Financing biofuels - Bioenergi

Financing biofuelsPresentation at the Sustainable Biofuel Network28 th April 2011 by Per RegnarssonPrepared by Clean World Capital A/SStrictly Private and Confidential‘Energy Advisory Firm of the Yearin Denmark’

Prepared by Clean World Capital A/SStrictly Private and Confidential

Clean World Capital – ”old-fashioned” Merchant BankingCarbon BrokerageLondon, GenevaAdvisoryLondon, CopenhagenPrincipal InvestmentsLondon, CopenhagenCarbon Brokerage• Brokering• Sales Trading• Derivatives & StructuringResearch• Regular Reports• Special TopicsCapital Markets• Fund Capital• Equity & Debt CapitalCorporate & Project Finance• Capital Structure• M&A• StrategyCarbon Markets• Carbon credit monetization• CRE Origination / Advisory• One World Energy• CWC Biofuels• Pelferino• TitanCWC is looking for strategic partners, clients, investors, and financiers that shareOUR MISSION of facilitating MORE renewable energy FASTER© Clean World Capital 2010. All rights reserved. Information contained in this document is provided without liability for information purposes only and is subject to change without notice. No representation orwarranty is given or to be implied as to the completeness of information or fitness for any particular purpose. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Understanding Biomass and Biofuels – “skin in the game”Our experienceWaste to Energy &Biomass to Energy ->Closed €40m plasmagasification plant inFrance in Jan 2011Wood pellets -> codevelopmentof 70,000-100,000 tonnes pelletplant in France andadvisor in UkraineBiomass to Energy -> Advisor on large scale plants in the UK, smaller plantsin Italy and GermanyOur networkSelected funds looking at biomass and biofuels© Clean World Capital 2010. All rights reserved. Information contained in this document is provided without liability for information purposes only and is subject to change without notice. No representation orwarranty is given or to be implied as to the completeness of information or fitness for any particular purpose. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Addressing the Cleantech Finance GapStrategy / ManagementCorporate FinanceCapital MarketsEquity Bridge / IncubationKNOWLEDGECAPITALEarly stage VC Late stage VC / Venture Debt Growth capitalPre-permit projects Construction phaseBuy outPublic equityInfrastructureControlling supply chainBridge knowledge / capital gapAccess to capital ownersCapturing return growthConnect market participants© Clean World Capital 2010. All rights reserved. Information contained in this document is provided without liability for information purposes only and is subject to change without notice. No representation orwarranty is given or to be implied as to the completeness of information or fitness for any particular purpose. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Project Finance Climate is on balance restricted•Nordic banks need greater policy encouragement•Swedish, Finnish and Norwegian renewable projects are financed plentiful•Sovereign risks in Southern Europe and austerity packages => investor demand in Northern Europe© Clean World Capital 2010. All rights reserved. Information contained in this document is provided without liability for information purposes only and is subject to change without notice. No representation orwarranty is given or to be implied as to the completeness of information or fitness for any particular purpose. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Wind and Solar PV preferred – biomass and biofuels offer strong fundamentals© Clean World Capital 2010. All rights reserved. Information contained in this document is provided without liability for information purposes only and is subject to change without notice. No representation orwarranty is given or to be implied as to the completeness of information or fitness for any particular purpose. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Biofuels faced by negative legacy, new technologies and complexity•Maturing technology / low technology risk•Technology costs moving downwards•

More balanced support for deployment, please!Financing Technology• Venture Capital• Corporate Ventures• Grants• Govt DevelopmentFunds• Private equity• Asset/VendorFinanceFinancing Deployment• Development capital• Grants• Corporate equity /Private Equity• Project Equity• Project Finance• Construction• Permanent• EIB, NIB fundingCWC Work Process Document - Friday, 29 April 2011 - P 9© Clean World Capital 2010. All rights reserved. Information contained in this document is provided without liability for information purposes only and is subject to change without notice. No representation orwarranty is given or to be implied as to the completeness of information or fitness for any particular purpose. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Two-tier Project funding finance structure in Renewable incentivises Energy faster deploymentDevelopmentConstruction Financing & BeyondSeed FundsGrantsEarly-StageInvestorDeveloperTOPCODeveloperTOPCOInvestorBiofuels SPVOPCOBio FuelsSPV 1Bio FuelsSPV 2Bio FuelsSPV 3Debt finance,EU grants1. First priority should be first plant2. What’s the objective of incomingshareholders3. Grants require matching private capital4. ROCE for equity investors 25%1. Equity investors may focus on Opco investment, ie2. project equity3. Debt financing leads due diligence phase4. Equity investor likely to require developer/topco5. invested in projects6. Debt finance including EIB, NIB funding 60-80%7. Project equity IRR 8-15%© Clean World Capital 2010. All rights reserved. Information contained in this document is provided without liability for information purposes only and is subject to change without notice. No representation orwarranty is given or to be implied as to the completeness of information or fitness for any particular purpose. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Making biofuels bankableDevelopmentConstruction•Set the team•Research industry andlocation•Build a strong financialmodel•Get local support andstakeholder involvement•Set realistic targets•Feed stock secured for a long period (amortization period)•Off take secured for a long period•De-risk by align price developments – “pass-throughmechanism”•Proven and commercially viable technology•Consider financial strengths of technology, EPC and O&Mproviders•Get all permissions rightDe-risk where and when possibleAnticipate questions being asked by lenders and investorsAddress Known Knowns and Known UnknownsAcknowledge that Known Unknowns may be deal breakers© Clean World Capital 2010. All rights reserved. Information contained in this document is provided without liability for information purposes only and is subject to change without notice. No representation orwarranty is given or to be implied as to the completeness of information or fitness for any particular purpose. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

CWC Biofuels – 200 million litres 2nd generation biofuels plantClient relevance:Plans for the development of 100 million litres plantCommercially proven technology:2 nd generation fast pyrolysis technology from leading,global engineering groupFeedstock:Targeting Nakskov, the plant will be within closeproximity to relevant feedstock providersOff-take:Location and tighter industry regulation make shippinga very relevant client segment, while refiners offer analternative, subject to upgrade requirementsLolland, NakskovStakeholder support:Local municipality aims to create employment andoffers political support, while project benefits from earlystagesupport from Copenhagen Capacity© Clean World Capital 2010. All rights reserved. Information contained in this document is provided without liability for information purposes only and is subject to change without notice. No representation orwarranty is given or to be implied as to the completeness of information or fitness for any particular purpose. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.