Agenda SMART products Market overview Sales & Marketing - - PowerPoint PPT Presentation

• SMART products
• Market overview
• Sales & Marketing
• Projected financials and planned capitalization 2013

Agenda

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Agenda

SMART Product

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• SMART kinetic zero head turbine

addresses canals and smaller rivers with as little as 2 m depth

• Built as mono- or duo-float turbine

with 5 kW generator and integrated debris protection

• Can be installed off grid or grid

connected; single or three phase, 110 V or 220 V systems

• Off grid system with minimized need

for batteries

• Easy and fast installation with

anchor stones or metal cable

• No regular preventative main-

tenance, only regular cleaning

SMART kinetic turbine with strong USP

Smart Hydro Power‘s (SHP) first reference plant close to Munich has been running since September 2011. Other permanent reference plants in Brazil, Colombia, Germany, Indonesia, Peru (currently de-installed), Switzerland.

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Easy to use, fast to install & reliable operate

The power curve is tested in SVA Potsdam (independent academic institute).

1000 2000 3000 4000 5000 6000 1 1,25 1,5 1,75 2 2,25 2,5 2,75

Papp [W] V [m/s]

Performance of generator

• Standardized units with no re-

quirements regarding technical knowledge of operator

• Installed within few hours

Generation curve at river Inn (Germany) with Smart Hydro Power‘s own plant working since April 2013 – and surviving a „500 year“ flood

• Baseload generation
• Output completely defined

by run of the river

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• Design to cost approach

with diesel for off-grid as main competitor (0,30 € / kWh)

• Grid connected photo-

voltaic becomes compe- titive with 0,17 € / kWh

• SMART hydropower most

competitive with 0,10 to 0,15 € / kWh (sites > 1.7 m/s velocity)

• SMART hydropower can be

combined with PV and / or diesel

Competitive against PV and diesel

Generation costs per kWh differ depending on velocity of the river and amortization time of the

• plant. In general the plant is designed for 10

years life cycle with no major parts that could break or do require service and maintenance.

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• SHP today the only interna-

tional competitor addres- sing rivers in emerging markets

• Only local, low tech projects

compete at same cost level – possible cooperations

• Next best competitor regar-

ding design (New Energy) doble as expensive

• Next best competitor regar-

ding market (Powerspout) not in the same market segment (small low head turbine)

Unique compared to direct competitors

Market presence in emerging markets: market presence (# of plants), design for rivers and canals Industrial Design: fabrication process, scalability, neces- sity of additional infrastructure works, costs per kWh

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SHP Industrial design Market presence emerging markets New Energy (Canada) Apro Eng. (Col) Local projects (G3, Brazil) Hydrovolts (USA) KSB (GER) Aqualibre (Austria) Seabell (Japan) Powerspout (Australia) Riverrider (GER)

Local assembling and technology transfer

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The turbine has been designed to be as- sembled in remote areas with a maxi- mum of components to be sourced lo-

• cally. Local workshops considered as

training centres for mechanical and electrical technicians.

• Main markets are emerging countries;

unit designed for easy local assembling

• Local assembling and local sourcing

brings down cost for transport, import and nationalization (“German engineer- ing made in [country]”)

• SHP is ready for local joint ventures

wherever core components can be fabricated for large local or international market (e.g. India – power electronics)

• Training of local staff as pre-requisite for

large roll-out adds value to projects

• SHP international staff has a proven

track record in intercultural co-opera- tion and trainings

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International team with engineering focus

Managing Director

• K. Kolmsee

ex E.ON sales director, 17 years in the energy sector

Sales

• C. di Sano, KAM
• F. Souza , Back Office
• J. Gomez, Colombia

international team from USA, Brazil, Colombia with strong technical background

R&D

• M. Auer, Construction
• C. Belloni, Product

Development (11.2013) perfect fit between Oxford education with first years at GE's research centre and hands on construction

Finance

Nikita Lau (1.2014) Chinese accountant with background from Hongkong based private equity company

Operations

• P. Froede, Production-Eng.
• M. Weckel, E-Engineer
• U. Tewari, E-Engineer

proven ability to combine Siemens background with hands on attitude

Logistics / Admin

• M. Reiser

translator for English, Spanish

• International team from

target markets with diverse background

• Engineering focus

with clear market and customer vision

Design to Cost as corporate task SHP is continously improving the cur- rent product and will broaden its pro- duct portfolio. The team with a mix of competences in engineering, materials / fabrication and markets allows cost leadership. The team follows a strict design to costs approach starting with a tho- rough understanding of the use a product can have in the field.

