Table of contents. (1) Permitting flexibility for a range of wind turbines 4. (11) Strategy for sale of electricity 14

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2 Table of contents (1) Permitting flexibility for a range of wind turbines 4 (2) Improving TSA and MSA agreements 5 (3) Better energy resource assessment for low risk 6 (4) Re-negotiated lease agreements and easements 7 (5) Re-designed grid connection and cable lines 8 (11) Strategy for sale of electricity 14 (12) Extension of wind farm design life 15 (13) O&M strategy review and SMART Asset Management _ 16 (14) Better documentation for better asset integrity 18 (15) Contract negotiation support to reduce CAPEX and OPEX19 (6) Project engineering management for multi-contract 9 (7) Negotiating term sheets and facilities agreements 10 (8) Project contract and claims management 11 (9) Optimizing construction logistics 12 (10) Tax optimization at construction & operation 13 OUR OFFER: a RED-FLAG audit to explore the possibilities of your project 21 About Solivan 22 About Wind Prospect 24

3 Introduction Following the EU Energy and Environmental Aid Guidelines (July 2014), the 2016 Contracts for Difference auction system in Poland requires developers and investors to take a much more professional approach to their investment in renewable energy projects. The auction system will require competitive tenders between projects and between technologies which we anticipate will generally lead to lower levels of tariff support and may mean a lower return on investment unless action is taken now to optimize your project. To be competitive in this auction system, business plans for wind farm investments have to be optimized regarding CAPEX, OPEX and revenues. Professional planning and documentation, optimization of construction and financing costs, accurate long term projection of revenues and optimization of operational costs will attract those investors who can accept a lower tariff, whilst continuing to maximize return on investment and delivering acceptable yields for developers at exit. Both Solivan and Wind Prospect have a well-established track record in the field of renewable energy and in this document we offer a unique and complementary set of 15 measures to help optimize the outcome of your wind farm investment. Christian Schnell, Partner, Solivan Aleksandra Dziewulska, Country Manager Poland at Wind Prospect Robert Speht, General Manager, Advisory Services at Wind Prospect

4 (1) Permitting flexibility for a range of wind turbines Reviewing the permits for resubmission or reviewing the permit application before submission can provide flexibility during the wind turbine selection process. Use this process to maximize the range of suitable wind turbine manufacturers and models for the Project. An audit for projects that have already finalized permits can also be conducted. By maximizing the range of turbine options and then performing a detailed comparison could lead to a significant reduction in CAPEX and OPEX and increase in revenue. The output is a list of wind turbine options with an estimated timescale and cost, estimated change in CAPEX and OPEX, and estimated energy yield. Review Permits Increase flexibility Provide advice during wind turbine selection Reduce CAPEX and OPEX Increase revenue 4 solivan.pl windprospect.com

5 (2) Improving TSA and MSA agreements Flexibility in permitting allows for the re-negotiating of agreements with turbine manufacturers with a pro-active approach regarding increasing availability rates (and production figures) and improving warranty terms to better satisfy institutional investors. Improved agreements early on in the development of the project can greatly affect the financial performance of the wind farm once operational, but even later on there are opportunities to optimize these agreements. Negotiating turbine supply agreements including increasing availability rates Optimize warranty terms regarding maintenance and service agreements Optimize costs of long term maintenance and service satisfying banks and institutional investors Options for 3 rd party O&M to reduce costs solivan.pl windprospect.com 5

6 (3) Better energy resource assessment for low risk An accurate pre-construction Energy Resource Assessment (EYA) for a wind farm project is of paramount importance for the investment to be successful. A well designed and executed wind measurement campaign, as well as the assessment of the data are of great value for establishing a realistic financial model of a wind farm, however their importance is intensified by introduction of the new Contract for Difference (CfD) auction system. Additional investment in the wind monitoring campaign is translated into higher accuracy of the EYA and help to minimize the level of uncertainty. As a consequence the risk connected with the future energy output can be limited, providing greater competitiveness in the auction bidding. Higher quality of wind measurement campaigns multiple measurement locations and fully IEC compliant facilities Ensuring best possible quality of modelling input data Additional remote sensing measurements Professional use of the data in Energy Resource Assessments Additional wind campaign during pre-qualification and construction phase to lower risk at sale to end investors 6 solivan.pl windprospect.com

