EDC COMPANY PRESENTATION JANUARY 2015 DISCLAIMER This presentation - - PowerPoint PPT Presentation

EDC COMPANY PRESENTATION JANUARY 2015

This presentation contains certain “forward looking statements.” These forward looking statements include words or phrases such as EDC

• r 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

5 Power Industry Overview

EDC MANAGEMENT TEAM - PHILIPPINE CORPORATE DAY TOKYO 2015

RICHARD B. TANTOCO

President and Chief Operating Officer

ERWIN O. AVANTE

Vice President for Corporate Finance and Compliance Officer

ERUDITO S. RECIO

Investor Relations and Corporate Information Officer

7 Key Investment Highlights

Wind concessions acquired with ~543 MW capacity

TOP REASONS FOR INVESTING IN EDC -- A GLOBAL DIVERSIFIED RENEWABLE POWER COMPANY

100%

Successfully acquired power plants inside its geothermal concessions

1 of 11 light bulbs

EDC accounts for 9%

• f the Philippine’s

electricity production

Largest vertically integrated geothermal company globally

Domaine Expertise Contract-based Cash Flows Track Record of Growth Favorable Industry Dynamics Strong Credit & Investment Profile

Into geothermal, hydro & wind and now diversifying into solar energy

YEAR

2031

Concession agreements start expiring

5

RE Act of 2008

Provides regulatory support  10% Income Tax  7-year ITH  Feed-in-Tariff (FIT)

Geothermal is

11%

• f Installed

capacity

YTD 3Q’14 Highlights Revenues Php23.0 billon RNI Php8.0 billion EBITDA (TTM) Php17.2 billion Revenue derived from contract tenors

• f greater than

6 years

64%

92%

Revenue derived from long-term contract agreements

Concessions acquired in Chile & Peru

Managing Financial Risks 

Interest rate on

81% of loans

are fixed

 44% of

revenues are US$ indexed

 4.9 yrs. loan life  6.6% Interest

cost

Geothermal provides

13%

• f electricity production

in the Philippines

Robust Growth

Domestic Expansion

 Install ~180MW of geothermal capacity

Overseas Expansion

 Drill wells in Mariposa, Chile by 2015

10

8 Key Investment Highlights Domaine Expertise Plant Type Manufacturer

150.0MW Burgos Wind Vestas 4.0MW Burgos* Solar Juwi 120.0MW Pantabangan Hydro Andritz 12.0MW Masiway Hydro Toshiba 110.0MW Bacman I Geothermal Toshiba/Alstom 20.0MW Bacman II Geothermal Mitsubishi 112.5MW Tongonan Geothermal Mitsubishi 112.5MW Palinpinon I Geothermal Fuji 60.0MW Palinpinon II** Geothermal Fuji 125.0MW Upper Mahiao Geothermal GE/Ormat/Kato 232.5MW Malitbog Geothermal Fuji 180.0MW Mahanagdong Geothermal Toshiba 50.9MW Optimization Geothermal Various 49.4MW Nasulo Geothermal Fuji 52.0MW Mindanao I Geothermal Mitsubishi 54.0MW Mindanao II Geothermal Mitsubishi 1 1 1 2 3 3 Note: * under development **20 MW Nasuji Power Plant placed on preservation

1,441 MW

1,159MWGeothermal 150MWWind 132MWHydro 4MWSolar (under development)

% share

7% of Installed Capacity 9% of Electricity Produced

EDC

AT A GLANCE

2

COMPANY

CAPACITY (in MW) STEAM PLANT

1 EDC

1,159 1,159

2 Comision Federal de Electricidad 958 958 3 Enel Green Power 915 915 4 Chevron 1,329 887 * 5 Ormat 689 749

Source: Bertani, Ruggero, 2010: Geothermal Power Generation in the World 2005-2010 Update Report Note: * Not included is the 442 MW operated by the Indonesian Government through PLN

TOP 5 GEOTHERMAL COMPANIES

EDC IS THE LARGEST VERTICALLY INTEGRATED GEOTHERMAL COMPANY GLOBALLY

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

Offices

• Philippines Chile
• Indonesia
• Peru

1 1 1 2 3 1 3 2

1

1

9 Key Investment Highlights Domaine Expertise

GEOTHERMAL IS NOT NEW TO JAPAN

With 21 power plants in 18 geothermal sites, Japan’s total installed geothermal capacity is ~537 MW, i.e. representing ~0.3%