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Agenda

Market Overview

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• Electrification grade by countries

– Nigeria 50% – Indonesia rural 50% – India 70% – Peru 80 % – Brazil 85%

• Rural areas most affected
• Many rural villages along rivers as

main transport way

• Some cities (e.g. Iquitos, Peru) not

connected to central grid

• Even large cities connected to central

grid with regular black outs

• Lack of electricity has a direct impact
• n development
• Government programs for

electrification

1.8 Bn people do not have electricity

Inauguration of machinery house for inverters and batteries at Marisol, Peru. In remote areas local electrification committees or newly founded utilities are

• perating the units and responsible for

distribution of energy within the villages.

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• Countries promoting decen-

tralized generation

– Germany – Switzerland – Canada – Chile

• In other countries (USA) indivi-

duals or communities want to be independent from large utilities

• Decentralized generation reduces

costs of grid and stabilizes its

• perations
• High electricity costs in Europe at

0,20 to 0,26 € / kWh (residential)

Other regions want to change energy mix

Many countries incl. most European and some Latin American (Brazil, Chile) and Asian (India) ones do have feed in tariffs. Highest is Switzerland and lowest India. In some countries (Switzerland, Ger- many) there is already an incentive in place for grid connected plants on the low voltage line as this reduces costs for grid

• perator.

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Market by segments (prioritized by size)

– Decentralized electrification – Modular plants in canal systems (India, Pakistan, Peru) – Green electricity (grid connected) – Agricultural market (diesel driven irrigation pumps) – Mobile or temporary installations (working camps and first aid)

Billion Euro market opportunity

Market analysis based on Frost&Sullivan study on diesel generator market, PV market volume as locally published and own bottom up analysis with counting of rivers / villages in selected markets. Market study only counts for 5 kW market leaving

• pportunities for smaller and larger units to be

developed by Smart Hydro Power.

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Agenda

Sales & Marketing

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• SHP is aware of the necessity
• f a global sales approach
• Local necessity for project

development, service and maintenance („local value chain“)

• Product characteristics allow

local assembling and partly sourcing of metal parts to keep transportation and nationali- zation costs down

• SHP is a wholesale company

selling via local partners

Kinetic hydropower – „natural born global“

The market potenial is global with many still hidden opportunities in the developing world mainly Africa and Asia. Due to its uniqueness SHP already before intensive market entrance attracted inquiries from all major target countries.

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• Local value chain by partner

– Importation and sales – Final assembling – Installation, service, maintenance, local stock

• SHP focus components genera-

tor, blades, diffusor, electronics

• Existing partnership for Indonesia
• Sales partners in India; Pakistan
• Partnerships under negotiation in

Colombia, Nigeria

• Negotiations with Siemens for

Brazil

• No licensing (IP strategy)

Selected partners for larger regions

Succesful partner development in Indonesia with Power Service Indonesia (PSI) an In- donesian-German copmany transforming diesel engines to gas. PSI has aquired and implemented a first electrification project and is currently negotiating its first larger project with Indonesian mobile operator Telkomsel.

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• Seven core countries (date
• f market entrance)

– Germany (2012) – Indonesia (2012) – Colombia (2013) – India (2014) – Nigeria (2014) – China (2016) – USA (2017)

• Core countries as regional

hubs with potent partners and local stock

• Germany / Austria /

Switzerland developed by SHP via project developers

Step by step market entrance by region

South America and India / Pakistan are envisaged as largest markets with slightly different project designs: India and Pakistan with modular plants in canals and South America with electrification projects.

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Agenda

Projected financials

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• Install larger projects and

accelerate market entrance

– First modular plant (Wasserburg, Inn, 2013) – First larger electrification project (Colombia 2013)

• Develop a smart grid electrical

cabinet for remote areas allow- ing peak shaping, demand control

• Develop further products in the

same business line of kinetic hydropower and smart distribu- tion technology

SHP is ready to take the next step

• Succesfully developed its first

product and has permanent installations (beta series)

– Indonesia (Sadap village) – Germany (Inn, Isar) – Switzerland (Perlen) – Colombia (Salvajinas)

• Strong international presence in

target market

• Unique team with broad tech-

nical and market knowledge in hydropower and distribution technology Smart Hydro Power has ... Smart Hydro Power will ...

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Projected financials 2013 to 2017

• Strong growth due to local partners

with existing distribution canals

• Single highest costs personnel and

marketing

• Investments in workshop, R&D and

installation equipment

Revenue is mainly with sales partners. SHP targets a 30% gross margin with distribution costs already included. Overhead costs are mainly engineering support for partners and further R&D.

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• Short list

October 31st

• Term sheet

December 20th

• Closing

January 31st 2014

Planned financing round

Rationale

• Target EUR 3 MM
• Ecapital as co-

investor

• Current shareholders:

– Kolmsee 51% – eCapital 32% – HTGF 17%

• Accelerate market

entrance

• Allow new product

development

Volume Schedule

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