • Emerging economies will continue to take advantage of lower cost renewables • Lower oil and gas prices have limited impact on the appetite for renewables • Market transformation opens up for n
Slide 96: Thank you
Thank you Our values Predictable Driving results Change makers Working together