COMPANY PRESENTATION UBS Asia Energy, Chemicals and Utilities - - PowerPoint PPT Presentation

COMPANY PRESENTATION

UBS Asia Energy, Chemicals and Utilities Conference 2015 Hong Kong, November 17, 2015

This presentation contains certain “forward looking statements.” These forward looking statements include words or phrases such as EDC or its management “believes”, “expects”, “anticipates”, “intends”, “plans”, “foresees”, or other words or phrases of similar import. Similarly, statements that describe EDC’s objectives, plans or goals also are forward-looking statements. All such forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Such forward looking statements are made based on management’s current expectations or beliefs as well as assumptions made by, and information currently available to, management. EDC does not make expressed or implied representations or warranties as to the accuracy and completeness of the information contained herein and shall not accept any responsibility or liability (including any third party liability) for any loss or damage, whether or not arising from any error or omission in compiling such information or as a result of any party’s reliance or use of such information. The information and opinions in this presentation are subject to change without notice. This presentation does not constitute a prospectus or other offering memorandum in whole or in part. Information contained in this presentation is a summary only and is prepared for discussion purposes and is not a complete record of the discussions. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any security. There shall be no sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification under securities laws of such state or jurisdiction. By receiving this presentation, each investor is deemed to represent that it is a sophisticated investor and possesses sufficient investment expertise to understand the risks involved. Prospective investors should undertake their own assessment with regard to their investment and they should obtain independent advice on any such investment’s suitability, inherent risks and merits and any tax, legal and accounting implications which it may have for them.

DISCLAIMER

CONTENTS

What We Are Doing Risk Factors in the EDC Value Chain Where We Are Key Takeaways

14 The EDC Value Chain, 15 Resource Development, 16 Fluid Handling, 17 Energy Conversion, 20 Market Forces & Competition, 21 Growth 24 Resource Development, 25 Fluid Handling, 26 Energy Conversion, 30 CAPEX requirement, 31 Market Forces, 32 Growth , 35 Dividend Declaration, 36 Financial 8 Strategic Focus, 9 Business Model, 10 Contract Tenor, 11 Volatile Earnings, 12 Risk Factors & Initiatives

WHERE WE ARE

8 Where We Are

TODAY EDC IS A DIVERSIFIED RENEWABLE ENERGY COMPANY – 100% OF ITS INVESTMENTS ARE IN THE PHILIPPINES

150.0 MW Burgos 4.16 MW Burgos 120.0 MW Pantabangan 12.0 MW Masiway 120.0 MW Bacman I 20.0 MW Bacman II 112.5 MW Tongonan 112.5 MW Palinpinon I 60.0 MW Palinpinon II* 125.0 MW Upper Mahiao 232.5 MW Malitbog 180.0 MW Mahanagdong 50.9 MW Optimization 49.4 MW Nasulo 52.0 MW Mindanao I 54.0 MW Mindanao II

Note: *20 MW Nasuji Power Plant placed on preservation

1 1 1 2 3 1 3 2

Wind Hydro Solar Geothermal (EDC Subsidiary) Geothermal (Integrated)

1

1 1 1 2 3 3 2 1 1

STRATEGIC FOCUS BEFORE 2007 TODAY

TECHNOLOGY 1,149 MW Geothermal*

1,169 MW 132 MW 150 MW 4.16 MW Geothermal** Hydro Wind Solar

CUSTOMERS NPC

NPC Electric Cooperatives Distribution Utilities Large Industrial Clients NGCP

BUSINESS MODEL

Power Purchase Agreements Power Purchase Agreements Wholesale Electricity Spot Market Ancillary Services Provider Feed-in Tariff

DOMICILE

Philippines Philippines Indonesia Chile Peru

* Steam field only ** Steam field & Power Plant NPC – National Power Corporation NGCP – National Grid Corporation of the Philippines

EDC IS THE LARGEST VERTICALLY INTEGRATED GEOTHERMAL COMPANY GLOBALLY

9 Where We Are

EDC’S BUSINESS MODEL POSSESSES STABLE AND PREDICTABLE CASH FLOWS

Transco Electric Cooperatives/ Third party customers

Subsidiaries

• f EDC

National Power Corporation

Power Supply Agreements (PSAs) Power Purchase Agreements

Steam Sales Agreements (SSA)

Bac-Man Geothermal

Geothermal Resources Sales Contracts (GRSC)

Green Core Geothermal FG Hydro

Electricity Cashflow Electricity Cashflow

Electricity & Ancillary Svcs.

