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2 Introduction Between December 2 through the 4th, three additional debates were held to further explore the findings published in the Final Report of the 3rd International Debate on Bioenergy Investment Risk Management through Business Model Innovation on October 8, 2009 in Santo Domingo, Dominican Republic. Each debate was sector specific to allow participants to focus on their own issues. The four sectors represented were as follows: 1. Public Sector 2. Financial Sector 3. Private Sector* 4. Academic Sector *The Private Sector included pioneer companies in the renewable energies industry. The following report is a comprehensive compilation of the discussions held during the three-day period. Efforts were made to include as many comments and observations as possible to provide an accurate representation. To keep in line with the progressive nature of the debates, the comments were arranged in an Action Plan format. Acknowledgment This report was prepared by Mr. Tom Kadala, President of ResearchPAYS, Inc. and edited by Dr. Virgilio Malagón Alvarez, PhD, Advisor to the President of the National Energy Commission. The events were coordinated by the combined efforts of PPAF and the CNE. The co-sponsors for this series of discussions were RJS Group, Inc. and the UN Office of Partnerships. Participants were selected based upon their industry expertise. No remuneration was offered for their time. "#"$%&'()*+,-./0& ".45%6'.+6%""6..2..( :;..2..<$#6=0>#.50.<?@#50-.4*..AB;BC "#$%&'&(&)*+,)"-./0)012) )8-./0)034).17/)9$(-:#$;<=>=&<?@A&B>CD=: E&F=6#G//

3 Overview Participants from each group agreed that an international Public-Private Consortium (PPC) could catalyze the development of a comprehensive long-term energy strategy for the DR. Rather than guessing what technologies to embrace in the years to come, the creation of the PPC would instigate breakthroughs on Dominican soil that would protect its renewable energy investment against technological obsolescence. The PPC would also position the DR at the forefront of industry innovation for years to come. By leveraging its geographic proximity to the USA, Brazil, and Europe, its land availability, and its investment-friendly energy laws, the DR could exploit best-of-breed research to broadly strengthen its internal economy and potentially become a preferred location for renewable energy field-testing research, worldwide. The Political Model The group agreed that the process for change would require an international entity optimally modeled to instigate and stimulate the change of attitudes of each sector through a one-to-one mentoring process consisting of domestic and international counterparts. The matrix below demonstrates this fundamental design. "#"$%&'()*+,-./0& ".45%6'.+6%""6..2..( :;..2..<$#6=0>#.50.<?@#50-.4*..AB;BC "#$%&'&(&)*+,)"-./0)012) )8-./0)034).17/)9$(-:#$;<=>=&<?@A&B>CD=: E&F=7#G//

4 The purpose of the Consortium is to become a player in the development of renewable energy technologies by fulfilling the growing needs of universities, research companies, and renewable energy entities world-wide with their field testing requirements for scaling their new inventions. Drawing from the established culture for tourism, the fundamental role for the DR would be to promote the opportunity, assess the technologies of interest to the DR, accommodate researchers with their respective required services (i.e. land plots, labs, personnel, seminar rooms, etc.), provide ancillary services such as a ʻonestop-express shopʼ for license requirements, permits, and job training centers for local support staff. Other services also include patent issuance/protection, licensing/royalty collection/payments and investment banking services such as securitizing a pool of promising field-testing projects for the international investment community. The Revenue Model The revenue model for the consortium will include three parts. 1. The first part will resemble that of a country club with an initiation fee (determined by the Consortiumʼs current price per share), a monthly membership charge for basic services, and usage charges for the one-stop-express business setup also called the Ventanilla Express. 2. The second part is the commercialization of proven innovations within the DR that could become a membership requirement, if a member, for example, was interested in leveraging the DR-CAFTA trade advantages for exports to Europe or the USA. Commercialized companies would be required to deposit a percentage of their sales originated in the DR into the guaranteed fund they used to launch their company. Ownership of the new domestic companies should become a topic of a future debate and could contemplate employee-ownership models to change the attitudes of the Dominican workforce. 3. The third part is sales of member services for patent licensing, specialized consulting, data mining, and grouping of experts into industry clusters. "#"$%&'()*+,-./0& ".45%6'.+6%""6..2..( :;..2..<$#6=0>#.50.<?@#50-.4*..AB;BC "#$%&'&(&)*+,)"-./0)012) )8-./0)034).17/)9$(-:#$;<=>=&<?@A&B>CD=: E&F=0#G//

5 The following flow chart illustrates the flow of activities from a one-stop-express business setup, which includes the replenishing process of a Guaranteed Fund from a successful alumni enterprise. "#"$%&'()*+,-./0& ".45%6'.+6%""6..2..( :;..2..<$#6=0>#.50.<?@#50-.4*..AB;BC "#$%&'&(&)*+,)"-./0)012) )8-./0)034).17/)9$(-:#$;<=>=&<?@A&B>CD=: E&F=3#G//

