Wind Power Finance School

Part of www.greenpoweracademy.com Wind Power Finance School Wind Power An intensive and demanding 5-day course combining all aspects of wind power financing from financial modelling, project economics, financial structuring, risk mitigation and value analysis of projects. Key learning objectives: In a single week, gain a comprehensive overview of all aspects of wind power finance, from planning through to detailed modelling and analysis Introduction to the key financial terminology and principles, suitable for newcomers or non-experts in finance and specifically focused with relevance to wind power projects The opportunity to undertake detailed, practical, handson financial modelling, specific to the wind power business and suited to a range of expertise Identify the key cashflow, return and risk variables in wind projects, including the models and metrics required to measure them Understand how to develop an accurate and attractive business model for wind power projects, from conception through the phases of construction to operation Quantifying and allocating risk in wind power projects Discuss and question all aspects of the wind planning business in an informal, friendly environment, led by our independent, expert trainer Course Description For those coming new to the sector or feeling they only understand a limited part of the financial aspects of wind, this is the course to attend! Covering all aspects of wind finance from project economics, sources of finance to financial structures to risk mitigation and how this impacts project value it provides a vital and informative opportunity to focus in on what matters (and what doesn t) in the business of making money from wind power! Throughout the course, there is focus on practical examples and quantitative analysis to enhance the intense learning experience and ensure it is of practical value to attendees so bring a laptop, an inquiring mind and a willingness to get involved! All Green Power Academy courses are independently CPD certified. Who Should Attend? Senior management, Business developers, Financial planners, Market analysts, Project analysts From: Windpower investors and lenders (Private Equity, Hedge Funds, Institutional Investors, Commercial Banks, Multilateral Banks) Wind power project developers Wind power equipment, construction & service suppliers Energy policymakers and government agencies Utilities and Independent Power Producers And any others with an interest in making money within the wind power sector Course Dates: 24-28 February 2014 Course Location: London, UK Course lecturer: Christian Erich Grütte Register or enquire: www.greenpoweracademy.com enquiry@greenpoweracademy.com Tel: +44 (0)20 7099 0600

Level & Style The course presents a variety of concepts and terminology, including a number of financial principles. However all are explained in a clear, business-friendly manner accessible to those without prior financial expertise. Thus the course is ideal for anyone in the wind power business (including developers, investors and policymakers) who require a thorough grounding in the money aspects of the business: where it comes from, what it buys, where it goes, how much you can make and the risks around it. students across Europe as well as in the US, Chile, South Africa, Dubai and Brazil. He holds an MSc in Industrial Engineering and Management from the Technical University of Berlin and currently serves as a lecturer in the Renewable Energy Finance Studies Program of the Frankfurt School of Finance and Management. He also forms part of the Working Group Financing the Energiewende in Frankfurt and was one of the first members of the European Technology Platform for Wind Energy, as well as of EWEA, ACORE, LAWEA, EUBIA, ESHA and EGEC. Content is delivered throughout in an informal, interactive manner, encouraging questions and discussion Day 1 FINANCIAL MODELLING Attendees will have the chance to use pre-prepared financial models and develop them further, and take part in group discussions in order to revise and better illustrate key learning points Supporting materials you will receive: Hard and soft copies of presentation materials Excel spreadsheets and models Latest industry case studies and examples Comprehensive reading list for further study after the course A certificate of attendance Why choose Green Power Academy? Unique courses that can t be found anywhere else CPD certified Over 1250 delegates already trained Class sizes limited to ensure enough one to one time with the course lecturer Latest case studies and examples used Interactive class sessions Courses held at 4-5 star hotels in central city locations About your trainer Christian Erich Grütte Christian Erich Grütte is an independent investment & financial advisor with more than ten years experience in the renewable energy sector. He successfully supported