Cashflow Steam

Cashflow or Dividends

Steam

Cashflow or Dividends

Dividends

Burgos Wind

Electricity Cashflow Dividends

Power Supply Agreements Power Purchase Agreements (PPAs)

Electricity Cashflow

Solar

Electricity Cashflow

Geothermal

% of Consolidated Revenues (1) USD Linkage

Electricity 37% 73%

Sovereign off-take

Electricity 58% 0%

Commercial off-take

Electricity 5% 60%

Feed-in-Tariff

(1) As of Sept 30, 2015

Customers

Cashflow Energy Flow

10 Where We Are

EDC’S EXPOSURE TO THE SPOT MARKET PRICES IS ONLY 12%

(1) Consolidated revenues as of September 30, 2015

TERM STRUCTURE OF CONTRACTS(1) In PHP Millions

SPOT 1-2 YRS 3-5 YRS 6-10 YRS 11-20 YRS >21 YRS WESM

12%

• NGCP
• 2%
• DU
• 12%

5% 11% 5% 12%

NPC

• 36%
• TRANSCO
• 5%
• 88%

revenue from long-term contracts

69%

revenue from contract tenors

• f >6 yrs

45%

expanded revenue base from commercial clients

11 Where We Are

HOWEVER, EARNINGS HAVE BEEN VOLATILE

2007-2014 (CAGR)

Revenues 7.2% EBITDA 8.2% NI 4.5%

REVENUES EBITDA NI

1 Recorded foreign exchange losses (Php9.4B) and higher interest expense (Php552.4M) on foreign loans brought about by the peso depreciation and yen appreciation

against the US dollars

2 Recorded a non-cash impairment of Php5.0B on NNGP and Php1.2B of foregone steam revenues resulting from EDC’s acquisition of the Bacman power plants 3 Lower revenues (Php2.7B) mainly from ancillary services and impairment of PPE due to typhoon Yolanda (Php0.6B) 4 Twelve trailing months

TTM4 TTM4 TTM4

Bacman failure

(2012-2013)

Typhoon damage3

(2013-2014)

Tongonan/ Upper Mahiao Outages

(2015)

NNGP impairment2

(2009-2011)

JPY overhang1

(2009-2011)

12 Where We Are

WE HAVE CLEAR ACTION PLANS TO REDUCE/ELIMINATE VOLATILITY

Power plants: “Midlife” stage brings about reliability issues Geography: Project sites are situated along the “typhoon” belt Market: Margin squeeze due to low commodity prices Geothermal Resource: Natural decline of reservoir pressure Geothermal Growth CAPEX: Significant amounts required upfront FCRS: Mountainous location exposes infrastructure to potential landslide risk Retrofit aging plants to enhance

• verall reliability

Typhoon proof critical power plant components Re-negotiate expiring contracts to preserve revenue base Advanced technologies drive company’s replacement well drilling strategy Expand to FiT-supported technologies and access multi-lateral financing to mitigate exploration risk Institute a proactive landslide mitigation strategy

RISK FACTORS INITIATIVES

 Power plant rehab CAPEX  Typhoon proofing CAPEX/OPEX  Mitigate margin squeeze  Maintenance CAPEX  Domestic growth  Typhoon proofing CAPEX/OPEX

IMPACT

RISK FACTORS IN THE EDC VALUE CHAIN

14 The EDC Value Chain

EDC HAS EXPERTISE ACROSS THE ENTIRE GEOTHERMAL VALUE CHAIN Resource Development Fluid Handling Energy Conversion ACTIVITIES

ENERGY SALES

PROCESSES IN THE GEOTHERMAL VALUE CHAIN

Surface Exploration Well Drilling Well Testing Pipeline Maintenance Separator Vessel Maintenance Power Plant Construction Turbine Retrofit

15

RESERVOIR MANAGEMENT PRACTICES AND NEW WELLS ADDRESS PRESSURE DECLINE

The EDC Value Chain: Resource Development

Note: Natural decline of geothermal reservoir output results from …  Reservoir processes, i.e., RI returns, field wide pressure drawdown  Scaling and/or mineral deposition inside the well bore

