Georgia Global Utilities Investor presentation October 2017 - PowerPoint PPT Presentation

Georgia Global Utilities Investor presentation October 2017

Contents • General overview • Water utility • New energy projects • Appendix GGU page 2 October 2017

GGU Group Water Energy Operating HPPs GWP - Tbilisi Water Zhinvali HPP (130.0MW) Rustavi Water Mtskheta Water Gardabani WWTP Tetrikhevi HPP Pshavela HPP 2 Saguramo HPP (4.4MW) (2.9MW) (12.0MW) At a glance Committed project 520 m 3 Mestiachala HPP Zoti HPP p.a. 1 (50MW) (44.3MW) (Under construction) (Under Development) Note: 1. Water production 2. Under operating lease GGU page 3 October 2017

GGU structure by shareholders and activities BGEO RP Group Global 100% 35% GGU Water Energy Utility 150MW 50MW Tbilisi Rustavi Mtskheta 149.3MW 150MW 50MW 44.3MW Gardabani Water Water Water Existing Pipeline Pipeline Pipeline WWTP UC Hydro UD Hydro Utility Utility Utility Hydro Hydro Wind Solar • EXISTING UNDER UNDER Natural monopoly in water supply and Wastewater • 130MW Zhinvali HPP CONSTRUCTION DEVELOPMENT wastewater services for Tbilisi, Rustavi and treatment plant • 12MW Tetrikhevi HPP Mtskheta serves customer • • • 4.4MW Saguramo HPP 50MW 44.3MW • Serves c. 548K customers – 1.4m people base of water • 2.9MW Pshavela HPP Mestiachala HPP Zoti HPP (1/3 of Georgia) utility companies • under management Total water production – c. 520m m3 Note: Information on renewable 1. UC refers to under construction projects are provided separately 2. UD refers to under development 3. WWTP refers to wastewater treatment plant on an indicative basis GGU page 4 October 2017

Partnership in hydro & other renewables 1 BGEO Group 2 RPGlobal Georgia focused investment platform Austria-based renewables IPP 65% majority shareholder 35% shareholder Georgia ’ s leading investment platform. 30 years experience in developing, building, Owns & operates 149.3 MW of hydro power capacity owning and operating renewable power plants, in Georgia in its GGU water utility and energy globally (hydro, wind & solar). business. BGEO Group and RP Global teamed up in 2014 with an initial focus on developing specific hydro power plants The partnership was deepened in Q1/2017 with the target to establish Georgia’s leading renewables developer, as an integral part of BGEO’s GGU water utility and energy business GGU’s energy arm develops and implements a diversified renewable power portfolio in Georgia, split between the three main renewable technologies of hydro, wind and solar GGU selects best project opportunities from an identified potential for each technology and aims to develop additionally on top of the existing 149.3MW installed capacity about 400MW in the mid term, out of which 50MW are under construction and 44.3MW are ready to build GGU page 5 October 2017

GGU strategy CURRENT STANDING MEDIUM TERM GOAL TARGETING 1 IPO in 2-3 years time WATER DIVIDEND REVENUE 2016: GEL 117.1m EBITDA 2016: GEL 56.7m EBITDA 2019: GEL 70+ m PROVIDER UTILITY 2 REVENUE 2016: GEL 15.0m VALUE CREATION EBITDA 2019: GEL 38+ m EBITDA 2016: GEL 11.8m ENERGY UPSIDE 149MW existing capacity 200MW existing capacity GGU page 6 October 2017