leading utilities, IPPs and financial investors to build pipelines of international renewable energy projects by identifying suitable local partners. His specific experience includes the market entry assessment of regulatory and development risk in countries around the globe. Further, he is focused to work with independent developers to create the ability of renewable energy projects to be presented both to equity sponsors and debt lenders and reaching financial close. Christian is a recommended speaker at leading international renewable energy conferences and one of Green Power Academy s core team of executive trainers on investment and financing topics. He has delivered a range of financing courses and our acclaimed Green Power Mini-MBA programme to This day will focus on introducing the key elements of the Financial Model and how they are interlinked.best Practice of Financial Modelling will be demonstrated using various examples and how they are used in practice. DISCOUNT CASH FLOW ANALYSIS - First principles of finance: the time value of money - How to determine Discount Rate and the Cost of Capital (WACC) - The cost of equity, beta and the equity risk premium (CAPM-Approach) - Cash Flow used for Analysis versus Accrual Accounting - Structure of the Cash Flow Waterfall and identifying Free Cash Flow - How to calculate Project and Equity Net Present Value and use it? - The profitability index as an enhanced measurement to NPV - Calculating the internal rate of return (IRR) - How to utilise IRR & NPV analysis and potential problems Case work: Practice how to realise WACC, NPV and IRR calculations in Excel. BALANCE SHEET AND INCOME STATEMENT - Understanding the difference between Assets, Liabilities and Equity (Sources & Uses) - Current Assets, Long term Assets and determining Liquidity - The Capital Budgeting and Capital Structure decision using ratio analysis - Working Capital cycle and the optimal amount of debt - Difference between Income Statement and Cash Flows - How to derive from Top line revenues via EBITDA to Dividends - The Trading Account, Profit & Loss Account and Appropriation Account Case work: Analysing real balance sheets from utilities, IPPs and project companies TAXES AND DEPRECIATION - Overview of Tax incentives for renewable energies in various jurisdictions - How Investment Tax Credits and Production Tax Credits work in the US - Straight Line and Accelerated depreciation schemes and their impact

Day 1 Continued Difference between Accounting and tax depreciation using depreciation tables Identify taxable income, tax payable and tax losses Practical: Sample calculations to understand how tax incentives can help or impede renewable investment BEST PRACTICE FINANCIAL MODELLING Structuring Input Assumptions, Calculations sheets and Executive Summary in a logical way Integration of Cash Flow Waterfall, Balance Sheet, Income Statement and Sensitivity Analysis Design - the need for flexibility and robustness Importance of format, layout and presentation How to incorporate inflation and exchange rates Main functions to be used and best to be avoided, tools and tips Practical: Demonstration of various financial models, how they work and their limitations. This will include public available models such as SAM, CREST and RETScreen and other proprietary models. At the end of this day you will feel confident to look at financial statements and models and draw initial conclusions of the viability of a project. Day 2 KEY PROJECT ECONOMICS Today we will be assessing the main economic drivers of a wind project and work to understand how they are made up, vary and interlinked. Sample data and cases will demonstrate how real world projects are performing. RESOURCE ASSESSMENT & POWER GENERATION Variability and uncertainty of wind resource data over time Wiebull Distribution How wind energy varies with speed, height and comparing on & offshore wind Using power curves and wind resource data to estimate annual energy output Capacity Factor and Availability according to location and technology Uncertainties on turbine power curves and how turbine choice fit with location Sources of uncertainties, variability and how additional measurement investment can be crucial How to use one-year and ten year data for p50 up to p99 statistics to achieve bankability? How reducing uncertainties of annual energy output drives debt capacity and financial returns Practical: Example calculations on wind variations, turbine choices, measurement investment and financial impact POLICY & ELECTRICITY PRICING Overview on the various forms and elements of price incentives across jurisdictions The three key elements within the FIT scheme and how they drive debt financing terms Cat and mouse between regulators and developers from back on the envelope to market caps Day 2 Continued FIT Premiums and Contract for Difference as a measurement to