MW

GEOTHERMAL STEAMFIELD LIFE CYCLE

in php bn

2012 2013 2014 YTD Sept 2015

REVENUES 28.4 25.7 30.9 25.3 CASH OPEX 10.8 10.0 12.9 10.9 EBITDA 17.6 15.6 17.9 14.4 EBITDA MARGIN 62% 61% 58% 57% MAINTENANCE CAPEX 3.7 4.3 3.9 4.4 ADJUSTED EBITDA* 13.8 11.3 14.0 10.0 ADJUSTED EBITDA MARGIN 49% 44% 45% 40% TOTAL MAINTENANCE CAPEX 3.7 4.3 3.9 4.4 MAINTENANCE CAPEX / REVENUE 13% 17% 13% 17%

Note: *Adjusted EBITDA is defined as EBITDA less capital expenditure for the maintenance of the producing assets.

4 Wells 3 Wells 4 Wells 5 Wells 2 Wells

16

OUR STEAM GATHERING FACILITIES ARE EXTENSIVE AND FROM TIME TO TIME ARE SUBJECTED TO NATURAL HAZARDS

COVERAGE OF GEOTHERMAL CONTRACT AREA

Project Site/Area (has) Comparable City/Area (has) BacMan (27,389) Cebu City (31,500) Unified Leyte (124,959) Rizal Province (117,600)

• So. Negros (64,299)

Metro Manila (63,860) Mindanao (6,229) Caloocan City (5,580)

VULNERABLE TO HARSH WEATHER CONDITIONS

Road at 1R10 Spillway Hazard: Roadslip At risk: People 503 Road Hazard: Landslide At risk: 14MW After Typhoon Amang After Typhoon Seniang 208 Road Entry Hazard: Landslide At risk: ~30MW The EDC Value Chain: Fluid Handling

17

PLANT AGE, in years

END OF DESIGN LIFE (HIGH) END OF DESIGN LIFE (LOW) END OF DESIGN LIFE (BASELINE)

OUR POWER PLANTS ARE AT MIDLIFE STAGE AND REQUIRE SUBSTANTIAL CAPEX FOR IMPROVED RELIABILITY

The EDC Value Chain: Energy Conversion

OUTAGE RATE

*As of September 30, 2015

18

Unit No. OUTAGE Duration Nature

Tongonan Unit 2 Mar 7 - Jul 7 Turbine Rotor Problem Malitbog OEC7 Jan 1 – Mar 24 Jul 18 – Sept 28 PMS Generator Problem Bacman Unit 3 Mar 5 – Apr 8 Lube Oil Leak Mindanao I Jul 12 – Aug 11 Aug 17 Generator Problem

UNPLANNED OUTAGES ARE THE BIGGEST CONTRIBUTORS OF OPPORTUNITY LOSS THIS YEAR

The EDC Value Chain: Energy Conversion

808.4MW <5% Outage 360.4MW >5% Outage

288.4MW Leyte 20MW Bacman 52MW Mindanao

MW vs. Outage Rate

19

THREE OF OUR FOUR GEOTHERMAL FIELDS ARE LOCATED ALONG THE TYPHOON BELT

The EDC Value Chain: Energy Conversion

1 2 3

PHILIPPINE WIND ZONE MAP

2 1 3 4 5

ZONE I B (V=250 KPH)

Bacman Geothermal

ZONE II (V=200 KPH)

Burgos Wind Leyte Geothermal

ZONE III A (V=150 KPH)

Mindanao Geothermal

• So. Negros Geothermal

Typhoon “Yolanda” Leyte Cooling Tower Typhoon “Glenda” Bacman Unit 1 Cooling Tower

4 5

In php Mn

TYPHOON RESTORATION EXPENSES

Note: Major Typhoons – Sendong (2011), Yolanda (2013) and Glenda (2014)

20 Market Forces and Competition

WEAK COMMODITY PRICES EXPOSE OUR UNCONTRACTED CAPACITY TO LOWER MARGINS WHICH PROMPTS EDC TO SELECTIVELY POSTPONE GROWTH UNTIL TARGET RETURNS ARE ACHIEVED

HISTORICAL COAL AND OIL PRICES

(2008-2015, in US$)