• f total country electricity production

Source: The Geothermal Research Society of Japan

Operated by Power Plants MW Year Tohoku Electric Power Co. Sumikawa 50.00 1995 Tohoku Electric Power Co. Matsukawa 23.50 1966 Tohoku Electric Power Co. Kakkonda 1& 2 80.00 1978/ 1995 Tohoku Electric Power Co. Uenotai 28.80 1994 Tohoku Electric Power Co. Yanaizu-Nishiyama 65.00 1995 Tohoku Electric Power Co. Hachijo-jima 3.30 1999 Kyushu Electric Power Co. Takigami 25.00 1996 Kyushu Electric Power Co. Otake 12.50 1967 Kyushu Electric Power Co. Hatchobaru 1 & 2, binary 112.00 1977/1990/2006 Kyushu Electric Power Co. Ogiri 30.00 1996 Kyushu Electric Power Co. Yamagawa 30.00 1995 Hokkaido Electric Power Co. Mori 50.00 1982 Mitsubishi Materials Corp. Onuma 9.50 1974 J Power Onikobe 15.00 1975 Suginoi Hotel Suginoi 1.90 1981 Kojyu Kanko Hotel Kuju 0.99 1998 Hirose Trading Co., Inc. Takenoyu 0.10 1991 Daiwabo Kanko Co., Inc. Kirishima-kokuksai 0.10 1984 TOTAL 537.69

* Stopped/Closed operations Source: The Geothermal Research Society of Japan and Global Energy Observatory

10 Key Investment Highlights Contract-based Cash Flows

EDC GENERATES STRONG AND ROBUST CASHFLOWS AT BOTH PARENT AND SUBSIDIARY LEVELS

First Gen Hydro Power Corporation (FGHPC)

120.0 MW Pantabangan 12.0 MW Masiway

60% EDC Wind Energy Holdings Inc. 100%

EDC Hong Kong Limited

100% EDC Geothermal Corporation (EGC) 100%

172.5 MW Palinpinon (2) 112.5 MW Tongonan

Green Core Geothermal

• Inc. (GCGI)

100%

110.0 MW Bac-Man I 20.0 MW Bac-Man II

Bac-Man Geothermal

• Inc. (BGI)

100%

(1)

• 743.8 MW Power Plants

 588.4 MW Unified Leyte Power Project  106.0 MW Mindanao Power Project  49.4 MW Nasulo Power Project (1) Formerly First Luzon Geothermal Energy Corporation (FLGEC) (2) 20 MW Nasuji Power Plant to be placed in preservation

Lopez Group

IFC GIC Public

E: 50.18 % V: 50.59% E: 1.69 % V: 1.12 % V: 3.33 % E: 4.99 % V: 44.96 % E: 43.14 %

EDC Burgos Wind Power

• Corp. (EBWPC)

150.0 MW Burgos (Under Development)

International Expansion

• Chile
• Peru
• Indonesia

100% 95/100%

EDC Parent(3) 3,290 31% EGC 6,640 63% FGHPC 614 6% EDC Parent (3) 5,801 59% EGC 7,391 75% FGHPC 1,084 11% EDC Parent (3) 6,646 44% EGC 7,294 48% FGHPC 1,465 6%

(2) All figures in PHP millions as of Sept. 30, 2014 (3) EDC Parent figures include the Company’s other subsidiaries

22,982

EBITDA (2) as of Sept. 2014

14,275

Net Income (2) as of Sept. 2014

10,544

Revenues (2) as of Sept. 2014

11 Key Investment Highlights Contract-based Cash Flows WESM, 1,909 NGCP, 593 DU, 10,370 NPC, 10,111 SPOT 8% 1-2 YRS 21% 3-5 YRS 7% >6 YRS 64%

22,983

LIMITED EXPOSURE TO VOLATILE SPOT MARKET

LONG-TERM CONTRACTUAL AGREEMENTS

(1) Consolidated revenues as of Sept. 30, 2014

TERM STRUCTURE OF CONTRACTS(1) In PHP Millions

2031 Geothermal Renewable Energy Service Contract CONCESSION Power Purchase Agreements (sovereign) Power Supply Agreements (commercial) ELECTRICITY 2022/24 2022

SPOT 1-2 YRS 3-5 YRS >6 YRS WESM

8%

• NGCP
• 3%
• DU
• 18%

7% 20%

NPC

• 44%

2031

year concession agreements start expiring

92%

revenue from long-term contracts

64%

revenue from contract tenors

• f >6 yrs

44%

expanded revenue base from non-NPC clients

12 Key Investment Highlights Track Record of Growth

• Limited to steam field operations

(+) 125.0 MW

Upper Mahiao

(+) 49.4 MW

• N. Negros

(+) 463.4 MW

Mahanagdong, Malitbog, and Optimization

(+) 132.0 MW

Pantabangan – Masiway

• Acquired geothermal

concessions overseas

(-) 49.4 MW

• N. Negros

(-) 20.0 MW

Botong

(+) 150.0 MW

Bac-Man I & II

(+) 106.0 MW

Mindanao I & II

(+) 305.0 MW

Palinpinon & Tongonan

SIGNIFICANT PORTFOLIO EXPANSION SINCE PRIVATIZATION

STEAMFIELD OPERATOR STEAMFIELD AND POWER PLANT OPERATOR

2007 2008 2009 2010 2011 2012 2006 1976 - 2005

current (MW) 125 513 132 411 150 (69) 179

• cum. (MW)

