Canadian Wind Market 03/27/2013. Natixis Global Infrastructure & Projects

Transcription

1 Canadian Wind Market 03/27/2013 Natixis Global Infrastructure & Projects

2 Groupe BPCE 2 nd largest banking group in France 50% 50% 72.3%: BPCE Majority Owner of Natixis 27.7%: Public Float BPCE Figures Ratings: Core Tier 1 Ratio: 2012 Revenue: 2012 Net Income: A/A2/A+ (S&P/Moody s/fitch) 10.7% (Basel III) 21.9 billion 2.75 billion One of the 15 largest banking groups in the Americas and Europe (2 nd largest in France) All financial establishments affiliated to BPCE benefit from a Guarantee and Solidarity Scheme 2

3 Natixis: A Global Force in Project Finance Natixis ranks among the top global financial institutions within infrastructure and project finance : Over the last 20 years, Natixis has developed its platform to become recognized as a major firm within infrastructure and project finance both as Financial Advisor and Mandated Lead Arranger Natixis has a global presence in the sector, with a portfolio of 300 projects in 45 countries A proven expertise recognized over the years Natixis is continuously involved with numerous landmark transactions that are recognized by trade publications such as Project Finance International, Project Finance Magazine, Infrastructure Journal, etc. 80 professionals worldwide organized by : Four centers of worldwide sector expertise Natural Resources & Offshore Infrastructure Power & Renewables Infrastructure Transportation & Social Infrastructure Telecom Infrastructure Three regions Americas EMEA Asia-Pacific A Representative Office in Montréal opened in # 7 (2012) # 10 () FINANCIAL ADVISER # 5 BOOKRUNNER Project Finance in EMEA 3

4 Power & Renewable Energy Expertise Global Leader in power and renewable energy : 32 deal awards in the last 5 years in power and renewable energy alone. Renewable MLA of the Year in (IJ Journal). Power Advisor of the Year in 2010 (IJ Journal). Specialized team in renewables in the Americas : Specialized in arranging, structuring, and coordinating bank participation in club deals in the renewable sector, including wind transactions like Le Plateau (QC), Beech Ridge, Alta Wind I and South Kent (ON), and solar transactions like Avenal, biomass transactions like Gainesville. Provided financing for nearly 4,000 MW of renewable energy projects in North America since Focus on Canada : Multiple projects in Canada, including gas-fired power plants, wind farms, and infrastructure/ transportation assets. Recently hired seasoned bankers in Canada to set up a Montreal office in order to bolster presence in Canada. 4

5 Canada: Market Opportunity The penetration rate of wind energy in Canada remains low : 6,500 MW installed to date represents 3% of total capacity; This remains low compared to other markets such as Denmark (20%), Portugal (14%), Ireland (14%), Spain (11%), Germany (8%) and USA (4%). Favorable investment landscape : Diversification of regulatory risk & political risk over several provinces; Wind regime diversification; Strong PPA counterparties such as Hydro Quebec, Ontario Power Authority and BC Hydro. Upcoming financing opportunities : Quebec contracted PPAs; FIT in Ontario; Upcoming tender in Quebec. Source: Canwea- March

6 Canadian Power & Renewables Financing Market The renewable energy market has been historically financed by international banks due to their expertise and higher loan tenor capacity. Basel III would impose capital requirements for long term funding, which would lead to a reduced capacity. Canadian renewable energy project finance market is composed mainly of hydro, wind, solar PV and some biomass projects. USD millions 1,800 1,600 1,400 1,200 1, Canada Renewable Energy Transactions Closed between Bank Debt Number of Transactions Source: Infrastructure Journal Deal sizes have significantly increased in the last years with consolidation of projects and large PPA contracts awarded following provincial tenders. The long-term bank loan capacity is decreasing with institutional investors picking up the slack. However, strong bank capacity in mini-perm facilities or mid-term (up to 10 years). 6

7 Recent Transactions in Renewable Energy Borrower Capacity (MW) Sponsors Closing Amount (USD mm) Tenor (yrs) Comments South Kent (ON) 270 Pattern Energy, Samsung Comber Wind (ON) Brookfield Des Moulins Wind Farm (QC) Prince Wind Farm Refinancing (ON) Aurora Solar PV (ON) 450 De L Erable Wind Farm (QC) Recurrent Energy Solar PV Portfolio (ON) Monteregie Wind Farm (QC) Seigneurie de Beaupre 2 & 3 Wind Farm (QC) Invenergy 189 Brookfield Sharp, Mitsubishi, Osaka Gas 100 Enerfin 200 Recurrent Energy Kruger Amherst Wind Farm (NS) 31.5 Stardale/East Hawkesbury Solar PV (ON) Le Plateau Wind Farm(QC) Source: Infrastructure Journal Boralex, Gaz Metro, Valener Firelight,Sprott 27 Innergex Invenergy March 2013 Feb Dec Dec June 2012 May 2012 Dec. Nov. Nov. Aug. July May 700 C+7 Financed by Natixis within a club of 14 banks First rated wind bond in Canada Financed by three banks Underwritten by one bank Financing provided by 4 banks for the acquisition and construction of 9 PV plants Financed by a private placement C + 18 Financing for the construction of 20 solar PV projects Financing, including Euler Hermes covered tranche, provided by a club of banks Financing, including CAD260 m Euler Hermes covered tranche, provided by a club of banks Financed by lifecos 118 C + 18 Underwritten by one bank 214 C + 10 Financed by Natixis and a club of other banks 7