CONTRACTED VS. WESM/EXPIRING CONTRACT

USD

EDC WACC

Source: Bloomberg

21 Growth

GEOTHERMAL EXPANSION OPPORTUNITIES TAKE TIME TO DEVELOP AND REQUIRE SIGNIFICANT CAPEX UPFRONT

ACTIVITY Desktop survey Permitting / EIS Go / No Go decision Infrastructure, exploration well drilling Go / No Go decision Development/ Production drilling Go / No Go decision Construction COMMISSIONING

Bar length represent duration in years. Total years: 9 - 11 COST-RISK DIAGRAM FOR GEOTHERMAL DEVELOPMENT (100 MW PROJECT)

CONDUCT PRELIMINARY STUDIES ASSESS COMMERCIAL VIABILITY SHORTLIST CLASS A SITES PURSUE ONLY “TOP TIER”

METHODICAL APPROACH

WHAT WE ARE DOING

24

CONTINUOUS TESTING OF NEW DRILLING TECHNOLOGIES UNDERLIE HIGHER THAN TARGETED OUTPUT FOR NEWLY DRILLED WELLS

Reaching Target Depth

(2011 onwards) OBJECTIVE

ROP Improvement

(2014 onwards)

Formation Evaluation

(2014 onwards)

TECHNOLOGY

• High Strength Drill Pipe
• Well Design Software
• Pre-installation of Surface Casing
• Formation Evaluation Tool
• Mud logging
• Advancement in bit technology
• Use of mud motor
• Air drilling
• Dual liners

71%

10 wells

65%

12 wells

72%

9 wells

93%

15 wells

184%

5 wells

54 wells total

Rate of Penetration in m/day 46 45 55 45 Cost per Meter 78,051 79,971 84,087 110,046 Number of Days 59 54 48 62

151%

3 wells MW What We Are Doing: Resource Development

25

EDC CONTINUALLY INSTITUTES MEASURES TO ENSURE ITS GEOTHERMAL INFRASTRUCTURE REMAIN RESILIENT AGAINST EXTREME WEATHER EVENTS

PLAN VIEW

PAD 409 PAD 403 OLD ROAD NEW ROAD LANDSLIDE

• Pipeline re-routing

(P246.9M)

• Hazard: Landslide
• Impact/Value at Risk:

~11.5MW Gen Loss

BEFORE Old road to Pad 403 New re-routed road to Pad 403 AFTER DURING IMPLEMENTATION AFTER BEFORE

• Construction of Masonry

Wall (P10.7M)

• Hazard: Road Slip
• Impact/Value at Risk:

~125MW Gen Loss

Marshalling Marshalling Landslide Diversion

PLAN VIEW

Old drainage outlet

New drainage outlet (opposite old)

AFTER BEFORE

• Drainage Re-routing &

Construction of Slope Canal

• Hazard: Landslide
• Impact/Value at Risk:

425MW

What We Are Doing: Fluid Handling

403 ROAD Near Pad UM-C MARSHALLING STATION

26

Costs Benefits TONGONAN REHAB PHASE II: Php4.3Bn

ATTAINING GENERATION TARGETS REQUIRE SUCCESSFUL IMPLEMENTATION OF BOTH TYPHOON RESILIENCY AND EQUIPMENT RELIABILITY UPRATING INITIATIVES RETROFIT

Php968Mn

UPRATE

Php789Mn

RELIABILITY

Php2,581Mn

Mitsubishi for Turbine Retrofit* Transformer, Busbar, Cooling Tower (Php196Mn) Mitsubishi for Generator Rehabilitation* (Php593Mn) Control System Integration – Tongonan* (Php258Mn) Balance-of-Plant Reliability Enhancements (Php2,323M) *Projects with Notice to Proceed

CAPACITY (MW) FORCED OUTAGE RATES REVENUES (EST.) YTD 2015 1% Δ

3 x 37.5 24.2% Php 46.8 Mn Php 1,085.8 Mn 3 x 3.5*

• 433.0 Mn

*incremental capacity from improved engineering design

2.8 Years

Payback Period (est.)