6 Launching the Public-Private Consortium (PPC) The PPC is a publicly owned entity designed to accelerate the process of innovation by effectively grouping clusters of experts worldwide and providing them with incentivedriven services that will inspire and propagate innovative ideas in the area of renewable energies. It would also become a powerful conduit to market the DR to the international community. Many ancillary benefits from increased tourism, specialized job training, and overall awareness of the DR brand will begin to appear in national economic data. The improved outlook will also reduce national debt and improve credit worthiness on an international level. In addition, the important task of changing the attitudes of so many players from seven distinct sectors will gain meaningful traction. Getting Started - The Task Force (TF) Launching the PPC would require the formation of a temporary board of directors or Task Force (TF). This TF has already been approved in the current Law but, for logistical reasons will be down-sized from the approved 22 to 5 members. The fundamental role of the new TF will not change and will continue to serve as an advisory board to the CNE. According to the CNE, members of the TF will be Minister-appointed individuals from each of the following institutions: 1. CNE 2. SEMARENA 3. IBII 4. ONAPI 5. IAD The participants suggested a 6th member, CEI-RD, due to their extensive expertise in promoting and marketing DR products and services internationally. Although the ultimate decision-making power would lie with the CNE, participants felt that the TF would need a recognized level of authority to exercise its influence effectively in the following areas: 1. To Determine the Levels of Authority 2. To Assign Responsibilities Accordingly 3. To Design Appropriate Incentive and Compensation Plans "#"$%&'()*+,-./0& ".45%6'.+6%""6..2..( :;..2..<$#6=0>#.50.<?@#50-.4*..AB;BC "#$%&'&(&)*+,)"-./0)012) )8-./0)034).17/)9$(-:#$;<=>=&<?@A&B>CD=: E&F=H#G//

7 The Function of the Task Force (TF) The role of the TF is to, promote, filter, and facilitate the activities of the Consortium as it relates to the promotion of field-testing innovation within the DR and to provide onestop-shop services to expedite approval processes. The TF should also determine appropriate land zoning issues in accordance to the scientific community taking into consideration the following: 1. Environmental impact studies 2. Cost-benefit analyses per type of technology 3. New research trends based on recently filed patents and published breakthroughs 4. Politically motivated incentive programs for renewable projects on a global level and any improvements to current revenue and business models. NOTE: Many of these activities are already being done by existing institutions such as the SEMARENA, hence, it would be the TFʼs responsibility to identify and match available resources to specific tasks. Overall the TF must constantly strike a balance between viable opportunities and national interests (i.e. food security vs fuel independence). Group participants also cited a need to improve the sharing of data among institutions. "#"$%&'()*+,-./0& ".45%6'.+6%""6..2..( :;..2..<$#6=0>#.50.<?@#50-.4*..AB;BC "#$%&'&(&)*+,)"-./0)012) )8-./0)034).17/)9$(-:#$;<=>=&<?@A&B>CD=: E&F=1#G//

8 Funding Solutions Participants unanimously agreed that serious investment capital from the financial community for renewable energy investments will require the presence of a Guaranteed Fund or Sovereign Fund to provide borrowers with long term, low interest loans and private investors with a last resort payer. The DR has used these types of funds before, to launch its tourism industry (FIDE) and its recent metro project. Participants strongly felt that a similar arrangement should be established for the renewable energy industry in the DR. The following innovative ideas for funding renewable energy projects emerged from the discussions. Plan#1 - Fix Land Values This plan calls for the annual issuance of a $10b peso government bond at a zero interest rate. Based on a ʻFixed Land Valuationʼ chart established by zones, borrowers or landowners would be automatically pre-approved to borrow needed funds for their respective operations. Similar to a credit card, borrowers would pay principal and interest monthly based on terms reflective of the length of the loan. The streamlined process would reduce the customary paperwork and increase overall efficiencies. Plan#2 Create a National Guaranteed Fund This plan would create a fund to be managed by the Consortium to generate long term, low interest loans for proven renewable energy projects. Proven projects would be determined by a weighted combined index measuring innovation potential and overall viability for commercial expansion. A designated investment bank would issue a government bond as a guarantee for its own 15-year, low interest (i.e. 5%-6%) investment bond. Investors who purchase these bonds would also receive, as an additional guarantee, the titles of the lands designated for their renewable energy projects. Loans issued for each project would be set in accordance to a schedule of projected cash flows. To attract specific types of investors, the government could include special tax-breaks. "#"$%&'()*+,-./0& ".45%6'.+6%""6..2..( :;..2..<$#6=0>#.50.<?@#50-.4*..AB;BC "#$%&'&(&)*+,)"-./0)012) )8-./0)034).17/)9$(-:#$;<=>=&<?@A&B>CD=: E&F=2#G//