7 (4) Re-negotiated lease agreements and easements A service for re-negotiating lease and easement agreements with land owners and lease agreements with municipalities; the aim being to a) lower costs to the project, b) to reduce risk from the project finance point of view and c) increase options for longer project design life and/or possible future extensions to the wind farm Re-negotiating lease agreements and division of plots to reduce risk at bailiff procedures Establishing transmission easements and ground easements to reduce operational risk Re-negotiating land lease agreements with municipalities to optimize land use solivan.pl windprospect.com 7

8 (5) Re-designed grid connection and cable lines Often grid connections and cable runs are over-designed for a wind farm. We offer a service aimed at re-designing cable lines to optimize costs for easements and payments to municipalities for cable corridors. There are also options to look at how connection costs could be shared for more than one wind farm where appropriate. Re-designing/-negotiating grid connection conditions with the aim of reducing costs and complexity and/or sharing costs with other users Re-designing cable lines to optimize construction costs Looking at options for overhead and underground cabling for the most cost-efficient solution Re-designing cable diameters to reduce energy losses 8 solivan.pl windprospect.com

9 (6) Project engineering management for multi-contract We offer a service that professionalizes the project engineering with the aim of the client being able to tender for separate orders for turbine supply, earth works & foundations and electrical works to avoid EPC premiums and reduce the amount of contingency fund needed using the multi-contract approach. Includes a service to analyze and mitigate the interface gaps and risks. Optimize warranty concept to make separate works bankable for institutional investors Preparing complementary tenders Drafting and negotiating agreements for earthworks & foundations and electrical works to be complementary to turbine supply agreement Drafting and negotiating agreements with EPCM and/or Owner s Engineer solivan.pl windprospect.com 9

10 (7) Negotiating term sheets and facilities agreements A service for negotiating term sheets and facilities agreements and securities packages with commercial banks to fix financing costs before bidding at auction. Advising at modelling business plans concerning CAPEX,OPEX and revenue optimization Negotiating term sheets e.g. concerning debt service reserve accounts, distribution policy Strategy for wind assessments to base financial models on p75 and p90 production 10 solivan.pl windprospect.com

11 (8) Project contract and claims management A service aimed at contract and claims management to enforce proper documentation required by institutional investors and to prevent construction companies achieving savings by using inadequate quantities of construction material or to make excessive claims for extra payments. Drafting and negotiating construction contracts based on FIDIC standards Drafting templates for claims management and implementing solutions Coordinating construction schedules and contract management Post-construction claims management solivan.pl windprospect.com 11

12 (9) Optimizing construction logistics We can offer an optimized logistics to avoid; unnecessary earthworks, cost for temporary use of land, equipment being hired longer than needed, contractor companies waiting for other elements and causing delay and therefore cost overruns. Optimizing road survey to avoid unnecessary costs for temporary use for land Optimizing strategy for use of equipment Optimizing logistic concepts for construction to avoid waiting periods Implementing logistic concepts to avoid delay payments 12 solivan.pl windprospect.com

13 (10) Tax optimization at construction & operation A service aimed at tax optimization of real estate tax, company tax on profits, investment tax-breaks etc. The service could be provided as having the output as a menu of options. For this we engage our best friend tax advisors specialized in renewables investments. Tax structuring concerning financing, distribution policy and exit Advice on depreciation rates during construction and operation Advice on real estate tax (land, buildings, structures) and excise tax optimization Transfer pricing documentation solivan.pl windprospect.com 13