TONGONAN

32 YEARS OLD

(STATUS QUO)

70.6%

UTILIZED

74.4%

AVAILABLE

75.8%

RELIABLE

What We Are Doing: Energy Conversion

PALINPINON I TURBINE RETROFIT ALREADY PROGRAMMED FOR 2017 AS UNITS ARE DEEMED AT THE END- OF-DESIGN LIFE EVEN AS ITS REPORTED RELIABILITY IS CURRENTLY HIGH

19.0 %

Internal Rate of Return

27 What We Are Doing: Energy Conversion

WITH THE COMPLETION OF THE BACMAN RETROFIT PROGRAM IN 2015, ALL OPERATING PARAMETERS HAVE IMPROVED

* Note: Planned Outage Period to Complete Refurbishment with the installation of the New Toshiba Rotor on Unit 1 Not Included in Availability Data. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 21.58 28.88 42.87 12.91 41.02 62.86 37.20 82.90 68.41 94.60 95.62

2013 2014 YTD 2015

Gross Capacity Factor, % 28% 58% 95% Reliability Factor, % 38% 81% 93% Net Generation (gWh) 319 672 776 gWh

Net Generation (gWh)

• Ave. for the quarter

28

INSTALLATION OF TYPHOON RESISTANT COOLING TOWER COMPONENTS AT LGBU & BGBU WILL SUBSTANTIALLY BE COMPLETED BY END 2015

2015 2016 JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV

TONGONAN

UNIT 1 UNIT 2 UNIT 3

BACMAN

UNIT 1 UNIT 2 UNIT 3

MAHANAGDONG

UNIT 1 UNIT 2 UNIT 3

MALITBOG

UNIT 1 UNIT 2 UNIT 3

MODIFIED REINFORCED

~233 kph ~300 kph ~200 kph or less

CURRENT DESIGN MODIFIED AND REINFORCED DESIGN

CURRENT What We Are Doing: Energy Conversion

29

VARIOUS POWER PLANT STRUCTURES ARE ALSO BEING REINFORCED TO WITHSTAND 300 KPH WINDSPEED

CONVERSION OF CONTROL ROOM TO BUNKER-TYPE DESIGN

BM1 PALAYAN CONTROL ROOM

INSTALLATION OF INTERMEDIATE SHORING ON ROLLUP DOORS

BM1 PALAYAN POWER HOUSE ADMIN COMPLEX BUILDINGS

INSTALLATION OF ADDITIONAL PURLINS

What We Are Doing: Energy Conversion

TOP PRIORITY Cooling Towers  Structure  Fan Stacks Power Plant Buildings  Control Rooms  Electrical Rooms  Power House  Warehouses Roads & Pads Office Building

30

INVESTMENTS SHIFTED TOWARDS PROTECTING THE CORE BUSINESS

What We Are Doing: CAPEX Requirement

in PHP millions

2016 2017 2018 2019 2020 2021 Growth 2,136 11,376 635 664 757 7,275

Local Geo Growth

1,3961 3,2811

• Wind Growth2
• Solar Growth2

83

• International

732 8,0954 6354 6644 7574 7,2524

Existing 9,743 6,294 6,452 4,973 3,279 4,747

Steam field

2,530 3,098 5,101 4,651 2,985 4,405

Power Plant

7,2135 3,1956 1,3516 322 294 342

Total Capex 11,879 17,670 7,087 5,637 4,036 11,999

1 31MW Bacman 3 2 Wind and solar growth projects depend on the new government’s policy for Feed-in-tariff (FIT) 3 2.6MW Burgos Solar 4 International Projects on hold pending improvements in economics 5 Tongonan 1 Rehab Phase 2 6 Palinpinon 1 Rehab

31

GCGI’S CONTRACT REPRICING IS IMPERATIVE GIVEN ADVERSE MARKET CONDITIONS

1 As of November 30, 2014 2 As of January 31, 2015

CONTRACT REPRICING SUCCESSFULLY PRESERVED GCGI REVENUES OVER THE NEXT 5 TO 10 YEARS, INSPITE OF PHP800M IN FOREGONE REVENUES AT THE ONSET

3.6x increase

weighted ave. contract life

4.27 yrs

vs.