8 Renewable Bond Market Bond Market Historical Perspective : Historically limited to private placements (lifecos) Structured directly with clients or through dealers Long track record in hydroelectricity, more recent in wind and still in infancy for PV solar Lack of future financing flexibility (refinancing) Recent Bond Rated Issuance : St-Clair PV Solar (40 MW; NextEra) was the first rated solar bond (2012) in Canada : Rated BBB project with an spread of 297 bps over Canada Curve and a coupon of 4.88% CAD m bond with a maturity of 19 years and an average life of 9.12 years No construction risk Comber Wind (165.6 MW) was the first rated bond issuance for a wind project in Canada : Post-COD financing rated BBB A CAD 454 million issuance with a 17.5-year maturity and a bps spread Market Trends : Investor appetite willing to diversify away from PPP type projects Green effect Spread upside (around 300 bps vs. 200 bps for PPP) for risk perceived as similar and acceptable Rating constraints 8

9 Lender s Concerns Visibility: Need to have a clear view on programs, to allocate resource and capital over time Financial: Inflation, interest rates, taxes, refinancing Indexation need to freeze variations as of financial close as much as possible Hedging Structure which accommodates resource variability and downside scenarios Credit enhancement, such as ECA Adequate debt maturity; if not fully amortizing debt, credible refinancing scenario Counterparties Construction/Operations: Cost and time overruns, service delivery Capable turbine supplier Bankable TSA, EPC and O&M contracts Subcontracting to experienced contractors Fixed cost/date certain contracts Local content requirements Liquidated damages Maintenance reserve Revenue: Volume, price and operating costs Experienced equity sponsor (alone or together with local counterparts) Established turbine manufacturer and O&M Investment grade PPA counterparty Transparent legal environment with minimal change-inlaw or contract repudiation Strong political will to develop Renewable Energy Robust PPA Onsite wind measurements Experienced wind consultant and Independent Engineer Warranties from manufacturer 9

10 Contact Information Natixis New York Branch 1251 Avenue of the Americas, 5th Floor New York, NY 10020, USA Global Infrastructure and Projects New York Olivier Delay (212) Managing Director, Head of Global Infrastructure and Projects Americas Pierre Audrain (212) Managing Director Natixis, Montreal Representative Office 1800 McGill College, Suite 2811 Montreal (Qc), H3A 3J6, Canada Global Infrastructure and Projects Montreal Stéphane Carrière (438) Managing Director, Chief Representative Bertrand Guiot (438) Executive Director 10

11 Disclaimer This presentation may contain forward-looking statements and comments relating to the objectives and strategy of Natixis. Any such projections inherently depend on assumptions, project considerations, objectives and expectations linked to future events, transactions, products and services as well as on suppositions regarding future performance and synergies. No assurance can be given that such forecasts will be realized. They are subject to inherent risks and uncertainties and are based on assumptions relating to Natixis, its subsidiaries and associates and the business development thereof: trends in the sector; future acquisitions and investments; macroeconomic conditions and conditions in Natixis s principal local markets; competition and regulation. Occurrence of such events is not certain, and outcomes may prove different from current expectations, significantly affecting expected results. Actual results may differ significantly from those projected or implied by such forecasts. Natixis shall in no event have any obligation to publish modifications or updates of such forecasts. Information in this presentation relating to parties other than Natixis or taken from external sources has not been subject to independent verification, and Natixis makes no warranty as to the accuracy, fairness or completeness of the information or opinions in this presentation. Neither Natixis nor its representatives shall be liable for any errors or omissions or for any harm resulting from the use of this presentation, the content of this presentation, or any document or information referred to in this presentation. This information is provided for your information only and may not be distributed to anyone else without the express consent of Natixis. It has been prepared solely for informational and illustrative purposes and is not to be used or considered as an offer to sell, or a solicitation of an offer to buy, any security or the provisions of an offer to provide investment services in any state or country where such an offer, solicitation or provision would be illegal. Nothing in this presentation constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances. Each individual or entity who receives this document or participates in the transactions described herein shall be responsible for obtaining all such advice as it thinks appropriate on such matters and shall be responsible for making its own independent investigation and appraisal of the risks, benefits and suitability of the transactions as to itself. Any discussions of past performance should not be taken as an indication of future results, and no representation, expressed or implied, is made regarding future results. The products and services discussed in this presentation are offered by various Natixis US Corporate & Investment Banking legal entities, including but not limited to Natixis New York Branch, Natixis Financial Products LLC, Natixis Real Estate Capital LLC, Natixis Securities Americas LLC, Natixis Derivatives Inc., Natixis Funding Corp., and Natixis US Finance Company, LLC. This material is confidential and any redistribution is prohibited. 11