EDC COMPANY PRESENTATION NDR LONDON, UK - FEBRUARY 2015 DISCLAIMER - - PowerPoint PPT Presentation

EDC COMPANY PRESENTATION NDR LONDON, UK - FEBRUARY 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

RICHARD B. TANTOCO

President and Chief Operating Officer

ERWIN O. AVANTE

Vice President for Corporate Finance and Compliance Officer

NESTOR H. VASAY

Chief Financial Officer and Treasurer

EDC MANAGEMENT TEAM

7 Philippine Power Industry

KEY EVENTS AFFECTING THE PHILIPPINE ENERGY SECTOR

Secondary WESM Price Cap

• SECONDARY OFFER PRICE CAP OF PHP 6.245/KWH WHEN THE 168-HOUR

AVERAGE WESM PRICE EXCEEDS PHP9.000/KWH

FIT-ALL Provisional Approval

• FIT TARIFF FOR SELECTED RENEWABLE ENERGY SOURCES
• FIT-ALL PROVISIONAL APPROVAL OF PHP 0.04057 PER KWH

8 Philippine Power Industry

DEPARTMENT OF ENERGY FORECASTS ELECTRICITY SHORTAGE BY SUMMER OF 2015

6,000 6,500 7,000 7,500 8,000 8,500 9,000 9,500 10,000 10,500 W-9 Mar W-10 Mar W-11 Mar W-12 Mar W-13 Mar W-14 Apr W-15 Apr W-16 Apr W-17 Apr W-18 May W-19 May W-20 May W-21 May W-22 Jun W-23 Jun W-24 Jun W-25 Jun

DOE SUPPLY-DEMAND FORECAST MAR-JUN 2015

Available Capacity less FO Average FO Projeted Demand Regulating Reserve Req't

MW

NOTE: Data sourced from DOE Presentation

W-9 Mar W-10 Mar W-11 Mar W-12 Mar W-13 Mar W-14 Apr W-15 Apr W-16 Apr W-17 Apr W-18 May W-19 May W-20 May W-21 May W-22 Jun W-23 Jun W-24 Jun W-25 Jun

INTERRUPTIBLE LOAD PROGRAM (ILP) 300 MW PLANT/CONTRACT FIT

• Mandatory operation of end consumer

gensets to unload the grid;

• Additional cost of running gensets will be

spread across electricity consumers;

• Total of 685 MW of intending ILP

participants as of 1/20/2015.

• Plant purchase/lease of from PHP700 M

to PHP2.8 B per 100 MW;

• CAPEX to be subsidized by Malampaya

funds.

• Increased FIT allocation for easy- to-set-

up power plants like solar.

DOE PROPOSED SEVERAL PLANS TO ADDRESS SHORTAGE

9 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

10 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

11 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

12 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

13 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

14 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

15 Typhoon Proofing Cooling Tower Units

RETROFITTING OF COOLING TOWERS TO BE IMPLEMENTED IN 3 PHASES ON PRIORITY 1 AND 2 COOLING TOWERS

TRIAGE * THE SITUATION

PHASE 1

PROCURE & INSTALL HURRICANE GRADE CTs AVAILABLE IN THE MARKET

PHASE 2

DESIGN & IMPLEMENT A 300 KPH SOLUTION

PHASE 3

OBJECTIVE  TO RESTORE AFFECTED CTs AS QUICKLY AS POSSIBLE  TO INSTALL OFF – THE – SHELF PROVEN OEM MARLEY SOLUTION FOR 233 KPH SURVIVABILITY  TO TAKE PHASE 2 SOLUTION UP TO 300 KPH USING OUTER ANCHORAGE RING AND STRUTS

• Repair Bacman Units 1 and 2 cooling

towers using in-country strategic spares, i.e., parts stocked precisely for contingencies of this nature Fan Stacks Replacement of wooden decks with FRP decks Replacement of 12 oz casings with 16 oz casings

TASKS

• SPX Marley RTM stack

First 15 RTM Fanstacks shipped from US, Dec 2014 Balance (39) due for delivery by Q3 2015