15.36 yrs

What We Are Doing: Market Forces MW MW

GCGI CONTRACT REPRICING

32

ADDITIONAL GROWTH OPPORTUNITIES FOR WIND AND SOLAR ENERGY DEPENDS ON THE NEW GOVERNMENT’S POLICY FOR FEED-IN-TARIFF (FIT)

EDC Burgos 150 MW NLREC Caparispisan 81 MW Northwind Bangui 19 MW Trans-Asia Guimaras 54 MW PetroEnergy Nabas 50 MW Alternergy Pililia 54 MW

200 MW

1st Target

200 MW

2nd Target MW

Php 8.53/kWh

Feed-in-Tariff

Php 7.40/kWh

Feed-in-Tariff

Operating 111 MW Commissioning or Advanced Stage 159 MW Unallocated 230 MW

50 MW

1st Target

450 MW

2nd Target

Php 9.68/kWh

Feed-in-Tariff

Php 8.69/kWh

Feed-in-Tariff

MW

Project MW SOLEQ – Cadiz, Negros 130 SACASOL 1C/1D – San Carlos, Negros 23 Cosmo Energy – Miagao, Iloilo 6 TOTAL 159 Project MW San Carlos Project Phase I-A 13.00 San Carlos Project Phase I-B 9.00 Pampanga Project 10.00 Burgos Project Phase I 4.10 Cavite Economic Zone Project 41.30 Ormoc Project 30.00 SM North Project 1.50 TOTAL 108.90 What We Are Doing: Growth

Wind Energy Projects Solar Energy Projects

33

EDC IS UNDERTAKING EARLY START WORKS FOR BACMAN 3

Project Capacity 2 Mainit-Sadanga (Mt. Province) - 2023 80 MW 3 Kalinga (Kalinga Province) - 2021 120MW 4 Cagua-Baua (Cagayan) - 2023 45 MW 5 Buguias-Tinoc (Benguet/Ifugao) - 2023 60 MW 8 Daklan (Benguet/Nueva Ecija) - 2023 60 MW 11 Mt. Natib (Bataan) - 2022 40 MW 12 San Juan (Batangas) - 2023 20 MW 13 Mabini (Batangas) - 2022 20 MW 15 Montelago (Oriental Mindoro) – 2022 40 MW 18 Southern Bicol (Sorsogon) 40 MW 19 West Bulusan (Sorsogon) 40 MW 21 Mandalagan (Negros Occidental) 20 MW 22 Biliran (Biliran) 50 MW 23 Lakewood (Zamboanga del Norte) 40 MW 24 Ampiro (Misamis) 30 MW 25 Balatukan-Balingasag (Misamis) 20 MW 26 Mt. Zion (Davao del Sur) 20 MW Project 1 Sal-lapadan-Boliney-Bucloc-Tubo (Abra) 6 Cervantes (Mt. Province) 7 East Mankayan (Mt. Province) 9 Negron-Cuadrado (Zambales/Pampanga) 10 Mariveles (Bataan) 14 Mt. Puting Lupa (Laguna) 16 Tayabas-Lucban (Tayabas, Quezon) 17 Tiaong (Laguna/Quezon/Batangas) 20 Iriga (Albay & Sorsogon) 26 Mt. Zion 2 (Davao del Sur) 27 Mt. Talomo-Tico (Davao del Sur) 28 Mt. Sibulan-Kapatagan (Davao del Sur) 1 2 3 4 5 6 7 8 9 10 11 12 13 17 14 16 15 20 18 19 21 22 23 24 25 26 27 28

COD - 2020 AND BEYOND COD - NOT INDICATED 31 MW Bacman 3 2018

Developer

Energy Development Corporation Pan Pacific Power Phils. Corp. Basic Energy Corp.

Source: Department of Energy

AP Renewables, Inc. Clean Rock Renewable Energy Resources Corp. Others

What We Are Doing: Growth

34

WHILE NEAR TERM ECONOMICS ARE CHALLENGING, INTERNATIONAL REMAINS THE KEY TO EDC’S LONG TERM PLANS

Prospect Temp (deg C) Resource Probability Area (km2) MWe Achumani Project (Peru) 250-320 P90 7 70 P50 26 260 P10 70 700 Quello Apacheta Project (Peru) 220-240 P90 6 55 P50 17 168 P10 49 487 Tutupaca Project (Peru)*

*Under EDC application

220-290 P10

• P50

27 270 P10 40 400 Mariposa Project (Chile) 250-290 P90 10 35 P50 15 105 P10 21 280

Achumani

(10,800has)

Pinchollo Libre

(10,800has)

Quello Apacheta

(12,600has)