9 Plan#3 - Create a Guaranteed Fund with International Banks This plan focuses the PPCʼs membership efforts to include both international banks that finance exports renewable energy-related equipment and their manufacturing clients. With this plan the manufacturer would donate 50% of the equipment cost towards an approved DR pilot project determined by the PPC. If successful, the manufacturer would participate in the expansion of the internal and external markets, hence, leveraging the PPCʼs services and the DR-CAFTA advantage. The manufactureʼs bank would agree to contribute the project cost in the form of a guaranteed fund that should include a portfolio of clients. They may reserve for example, 200 Ht for 20 years, which would include lab support, trained or to be trained personnel, legal protection, one-stop-shop expedited permits, patent services, etc. Part of the transaction could include the purchase of PPC shares that can be readily sold to outside investor groups for risk management purposes. In addition, members committed to long term transactions of this type would qualify for a seat on the board of the PPC. Plan#4 BNV, BAGRICOLA, Law , Pension Funds The creation or coordination of a Fund designed for both consumers and small businesses to promote products and services that consume less electricity. used by both consumers and small businesses. Plan#5 PPA (Public Private Consortium) The creation of a low interest rate Guaranteed Fund comprised of multi-lateral contributions. This Guaranteed Fund would be used to launch the Consortium and its projects. * Note: The BanReservas would be named the Fiduciary Bank for Plans 4 and 5. "#"$%&'()*+,-./0& ".45%6'.+6%""6..2..( :;..2..<$#6=0>#.50.<?@#50-.4*..AB;BC "#$%&'&(&)*+,)"-./0)012) )8-./0)034).17/)9$(-:#$;<=>=&<?@A&B>CD=: E&F=.#G//

10 Use of Funds Participants recommended that energy funds should focus on three principal areas: 1. Pilot Projects Viewed as a viable insurance strategy, funding pilot projects in every possible technology including biogas, ethanol, biodiesel, hydrogen, wind, solar, and others would optimally allocate limited resources to proven projects. 2. Commercialized Proven Pilot Projects Expand proven pilot projects within the DRʼs internal markets adhering from the beginning to stricter export standards. 3. Research & Development Create Cluster Groups of complimentary experts with a focused objective that collectively could become a synergistic network of professionals readily available to the PPC to address project requirements. Cluster Groups could be organized as shareholders of an entity to capture future value from collective patent developments. A Key Attitude Change Issue within the Financial Sector The Final Report of the October 8, 2009 international debate underscored the need to change the attitudes within seven sectors (see attached). Two of the seven groups were highlighted as primary targets to achieve sustainable results. These were the Dominican Politicians/Legislators and the other Dominican Bankers. Ultimately the group felt that a renewable energy strategy for the DR would initially require the political will to expand lending classification requirements to better represent bioenergy projects and to introduce legislation for the creation of sovereign guaranteed funds specifically tailored to the needs of international investments. The current banking environment in the DR is based on short term, high interest rate loans secured by land titles or similar hard asset equity. These asset-based lending options hinder rather than help the progress of renewable energy investments in the DR that would normally require long-term low interest loans secured partially or in full by projected revenue streams. Successfully transitioning from asset-based lending to revenue-based lending using internationally accepted techniques for risk assessment of long term bioenergy projects is at the heart of this issue. "#"$%&'()*+,-./0& ".45%6'.+6%""6..2..( :;..2..<$#6=0>#.50.<?@#50-.4*..AB;BC "#$%&'&(&)*+,)"-./0)012) )8-./0)034).17/)9$(-:#$;<=>=&<?@A&B>CD=: E&F=/4#G//

11 Proposed Divisions for the PPC Participants believed that the PPC should include divisions that focus on the following areas: 1. Exchange Programs For students and professors with corresponding member institutions 1. Pilot Project Research Establish parameters Coordinate research and identify areas of synergies Monitor project progress Establish and publish an Innovation and Viability Index 3. Land acquisitions and rentals 4. Job bank and training center 5. Standardization To develop standards for both product and process. 5. Intellectual property 6. Investment banking An effective organizational structure should be the subject of future debates for the TFʼs review and approval. Next Steps The BMI Team (Business Model Innovations), a creation of ResearchPAYS, Inc., would further develop the Consortiumʼs mission and purpose among its members through a facilitated debate process designed to encourage consensus. With this process every sector will participate equally and advance together efficiently by sharing their respective ideas and data. "#"$%&'()*+,-./0& ".45%6'.+6%""6..2..( :;..2..<$#6=0>#.50.<?@#50-.4*..AB;BC "#$%&'&(&)*+,)"-./0)012) )8-./0)034).17/)9$(-:#$;<=>=&<?@A&B>CD=: E&F=//#G//