125 638 770 1,181 1,331 1,262 1,262 1,262 1,441

2007-2013 (CAGR)

Revenues 5.1% EBITDA 7.2% Net Income 7.1% 2013 2014

(+) 49.4 MW

Nasulo

(-)

20.0 MW Nasuji

(+) 150.0 MW

Burgos

19,007 29,902* 10,324 17,815* 8,768 9,711*

*Bloomberg estimates

13 Key Investment Highlights Strong Credit & Investment Profile

DELIVERING SUPERIOR FINANCIAL AND OPERATING RESULTS TO STAKEHOLDERS

• 3,000

6,000 9,000 12,000

5,245(1) 9,895 7,458(2) 6,400 7,980 9,711

RECURRING NET INCOME

• 6,000

12,000 18,000 24,000 30,000 36,000

24,551 28,369 25,656 19,783 22,982 29,902

CONSOLIDATED REVENUES

1) P1.2 B forgone steam revenues resulting from EDC’s acquisition of the Bacman power plants 2) P2.7 B lower revenues mainly from ancillary services

90% of FY 2013 107% of FY 2013

14 Key Investment Highlights Growth Projects

EDC SUCCESSFULLY DELIVERED ON ITS 2014 STRATEGIC OBJECTIVES

OUTPUT 382 GWH REVENUES Php2.0 B OUTPUT 968 GWH REVENUES Php4.8 B OUTPUT 326 GWH REVENUES Php2.8 B

4.50 5.00 5.50 6.00 6.50 7.00 7.50 8.00 8.50 9.00 4.50 5.00 5.50 6.00 6.50 7.00 7.50 8.00 8.50 9.00 Price Price

1 2 3

Bloomberg

2015 EPS (est.) 0.675 2016 EPS (est.) 0.732

130.0 MW Bacman plants have returned to service 150.0 MW Burgos wind starts commissioning

• Nov. 5, 2014

49.4 MW Nasulo plant starts commissioning runs April 2014

5th Best Performing (PSEi)

2014 High : 8.47 2014 Low : 5.12 2013year-end : 5.33 2014year-end : 8.20 % Change : 53.85%

EBITDA CONTRIBUTION OF GROWTH PROJECTS WILL DRIVE ROBUST 2015 FINANCIAL RESULTS

15 Key Investment Highlights Growth Projects

BURGOS WIND FARM WINS GLOBAL AWARD…

Asia-Pacific Renewables Deal

• f the Year Burgos

A landmark

transaction being…

• the first wind farm project

financing in the Philippines to reach financial close

• the first to be banked under the

country’s new feed-in tariff regime

“Achieving financial close indicates growing confidence and an increasingly sophisticated view of the Philippine market by both international and local lenders” – Yearbook 2015

Project Finance International

Project

Sponsor

• Energy Development Corporation

16 Key Investment Highlights Growth Projects

EDC’S GROWTH AGENDA

305 MW Palinpinon-

Tongonan acquired in 2009

130 MW Bacman

acquired in 2010

• Bid for Unified Leyte

IPPA in 2014

 Bid for Mindanao 1 & 2

IPPA in 2014

150 MW Burgos Wind

commissioned in 4Q’14

• Wind measurement

studies is on-going in 9

• ther concessions
• Potential 4MW solar

Granted 5 concessions &

19 pending applications in Chile & Peru

Established local offices

in LatAm and Indonesia

• Drill wells in

Mariposa, Chile by 2015

• Continue to prospect

prime geo sites

1 2 3 4

ACQUIRE DEVELOP CONQUER DIVERSIFY

Win key government geothermal privatization projects

Install 180MW

• f local geothermal

capacity to address new demand Establish viable

• perations in

Asia, Latin America, and Africa Build 200MW

• f wind

capacity, while expanding RE portfolio

49.37 MW Nasulo

commissioned in Sept. 2014

• 6 MW NNGP Plant

development is on-going

• 180 MW for

commissioning by 2018 2015 STATUS 2015 STATUS

17 Key Investment Highlights Favorable Industry Dynamics

Geothermal 13% Hydro 13% New Re 0% Coal 43% Natural Gas 25% Oil Based 6%

2013 POWER STATISTICS OF THE PHILIPPINES

Source: DOE

11%

Geothermal

as a % of Installed Capacity

13%

Geothermal

as a % of Electricity Production

Fuel Type Installed Capacity (MW) Coal 5,568 Hydro 3,521 Oil-based 3,353 Geothermal 1,868 Natural Gas 2,862 New RE 153