* Peru: Achumani and Quello Apacheta (from HRL acquisition) and Pinchollo Libre (From Alterra JVA) Chile: Laguna del Maule and Pellado (both comprise the Mariposa project from Alterra JVA)

Company (Entry into LatAm) Granted Sites* Applications Peru Chile Peru Chile JV with Alterra Power Corp 1 2 8 Acquisition of Hot Rock Ltd 2 3 EDC Applied/Bid Sites 4 4 TOTAL 3 2 15 4

Pellado

(16,000has)

Laguna del Maule

(4,000has)

Peru

What We Are Doing: Growth

35

DIVIDEND POLICY IS TO DECLARE 30% OF PRIOR YEAR’S RNI

Dividend Policy Statement

At or about 30% of previous year’s Recurring Net Income subject to i) debt service requirements and loan covenants, and ii) the implementation of business plans, operating expenses, budgets, funding for new investments and acquisitions, appropriate reserves and working capital. PHP/share 0.099 0.27 0.125 0.120 0.160 0.140 0.160 0.200 0.210 Yield 1.7% 4.4% 3.3% 2.4% 2.7% 2.4% 2.6% 3.1% 3.8%

* Based on closing price as of March 6, 2015

What We Are Doing: Dividend Declaration

36

DELIBERATELY MANAGING FINANCIAL RISKS

What We Are Doing: Financial

PROJECT FINANCE NEW PROJECTS LOANS BY REPAYMENT SCHEDULE 87% LOANS BY INTEREST RATE LOANS BY INTEREST RATE Predominantly fixed debt matches the nature of energy projects Shift to amortizing loans smoothens lumpy principal payments 50% Series of refinancing initiatives lowers average borrowing cost Will project finance new ventures starting with

EBWPC •

GCGI • BGI •

Allows projects to be appraised on a stand-alone basis

Php 8.5B

2015

Php 5.0B

2015

USD 315.0M

2014

37

DEBT RATIOS ARE COMFORTABLY WITHIN COVENANTED FINANCIAL RATIOS

CURRENT RATIO DEBT TO EQUITY NET DEBT TO EBITDA(1) DEBT SERVICE COVERAGE RATIO(2)

Notes: Ratios are computed based on Parent Company financial statements (1) EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortization (2) Debt Service Coverage Ratio = Net Cash flow from Operating Activities / (Short Term Debt + Long Term Debt + Projected Interest Service for the next 12 months)

3.6 times 1.0 times 2.3 times

What We Are Doing: Financial

High liquidity to meet short-term obligations Well within our targeted 3.6 times Allows headroom for additional debt financing Strong ability to produce cash to cover debt payments 1.2 times

38

VARIOUS INITIATIVES HAVE BEEN UNDERTAKEN TO INSULATE EDC FROM SWINGS IN NET INCOME

What We Are Doing: Financial

LOANS BY CURRENCY Eliminated JPY exposure starting 2011 USD EXPOSURE

300 Reg S Bonds 300 175 Club Loan 114 80 Club Loan 77 Cash 41 $ Linked Revenues 107 CCS 81 Uncovered Portion 262 Significant portion of USD obligation remain exposed to currency fluctuations

LONG TERM FINANCING EXPOSES EDC TO FOREIGN EXCHANGE RISKS

US$ linked revenues can cover debt service requirement except for 2021 maturity REALIZED FX GAINS OR LOSSES

*As of September 30, 2015

KEY TAKEAWAYS

40 Key Takeaways

KEY TAKEAWAYS

 EDC faces challenges in the different facets of our operations and this has resulted to

volatile financial performance

 EDC proactively addresses underlying risk factors that fuel earnings volatility …

• Invest in both typhoon resiliency and equipment reliability uprating initiatives to

deter operational upsets

• Deliberately manage financial risks by entering into project financing for new

investments, hedging of US Dollar debt, and refinancing bullet maturities to amortizing type loan

• Leverage off drilling technologies to attain higher than targeted well output for

newly drilled wells

 EDC remains comfortably within debt covenant ratios despite the increase in

leverage

 EDC will defer some CAPEX-intensive growth projects and focus investments on its

existing asset base to boost output and improve reliability and cash generation

 EDC remains committed to grow its geothermal business overseas  EDC will continue to pay cash dividends to its shareholders

END OF PRESENTATION

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