• SS316 anchorage ring

Inner Anchorage rings due for delivery Q1 2015

• Oct 15, 2014 - Finalized Concept and

Preliminary Design

• Dec 10, 2014 - Detailed Design

Completed and Marley Proposal Submitted

• Jan 30, 2015 - Order Issued:
• Mar 15, 2015 - First delivery of Phase 3

components

• May 2015 - First installation for

300kph fan stack

* Ranking an issue in order of importance

FOCUS IS ON TOWERS WHICH HAVE BEEN HISTORICALLY DAMAGED

16 Typhoon Proofing Cooling Tower Units

1 2 3 4 5 6

ENGINEERING SOLUTIONS WILL PROGRESSIVELY BE IMPLEMENTED TO TYPHOON PROOF OUR COOLING TOWERS

PHILIPPINE WIND ZONE MAP

2 1 4 3 5 6

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

• No. Negros Geothermal
• So. Negros Geothermal

PRIORITY Location # of Units OEM Cell x Fan Stack Dia. # of Cells

1 Malitbog 3 SPX Marley 8 x 28’ 24 Mahanagdong 3 SPX Marley 7 x 30’ 21 Tongonan 3 SPX Marley 3 x 28’ 9 Bacman 2 Research Cottrell 6 x 28’ 12 1 ICS 2 X 30’ 2 PRIORITY 1 Sub-total 68 Total Cost, Priority 1 @ USD 100,000 PER CELL USD 6,800,000 2 Mt Apo 2 GEA 5 x 32.8’ 10 Palinpinon 1 2 Hamon 3 x 28’ 6 Palinpinon 1 1 ICS 3 X 28’ 3 Palinpinon 2 4 Shinko 2 x 28’ 8 Malitbog Bottoming 1 SPX Marley 3 x 28’ 3 Upper Mahiao 1 SPX Marley 4 x 22’ 4 Nasulo 1 SPX Marley 6 x 26’ 6 PRIORITY 2 Sub-total 40 TOTAL 108

PRIORITY 1: ALL BACMAN AND LEYTE COOLING TOWERS . PRIORITY 2: ALL PALINPINON & MINDANAO COOLING TOWERS .

17 Typhoon Proofing Cooling Tower Units

68 HURRICANE TOWER SETS ON ORDER TO RETROFIT EXISTING FLEET OF COOLING TOWERS

• Fan stack is the nozzle through which the fan blade draws air through the cooling tower.
• The RTM (Resin Transfer Moulding ) cold molding process increases durability, ensures

laminate thickness & weight consistency, allows no porosity for delamination or structural fracture, thereby enhancing the cylinder load capacity

• RTM fan stack is designed for 233 kph winds

KNOWN AS “HURRICANE TOWER” THAT WAS DEVELOPED BY SPX MARLEY FOR CHEVRON’S USE IN US GULF COAST

SPX Marley Reflex RTM Fan Cylinder SS 316 Anchorage Ring Spider Support System

• Anchorage ring is cold-rolled for increased tensile strength/stiffness and is made of SS

316 to be compatible with corrosive environment

• Marley has confirmed that the incremental weight of the RTM fan stack and anchorage

ring is within the existing cooling tower’s design weight limit

• To go beyond the 233 kph design of an additional structure is under evaluation.
• The structure will include an SS support ring at the top of the fan stack & a lower ring

spread out from the base of the fan cylinder

• Intermediate tubes (2x2 FRP square tubes) will connect the 2 rings
• SS pins to attach tubes to belly band and anchorage rings
• RTM fanstacks and spider support system to be installed one by one using N+1 flexibility
• Priority is 1. Malitbog, 2. Bacman, 3. Mahanagdong, 4. Tongonan
• Design review meeting completed at Marley in Missouri & Kansas October 2-3, 2014

RTM SEGMENTS ARE BOLTED TO THE ANCHORAGE RING WHICH IN TURN IS DIRECTLY BOLTED ONTO THE COOLING TOWER’S PURLINS & JOISTS CONCEPT AGREED; INSTALLATION OF RTM FANSTACKS WILL COMMENCE ONCE MATERIALS FOR AT LEAST 1 COOLING TOWER IS COMPLETE

END OF PRESENTATION

www.energy.com.ph