14 (11) Strategy for sale of electricity The contract for difference is settled with OREO agency on the basis of the average day-ahead index IRDN24, so investors may win or lose against the IRDN24 index. Therefore, a strategy to optimize the sale of electricity at the highest possible price level and to decrease balancing costs is essential for economic success. Developing strategies for sale of electricity on spot market, day-ahead market, forward and future market Negotiating power purchase agreements Scheduling maintenance to minimize impact on value of electricity sold 14 solivan.pl windprospect.com

15 (12) Extension of wind farm design life A service that looks specifically at opportunities to extend the wind farm design-life through targeted inspections and modified operations. An audit style service with the outputs in the form of different maintenance and operations options - each with a timescale and cost. Comparison of different scenarios can be used to maximize the revenue and project value. Cost analysis for different maintenance and operations options Modified operations to reduce loads early in the project Targeted inspections later in the project life Increased design life for greater returns Increased design life for increased project value solivan.pl windprospect.com 15

16 (13) O&M strategy review and SMART Asset Management Opportunities to increase revenue from a wind farm project by reviewing the O&M strategy are always present. An audit style service with the output in the form of a list of options each with a timescale and a cost, together with an estimated benefit to the client. We can assess re-designing the O with a separate M before construction to reduce OPEX and increase revenue SMART Asset Management. This is a combination of working up a new O&M strategy with the client and looking at how the contracts for O, M & S can be structured differently for better control and reduced costs and increased revenue rather than a one-sized fits all O&M package. Then we can also run the O and co-ordinate the M and S on behalf of the client. Re-design of O&M to use 3rd Party providers after warranty period has finished reducing cost and providing better control Drafting and negotiating technical service agreements with external providers / reviewing scope of services Implementing order strategies to reduce costs for exchanging components 16 solivan.pl windprospect.com

17 Reviewing full service contracts and balance reserves for exchanging major components Drafting and negotiating asset management agreements / reviewing scope of services Insurance strategies Drafting and negotiating success based asset management remuneration Negotiating scope of services of technical management service agreements; electronic monitoring tools, inspection and timeline Agreeing scope of technical service regarding electrical components including transformers and substations Executing proper documentation for technical services solivan.pl windprospect.com 17

18 (14) Better documentation for better asset integrity Re-designing documentation, including electronic documentation for better Asset Integrity (and therefore higher Asset value), better claims management and better predictive maintenance (which means reduced downtime and increased revenue from the project). Structuring and organizing lifetime virtual data rooms (VDR) Executing high quality documentation from construction companies, turbine suppliers, designers, technical managers Reviewing documentation during warranty period and developing strategies to extend warranty periods Designing an electronic documentation system for your project Implementing lifetime monitoring strategies 18 solivan.pl windprospect.com

19 (15) Contract negotiation support to reduce CAPEX and OPEX We can provide support with contract negotiation to reduce CAPEX and OPEX. A stand-alone service which is focused on reducing CAPEX and OPEX through better contracts and the negotiation of them with the supplier. This service is particularly beneficial at an earlier stage for your project, but there are always options to re-visit your contracts. Transparent interfaces and responsibilities Detailed breakdown supply and costing Highlight areas of negotiation Reduce cost of supply Improve payment schedule for developer Improve quality of supply solivan.pl windprospect.com 19

20 We look forward to working with you Christian Schnell PhD Solivan B. Miszkurka Adwokaci i Radcy Prawni Spółka Partnerska ul. Moniuszki 1a, Warszawa Tel cschnell@solivan.pl Aleksandra Dziewulska & Robert Speht Wind Prospect Polska Sp. z o.o. ul. Miła 6B, Warszawa Tel aleksandra.dziewulska@windprospect.com robert.speht@windprospect.com 20 solivan.pl windprospect.com