12 Participant List Public Sector Wednesday, December 2, 2009 Financial and Field-Testing Sectors Thursday, December 3, 2009 Private and Academic Sectors Friday, December 4, 2009

13 Public Sector Wednesday, December 2, 2009 ORGANIZATION LAST NAME NAMES TITLES Instituto Agrario Dominicano (IAD) Pezzotti Ing. Evaristo Sub-Director Consejo Nacional para el Cambio Climático Garcia Victor Sub-Secretario INFOTEP Marrero Feliz Representante EDESUR Marte Damaris Sub-Gerente Instituto de Innovación en Biotecnología e Industria (IIBI) Rodriguez Bolivar Representante Medio Ambiente (SEMARENA) Banks Juan Pablo Representante PNUD Pena Jehova Renewable Energy Coordinator Pro-Industria Espinosa Carlos Gerente de Zona Franca SEESCYT Galarza Federico Representante ONAPI Fernandez Alexeis Examinador de patentes Cancillería Cuello Federico Embajador - Naciones Unidas PPAF Stillman David Executive Director CNE PERSONNEL LAST NAME NAMES TITLES Departamento Hidrocarburos Capriles Ing. Manuel Gerente CNE Despradel Ing. Julian Gerente Presidencia CNE Malagon Virgilio Asesor Departamento Fuentes Alternas Peña Manuel Gerente Departamento Fuentes Alternas Acevedo Ernesto Representante Departamento Fuentes Alternas Gomez Francisco Representante

14 Financial and Field-Testing Sectors Thursday, December 3, 2009 FINANCIAL SECTOR ORGANIZATION LAST NAME NAMES TITLES Banco Nacional de la Vivienda (BNV) Garrido Raymundo Gerente de Negocios RRM - Red Ruby Management Veloz Alberto Asesor Caribbean Sustainable Development Corporation Ledesma Rafael Chief Scientific Officer Interex Global Biodiesel Hispanola Ortega Miguel Abogado DaoPower Dominicana Canales Manuel Director of Development UNESP - Instituto de Quimica (Brasil)* Garcia Roberto MEG Research Colaborator Banco BHD Tineo Gabriel Asesor de Inversión Cancillería* Cuello Federico Embajador - Naciones Unidas UASD* Gomez Pedro Profesor PPAF Stillman David Executive Director FIELD-TESTING SECTOR ORGANIZATION LAST NAME NAMES TITLES Instituto Dominicano de Desarrollo Industrial (IDDI) Chotin Geronimo Presidente Inveravante Gonzalez Wilfredo Director Consorcio Tecno DEAH Bros Omar Comercializadora Los Montones Santos Edison Gerente General Biodiesel-Caribbean Weiss Ian CEO RJS Group República Dominicana* Garcia Roberto Asesor Químico al RJS Group RJS Group República Dominicana Reyes Ing. Fausto Director de Ingeniería & Operación RJS Group República Dominicana Belliard Tomás Senior Business Development Mgr RJS Group República Dominicana Veras Carlos Chairman and C.E.O. Banco BHD Tineo Gabriel Asesor Banca de Inversión Cancillería* Cuello Federico Embajador - Naciones Unidas UASD* Gomez Pedro Profesor * Rep for both Sectors

15 Private and Academic Sectors Friday, December 4, 2009 PRIVATE SECTOR ORGANIZATION LAST NAME NAMES TITLE Camera de Biocombustible de RD Fermin Ing. Nino (Alfonso) President RJS Group Reyes Fausto Director de Ingeniería & Operaciónes RJS Group Abreu Grisel Representante RJS Group García Roberto Asesor Químico al RJS Group BIOGEN Godfrey Brad President & CEO BIOGEN Rodriguez Alfonso Sales & Sustainability Director Grupo Vicini Londoño Alvaro Energía e Industria Energías Renovables CAOBA, S.A. Rodriguez Ing. Angel Director Técnico AES Dominicana Fabian Juan Carlos Gerente de Regulación Linea Clave Canalda Ing. Ricardo Representante COOPCAÑA Japa Juan Representante Cancillería Cuello Federico Embajador - Naciones Unidas PPAF Stillman David Executive Director ACADEMIC SECTOR ORGANIZATION LAST NAME NAMES TITLE Instituto de Energía de la UASD Mejia Luis Programa de Tecn. Hidrógeno y Bicomb. Sociedad de Inventores Rodríguez Doroteo Representante INFOTEP Marrero Rafael Representante