control pricing and incentives How a Tradable Green Certificate scheme works and why it is not that different to FIT Assessing your two different revenues streams from electricity and certificates sales Competition within a wholesale electricity market and the Merit Order effect - - Understanding Levelized Cost of Electricity and marginal cost DEVELOPMENT MILESTONES & COSTS Key milestones in a wind power project, from scouting, through development to operation Challenges throughout development which will determine the access to funds and bankability The Gold Rush Speculation and competition for sites, grid connections and public support Development expenditures for measurement, environmental impact assessment and deposits How choosing the site and size can decide about future business success in development The magnitude of timing and delays in development and the end of year race The role of the grid operators between fatal inhibitor, enabler and competitor to your project Environmental impact and social perceptions: how to engage the local community and authorities Importance of detailed understanding of permitting and authorisation process down to local level Case study: Market entry into an emerging renewable country, from initial assessment to assembling a project pipeline by identifying and filtering suitable local partners CONSTRUCTION & OPERATION COSTS Overview of industry trends and variations of Turbine cost, CAPEX and OPEX Why learning curves are not only driving cost down Structure of Capital expenditures between Wind turbine cost and Balance of Systems costs Understanding the differences between On & Offshore wind costs The over importance of Capex cost and what drives variations between countries and projects How to assess fix and variable O&M cost and relate to availability, reliability and process efficiency How construction timing and delays have a crucial impact on financing costs - the use of contingencies Case work: Modelling the key project economics from the Jädraås Wind Onshore Farm and analysing project returns. At the end of this day you will have gained a holistic view of the key technical, political and economic drivers of a wind project and how they impact your financial model.

Day 3 EQUITY AND DEBT FUNDING Day 3 Continued Today we will analyse how to structure Wind Energy Projects to efficiently source Debt and Equity Financing. First, by understanding various types of equity sponsors and their different risk-return profile looking at wind power projects. Secondly, by understanding the Project Finance mechanics and elements and how they drive debt capacity and ultimately equity returns. STRATEGIC & FINANCIAL INVESTORS Funding sources and structures for wind projects at different project stages Investor types, strategies, project size and return on capital requirements Corporate Finance or On-balance sheet financing and their limitations The changing role of utilities within the renewable energy sector from investor to developer Private Equity and Hedge Funds and how they convert into an Independent Power Producer The sector hope on Institutional Investors and what might make them entering Renewables Community Wind Farms and Closed End funds to attract direct retail investment into projects Big Brands to invest into Renewables driven by marketing reasons Sovereign Wealth Funds and Family Offices exploring investment possibilities Real cases from various countries will demonstrate the different rationales of investors into wind power projects and that there are many ways of achieving financing. PROJECT FINANCE & DEBT CAPACITY Development of Project Finance within the Renewable Sector Leading Project Finance Banks and what they understand as being a Bankable project Project Financing structures and the difference of nonrecourse and limited recourse financing The role of the Special Purpose Vehicle in relation to the various project stakeholders and sponsor Using the Cash Flow Waterfall to calculate Cash Flow Available for Debt Service (CFADS) How the Cash Flow Prediction, the DSCR and loan tenor drives overall Debt Capacity Leveraging equity returns by gearing the equity:debt ratio Limiting factors on loan tenors in current financial markets and how government policy impact them Difference between minimum and average DSCR over the loan life of the project Calculating Loan Life and Project Life Cover Ratios and comparing them to DSCR How different Repayment structures from linear, annuity and debt sculpting adopt to a project LOAN TERM SHEET ELEMENTS Capital injections into the project, pro rata basis and timing of drawdowns Additional lenders security using grace Period, Debt Service and O&M Reserve Accounts Cash Sweeps, Cash Traps and Dividend Blockers and how they damage Equity returns Where the various elements relate to within the Cash Flow Waterfall Covenants, Securities and the concept of