Total 17,325

GEOTHERMAL ENERGY IS A STRATEGIC ENERGY RESOURCE FOR THE PHILIPPINES

Renewable 26% Conventional 74%

• 2,000

4,000 6,000 8,000 10,000 12,000

Geothermal Coal Natural Gas Hydro Oil Based/Gas Turbine

5.60–7.60 P/kWh 4.22 P/kWh 3.68 P/kWh 4.80–5.00 P/kWh 1.87 Php/kWh(2) 5.16 Php/kWh 14.14Php/kWh

2013 Peak Demand: 8,283 MW 2013 Required Reserve: 10,105 MW

• Ave. dependable capacity (MW)

LUZON DISPATCH AT FULL COST (1) WITH VAT

NOTES: 1) Quoted production costs were derived from estimated weekly cost of Luzon grid power plants at 83% capacity factor as of August 29 2013, VAT inclusive 2) Despite P 1.87/kWh production cost, hydro capacity is still used for peaking because these are not run-

• f-river types used for base load. Only Casecnan is run-of-river

18 Key Investment Highlights Growth Projects

REPLICATING BACMAN’s RETROFIT PROGRAM INTO BOTH TONGONAN I AND PALINPINON I ... LIFE EXTENSION YIELDS ADDITIONAL BENEFITS

TURBINE Retrofit

30 year old design with associated reliability issues

GENERATOR Retrofit

30 year old design with associated reliability issues

1 2

EDC REALIZES EFFICIENCY GAINS WITH NEW TECHNOLOGY AND ACHIEVES LIFE EXTENSION FOR LEGACY POWER GENERATING ASSETS

3Q ‘16 Jan ‘15 Tongonan retrofit kit order date Target COD for Tongonan 2017 Palinpinon retrofit kit order date 2H ‘15 Target COD for Palinpinon

Efficiency Gains Electricity Production 10.00% Steam Consumption 9.75%

Bacman Retrofit Program

19 Key Investment Highlights Growth Projects

LOCAL GEOTHERMAL PROJECTS WILL BE THE MAIN SOURCE OF GROWTH IN THE MEDIUM TERM

DONE EXECUTION ADVANCED EXPLORATION RESOURCE CONFIRMATION POWER PLANT RETROFIT

1 1 3 1 1 2 5 4 6 7 3

PROJECT CAPACITY

2014 2015 2016 2017

Beyond

2018

Nasulo* 49 MW X Burgos Wind 150 MW X

• No. Negros

6 MW X Burgos Solar 4 MW X Bacman 3**

up to 30 MW

X Nasuji

up to 20 MW

X Botong-Rangas** up to 40 MW X Mindanao 3 50 MW X Pagudpud Wind X Bacman 10 MW X Tongonan ~12 MW X Palinpinon ~12 MW X Kayabon 50 MW X Dauin 40 MW X

2

3 4 5 6 7

FRONTIER AREAS

(GEOTHERMAL)

Mandalangan, Negros Occidental Lakewood, Zamboanga del Sur Ampiro, Misamis Occidental Balingasag, Misamis Oriental

• Mt. Zion, North Cotabato

Note: *20 MW Nasuji Power Plant placed on preservation **Resource sustainability assessment is on-going

2

2 2 1 1 1 2 3 1 4

4

FRONTIER AREAS

(WIND)

Bayog I (Burgos I) Pagali (Burgos II) Iloilo 1 Iloilo 2 Matnog 1 Matnog 2 Matnog 3 Negros

1 2

2 1

20 Key Investment Highlights Growth Projects

EDC SEIZED THE OPPORTUNITY AND NOW HOLDS STAKES IN UP TO 5 CONCESSIONS AND 19 APPLICATIONS

Exploration Drilling Estimate: USD 30 MM Target COD Q4 ‘15 Q2 ‘20 Site Development Budget: USD 15 MM Q1 ‘14

WE ARE NOW EXECUTING AN EXPLORATION DRILLING PROGRAM IN MARIPOSA, ONE OF THE MOST ADVANCED GEOTHERMAL PROJECTS IN CHILE

* 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)

LATIN AMERICA

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

GRAHO NYABU GEOTHERMAL PROSPECT Results from EDC’s completed survey activities for Graho Nyabu in Sumatra shall be used by Indonesian Ministry of Energy and Mineral Resources for its upcoming tender of the Graho Nyabu concession Currently, in partnership discussions with a geothermal concession holder for a JV in one of their geothermal sites (~ 220 MW at an ~ US 1.0 billion development cost) INDONESIA

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 10 105 P50 15 155 P10 21 210

~760

to

1,800

END OF PRESENTATION

www.energy.com.ph