21 OUR OFFER: a RED-FLAG audit to explore the possibilities of your project We offer you an audit of your wind farm project to explore the possibilities of implementing the 15 measures outlined in this booklet for the best outcome of your project. Our audit is a most price efficient way to estimate the potential for optimizing your project. Our services are performed step by step. Step 1: Red-flag audit of the project Step 2: General estimation of potential for revenue increase and cost savings for the project Step 3: Comprehensive due diligence covering all 15 measures to provide an overview about specific revenue increases and cost savings Step 4: Introducing timelines and costings for all 15 measures Step 5: Implementing and reviewing your chosen options from the 15 measures solivan.pl windprospect.com 21

22 About Solivan Our lawyers have for over 15 years participated in a large variety of Polish projects including energy (co-generation, renewables), gas (upstream), major infrastructure projects, utilities and transportation (including both transportation systems and facilities). Our lawyers attend and participate in conferences, seminars and other industry gatherings in Europe and hold leading roles with industry bodies to play a significant role in the legislation process. We know what matters to our clients. We combine industry knowledge with energy and resources law expertise to support our clients throughout the lifecycle of their projects. In addition to the core aspects that accompany an energy and environment investment and transaction mandate, counsel may be called upon to provide advice in the area of project finance in which the firm has recognized expertise: In a number of significant and high-profile projects, the firm has acted for sponsors or other participants. We advise clients on the day-to-day changes in the regulatory environment. We advise on Renewable Energy projects, Co-generation projects and Gas upstream projects. We offer legal assistance in respect of investments in generation and trading of energy derived from WIND, SOLAR, BIOMASS and BIOGAS. Our team provides specialist advice on the development, financing, construction and operation of renewable energy source (RES) and co-generation installations. 22 solivan.pl windprospect.com

23 SOLIVAN S services include: PROJECT DEVELOPMENT: comprehensive due diligence concerning last mile development, (re-)negotiating lease agreements and easements, planning and zoning law, environmental law, administrative and court proceedings, grid connection conditions and agreements, project development agreements, turbine supply agreements, maintenance and service agreements, BOP contracts, contract and claim management, service agreements. TRANSACTIONAL ADVICE: red flag due diligence, joint venture agreements, share purchase agreements including innovative purchase price mechanisms before starting at auction with flexible CAPEX/OPEX and project revenue. PROJECT FINANCE: negotiating term sheets, drafting and negotiating facilities agreements, drafting securities packages, coordination of conditions precedent and subsequent, legal and capacity opinions. solivan.pl windprospect.com 23

24 About Wind Prospect Wind Prospect is a global energy business providing engineering, management and commercial advice throughout the lifecycle of renewable energy project development. Employing around 200 expert staff with offices in Poland, UK, Ireland, Australia, Hong Kong, Singapore, Philippines, France, Germany and South Africa. We have over 20 years experience in all aspects of wind, offshore wind and solar farm design, permitting, construction, operation and commercialization. Our multi-disciplinary team has unsurpassed practical expertise and are renowned worldwide for providing the detailed technical advice that helps clients to deliver projects. We also bring significant experience from wind farm projects in other countries where there is an auction system for the support tariff, similar to the new Contracts for Difference system in Poland, such as the UK and South Africa. Our experience can be summarized as: We have delivered 211 wind & solar due diligence projects totaling 28GW worldwide, including 28 projects in Eastern Europe. We are a sector-leader in due diligence having delivered reports used by many banks and investors. Our due diligence reports are therefore considered bankable. 24 solivan.pl windprospect.com

25 We have achieved construction permits / consent / planning permission for over 3GW of wind energy production capacity, and contributed to the permitting process and Environment Statements of many more. We have been instrumental in the design and construction of more than 130 wind farms worldwide and have a very strong team available to assist you in this area. We provide Asset Management/operations services for 76 wind farms totalling more than 900MW at present and have the capacity to operate your wind farm asset on your behalf. We have delivered more than 400 energy resource assessments/reviews, on 20GW of wind & solar projects, including projects totaling over 3GW in Poland. solivan.pl windprospect.com 25

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