Sources and Uses Interest Rate, Banking Fees, Margins and Commissions applied to a Project Finance Loan Conditions Precedents - Important steps towards Financial Close and construction start RE-FINANCING & PROJECT BONDS Construction Finance as part of project financing vs corporate financing Special loan facility to bridge claimable VAT expenses from host government Equity Bridge Finance and placement guarantees within recourse finance Development of project bond financing within renewable, typical countries, sectors and sizes The rationale for project bond financing and issues around construction risk Limitations of Institutional Investors to sign Project Bonds and credit enhancement facilities All Equity investment rational compared to leveraged project finance Practical: Example calculations will introduce step by step the various project finance elements and demonstrate how they link together in a financial model. Additional case work will be conducted to assess the impact on project viability and returns. At the end of this day you should be able to participate in financial negotiations with lenders and sponsors without the need to bluff your way or turning to your colleagues for advice. Day 4 RISK MITIGATION & MULTI-TIERED DEBT Contract structures and insurance covers effectively reducing project risk to gain financial close. A similar role is taken from the Multilateral Banks and Export Credit Agencies. Today we will learn how to create a diversified funding structure with multi-tiered debt. PROJECT CONTRACTS & INSURANCE COVER Optimal risk reduction: mitigating risk throughout the project lifecycle Difficulties in signing bankable land lease agreements External advisors and Due Diligence process to achieve financial close Construction risk on time, on budget, to specifications, how to secure it? The important role of the EPC turn-key contract and why it s different in Offshore wind O&M service contract with performance guarantees to reduce reserve accounts - - Typical industrial insurances to mitigate risk Delay in Start-up, Business Interruption

Day 4 RISK MITIGATION & MULTI-TIERED DEBT Day 5 PROJECT ANALYSIS & VALUE DRIVERS OPIC s policy insurance cover against retroactive regulatory changes Product Warranties from manufacturers to guarantee future claims OFF-TAKE AGREEMENTS & DERIVATIVES Duration of feed-in tariffs driving loan tenors and debt capacity How the credit rating of the Off-taker impacts lending terms of the wind project Key elements of negotiating a bilateral Power Purchase Agreement (PPA) Difference between volume and price risk and how they can mitigate each other Using swaps and collars to reduce volatility of revenue stream and enhance debt ratios Curtailment risk and loss of revenues in a saturated grid environment Addressing Interest rate and currency rate risk with swaps MULTILATERAL BANK FINANCING Growing role and order of magnitude of MLBs lending activities Focus and rational of KfW, EIB, EBRD, World Bank Group and other main players Impact on commercial lenders to facilitate loans EIB Project Bond Credit Enhancement Initiative to spur Institutional Investor activity Increasing debt capacity by longer tenors and ultimately improving equity returns Equity investments from Multilateral banks Various case studies will demonstrate how MLBs helping the Wind Offshore projects to take-off. EXPORT CREDIT AGENCIES How export credit agencies are saving project finance OECD sector understanding on export credits for renewable energy The crucial role of EKF and Euler Hermes in financing wind project How ECAs wrapping project bonds can facilitate the entry of institutional investors intoprojects Limits of ECA on providing financing and terms ECAs as an enabler in emerging markets How higher upfront premiums can still result in reduced equity requirements Case studies from leading Multilateral Banks and Export Credit Agencies will be used to demonstrate their role. Further, participants will be rebuilding the multi-tiered debt structures with a financial model to understand the impact on overall project ratios. At the end of this day you will gain insight into how to mitigate project risk by structuring key project contracts, insurance covers and subordinated loans. Day 5 PROJECT ANALYSIS & VALUE DRIVERS The final day of the course will be dedicated to putting the pieces together and understanding where and how the biggest value drivers are reacting to changes in our technical, economic and financial assumptions. We also have a look into the future and discuss potential business models and challenges for wind energy. SENSITIVITY & SCENARIO ANALYSIS Base Case, Downside and Worst Case scenarios applying CAPEX, OPEX and Revenue variations How lenders interprete the Break-Even and Cash Sweep Analysis on the project Using tables, tornado, spider diagrams for various scenarios Identify main risk and value