GGU management team Archil Gachechiladze Giorgi Vakhtangishvili Chief Executive Officer Chief Financial Officer - Joined GGU in November 2016 - Joined GGU in April 2015 - Previously served as Deputy CEO, Corporate & Investment Banking at - Previously held different managerial positions at BGEO Group’s Bank of Georgia (BOG), prior to that he served as BGEO Group CFO and companies; before joining GGU, Giorgi served as CEO of m2 Real Deputy CEO Investment management at BOG. Archil joined Bank of Estate, the leading real estate development company in Georgia Georgia in October 2009 as Deputy CEO Corporate Banking. - Holds BBA degree from European School of Management (ESM) - Holds MBA degree from Cornell University and also is a CFA charterholder Giorgi Tskhadadze Zurab Gordeziani Head of Water Utility Head of Hydropower - Joined GGU in December 2014 - Joined GGU in January 2015 - Previously held executive positions at several leading local companies, - Joined BGEO Group in 2013 to develop hydro projects. Before that, holding position of CFO at IDS Borjomi and Poti Sea Port. Prior to he was involved in the energy sector of Georgia for 14 years and was joining GGU, Giorgi was acting as a partner at Proxima Prime Partners part of the team that developed current legislative framework for the - Holds BSc degree in Economics and Engineering from Tbilisi State energy sector in Georgia. He also served on executive positions in JSC University Energo-Pro Georgia, Georgian Electrosystem and Ministry of Energy - Holds degrees in Law and Economics from Tbilisi State University Eter Iremadze Giorgi Bezhuashvili Head of Strategic Projects Head of Wind and Solar Power - Joined GGU in February 2017 - Joined GGU in July 2016 - Joined BGEO Group in 2006 and held numerous executive positions at - Previously held executive positions at several leading local companies, Bank of Georgia; among those are head of SOLO (Premium Banking) among them serving as General Director at Georgian Energy department and head of Blue Chip Corporate Banking Unit covering Development Fund. Before joining GGU, Giorgi served at GRPC as structured lending, M&As, significant buyouts in Georgia, and project Deputy CEO, wind and solar financing. Overall, Eter has 18 years of experience in banking - Holds a master’s degree from Paris-Sud University in Economics, - Holds Dual MBA degree from Grenoble Graduate School of Business & Technology and Territories Caucasus University Tina Simonishvili Jaba Mamulashvili Head of Investor Relations Chief Legal Officer - Joined GGU in February 2016 - Joined GGU in February 2016 - Previously worked for BGEO Group companies for more than 6 - Before joining GWP he held a position of a partner at Begiashvili & Co. years, namely as an associate in department of DCM at Galt & Limited, one of the leading Georgian law firms. Jaba specializes in Taggart – leading investment bank in Georgia and as a principal commercial law and has a notable experience in equity investments, corporate banker at Bank of Georgia corporate and project financing, etc. - Holds BBA degree from Caucasus School of Business and MSc in - Holds a master’s degree in International Business Law from University of International Management from King’s College London Manchester GGU page 7 October 2017

Contents • General overview • Water utility • New energy projects • Appendix GGU page 8 October 2017

GGU – a privately-owned natural monopoly GGU is the only profitable water-utilities player in Georgia with plenty of efficiency rooms GGU is the largest privately owned water utility company in Company has strong execution track record & financial Georgia strength • • 2 core activities: Management team with extensive experience in utility business 1. Water supply and sanitation (including wastewater collection and • “BB - ” rating affirmed by Fitch Ratings to major subsidiary of GGU – processing) – Provides water to 1.4m people (1/3 of Georgia) Georgian Water and Power in 2016 ( currently Georgia’s sovereign rating is 2016A: 522M m3 “BB - ” and the country ceiling is BB by Fitch) Generation of electric power – Owns 3 HPPs and has 1 HPP under 1. • management with total installed capacity of 149.3MW. Generated First bond placement by utility company in Georgia (GEL 8.6m) through power is primarily used by GGU’s water business. The excess Georgian Water and Power in 2015 amount of generated power is sold to the third party clients every year • GGU issued GEL 30m 5-year local currency bond – the largest amount ever issued in local currency by a non-financial institution in Georgia • Revenue of GEL 127.2m in 2016, +7.6% y-o-y • GGU attracted long-term IFI financing of EUR 81.5m in 2017 from FMO, • EBITDA of GEL 68.5m in 2016, +11.0% y-o-y DEG and EIB. For EIB this was first loan provided directly to a private corporate entity in Georgia EBITDA (in GEL m) & EBITDA margin (in %) CAGR’14 -18 +10.5% 100 56% 55.1% EBITDA growth drivers: 53.7% 53.8% 54% 75 GEL millions 52.2% 52% • Cost saving from reduction in technical 50 50% water losses 82.3 75.3 • Subsequent savings from freed-up 68.5 48% 61.7 55.3 25 energy 46% 45.2% 0 44% 2014 2,015 2016 2017F 2018F GGU page 9 October 2017

GGU business lines Two revenue streams, each with solid cash generation capabilities Revenue Operating figures (2016A) Overview 1 – Water Owns and operates entire network for – Revenue – GEL 117.1m Supply and water supply and sanitation services - Sanitation pumping stations, reservoirs, Power, – Number of customers – 544K 91.9% of collectors, wastewater treatment plant 8.1% total and complementary infrastructural – Collection rates – c. 95% Revenues elements 2 – Owns and operates 3 Hydro power – Revenue – GEL 10.1m plants, Zhinvali, Tetrikhevi and Power Saguramo (146.4MW in total) 8.1% of Water supply – Total installed Capacity – 149.3MW total and sanitation, – Leases and operates Pshavela HPP 91.9% Revenues – Generation – 386GWh with 2.9MW installed capacity GGU page 10 October 2017