drivers within a project How to and how not to use sensitivity analysis for financial structuring Sample exercises and case studies to demonstrate the sensitivities and impact on wind power financing. GOVERNMENT AUCTIONS & MERCHANT POWER Experience and differences with government auctions and tenders in Europe, Africa and America Calculating LCOE of electricity as a basis for preparing a bid Difference between sealed-bid and descending clock auctions Local content or consortia requirements as a means for job creation and knowledge transfer Commercial wind power on brown-field sites and merchant power projects A competing group work exercise where you will be asked to prepare a bid and participate in a fictitious government auction process. Present your project and defend your assumptions and approach in structuring the financial solution. Be sure, that it is not only the lowest bidding price who will win the tender! WIND PROJECT TRANSACTIONS Typical lifecycle of a wind power project from development to asset sale The problem in assessing the value of projects under development and pipeline Understand how operating wind projects are valued in the market and how they should be How to choose from a long list of potential buyers of wind projects and which criteria to use Structuring a transaction process and filtering down to a final Short List Auction process in selling wind projects Best practice Preparation of the Information Memorandum Case Study of a project transaction using a real Information Memorandums of a Wind Onshore project CONCLUSIONS & OUTLOOK Financial market regulation Basel III and Solvency II impact on wind power financing Wind project embedded into country and off-taker credit ratings Distributed power generation, off-grid solutions and new wind technologies Future requirements of wind power integration into electricity grids a threat? Climate policy was yesterday electricity demand growth as future driver for wind power Wind supply chain between regional bottlenecks and oversupply Lack of capital or lack of quality projects? Islamic Finance, Asian funds and crowd funding You will leave this week with a solid understanding of how to drive the key technical, economic, political and legal elements in order to finance wind power projects and optimise value. This should enable you not only to leverage your role within the wind industry better, but also that of your colleagues, clients and suppliers.

Wind Power Finance School An intensive and demanding 5-day course combining all aspects of wind power financing from financial modelling, project economics, financial structuring, risk mitigation and value analysis of projects. Overview of the course DAY 1 DAY 2 DAY 3 DAY 4 DAY 5 9am-4pm Financial Modelling Key Project Economics Equity & Debt Funding Risk Mitigation & Multi-tiered Debt Project Analysis & Value Drivers Discounted Cash Flow Analysis Resource Assessment & Power Generation Strategic & Financial Investors Project Contracts & Insurance cover Sensitivity & Scenario Analysis Taxes & Depreciation Policy & Electricity Pricing Project Finance & Debt Capacity Off-take agreements & Derivatives Government Auctions & Merchant power Balance Sheet & Income Statement Development Milestones & Costs Loan Term Sheet Elements Multilateral Bank Financing Solar project transactions Best Practice Modelling Construction & Operation costs Re-Financing & Project Bonds Export Credit Agencies Conclusions & Outlook (NB. Agenda detail & timings can be subject to minor change, where this is deemed to improve course delivery) Course Details London, UK: 24-28 February 2014 = 4499 + VAT @ 20% Group discounts are available, please contact us. Register or enquire: www.greenpoweracademy.com enquiry@greenpoweracademy.com Tel: +44 (0)20 7099 0600 About us: Green Power Academy was started in 2008 in order to address the shortfall in basic market information for organisations and individuals involved within the renewable energy industry. Since 2008 we have trained more than 1250 satisfied customers.! Our approach: after extensive market consultation we bring together topic researchers and professional business trainers to develop interactive courses, which directly address the business needs of our customers! Green Power Academy is part of Green Power Conferences; the market leader in renewable energy conferences. Since 2003, over 22,000 delegates from over 152 countries have attended over 400 conferences, exhibitions, workshops and training courses providing strategic business intelligence to the renewable energy and sustainability industries. Tailored, bespoke and customised training with our in-house training service We can create a training course to meet your specific needs We can deliver the course anywhere in the world You choose when the course is delivered You can train more staff for less cost You spend less time out of the office