Investor Meetings September 2014 Strictly Private and Confidential - - PowerPoint PPT Presentation

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Investor Meetings September 2014 Strictly Private and Confidential - - PowerPoint PPT Presentation

Investor Meetings September 2014 Strictly Private and Confidential Disclaimer These materials have been prepared by Genneia S.A. (the Company) and are being furnished to you solely for your information on a confidential basis and may not


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SLIDE 1

Investor Meetings

September 2014

Strictly Private and Confidential

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SLIDE 2

Disclaimer

1

These materials have been prepared by Genneia S.A. (the “Company”) and are being furnished to you solely for your information on a confidential basis and may not be taken away, reproduced, redistributed or passed on, in whole or in part or directly or indirectly, to any other person (whether within

  • r outside your organization/firm) or published, in whole or in part, for any purpose. By attending this presentation, you are agreeing to be bound by the

foregoing restrictions and to maintain absolute confidentiality regarding the information disclosed in these materials. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. Unauthorized copying, reproduction, redistribution or publishing of these materials into the United States to any other third parties (including journalists) could result in a substantial delay to, or otherwise prejudice, the success of the proposed

  • ffering.

The information contained in these materials has not been independently verified. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. It is not the intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company’s financial position,

  • perations or prospects. The information contained in these materials should be considered in the context of the circumstances prevailing at the time and

has not been, and will not be, updated to reflect material developments which may occur after the date of the presentation. None of the Company, nor any

  • f its respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss or damage howsoever

arising from any use of these materials or their contents or otherwise arising in connection with these materials. Certain statements contained in these materials constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, which may cause the actual results, performance or achievements of the Company to be materially different from those expressed by, or implied by the forward-looking statements in these materials. There can be no assurance that the results and events contemplated by the forward-looking statements contained in these materials will in fact occur. These forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we operate and are not a guarantee of future performance. Such forward-looking statements speak only as of the date on which they are made. The Company undertakes no

  • bligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
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SLIDE 3

Business Overview and Investment Highlights

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SLIDE 4

Leading player in the development of new power generation in Argentina

3

Key highlights

Leading company in the development of new power generation in Argentina with operations in renewable and thermal energy

Largest wind power generation company in the country with a capacity of 77.4 MW; operates the Rawson Wind Farm in the Patagonia region with one of the most optimal climate and topographic conditions for wind power generation

The Company is also involved in thermal power generation through 9 different plants with a total installed capacity of 280MW Revenues are derived mainly from long-term PPAs denominated in US$

More than 90% of revenues came from PPAs in 2013

PPAs for thermal power plants provide for stable firm capacity revenues / PPAs for wind power plants based on energy generated and benefit from dispatch priority Secondarily, engaged in the business of trading natural gas and commercializing natural gas transportation capacity New projects

Wind capacity expansion of more than 500 MW in new projects, of which 220 MW are in a ‘ready to build’ stage

Additional 200 MW thermal expansion plan for the next 5 years Main financial highlights (LTM as of 6/30/2014) :

Revenues = US$163.1mm

EBITDA = US$96.9mm

EBITDA margin = 59%

RENEWABLE ENERGY

77.4MW Rawson Wind Farm, in operation since January 2012 43 Vestas AGs of 1.8MW each 44% average net load factor since January 2012 (COD¹)

THERMAL ENERGY

Thermal power generation plants with aggregate capacity of 280MW Efficient peakers (backup providers) strategically located in high consumption areas, with dual fuel technology

Core business units

¹ Commercial operation date

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SLIDE 5

20 40 60 80 100 120

Solid track record of performance and growth

4

1991

  • Empresa de Gas del Sudeste –

Emgasud SA was created, engaged in the propane gas distribution business 2001

  • A.Ivannissevich

acquires Emgasud 2004

  • Engaged in the Energy

trading business 2009

  • Capital contribution of

US$35mm from AEI

  • Convertible bond

issuance of US$15mm 2007 - 2011

  • Development of thermal power

generation assets with a combined IC of 280 MW

  • Dec. 2011
  • Mr.Brito and Mr.Carballo

acquire part of Fintech's shares

Note: IC refers to installed capacity. ¹ Adjusted taking into account call options and participations assigned by Fintech to Andreas Keller S. and Fides

2006

  • Construction of

Gasoducto Patagónico 2012

  • Shareholders change

corporate name to “GENNEIA S.A.”

Thermal energy and others

1991 2001 2009 2013 2011 2012 2010 2008 2007

2012

  • Rawson wind

farm becomes

  • perative
  • Feb. 2012
  • New capital

contribution of US$15mm (to cancel convertible bond)

  • Aug. 2011
  • AEI sells its stake to Fintech
  • Issuance of subordinated

bond of US$50mm 2008

  • AEI becomes

shareholder (US$25mm capital contribution) 2007

  • Entrance of Private

Equity funds

  • US$40mm capital

contribution 2009

  • Awarded the right to develop

and operate 2 wind farms in Rawson and 5 wind farms in Puerto Madryn (80 MW & 220 MW)

Shareholder structure

Fintech¹ 20% Fides¹ 43% Others 5% Brito and Carballo families 20% Andreas Keller S.¹ 12%

Renewable energy EBITDA evolution (US$mm)

2012-2013

  • Divestiture of

natural gas distribution and transportation businesses

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SLIDE 6

Diversified asset base within a consolidated business and financial model

5

ThP CONCEPCIÓN (42 MW) - 2009 ThP MATHEU (42 MW) - 2008 ThP PINAMAR (20 MW) - 2008 ThP PARANA (42 MW) - 2009 ThP BRAGADO (50 MW) - 2011 ThP OLAVARRIA I (42 MW) - 2009 ThP MAYO Y COSTA (7 MW) – 2008/2009 ThP LAS ARMAS I & II (10 MW + 25 MW) – 2009/2011 WF RAWSON (77.4 MW) – 2012

Power generation assets Breakdown by business unit – LTM as of 6/30/14 Revenue (US$MM)

Revenues: US$163mm Thermal energy 72% Renewable energy 23% Other 5% Thermal energy 65% Renewable energy 29% Other 6%

Consolidated EBITDA (US$MM)

EBITDA: US$96.9mm

Note: Other includes energy trading business

Installed capacity (MW) Energy sales (GWh)

Installed capacity: 357 MW Thermal energy 76% Renewable energy 22% Isolated energy 2% Thermal energy 71% Renewable energy 29% Energy sales: 982 GWh Thermal Energy Isolated Energy Wind Energy Installed Capacity 273 MW 7 MW 77.4 MW Total Investments US$315mm US$7mm US$154mm

Summary metrics

Note: Year indicates commercial operation date (COD)

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SLIDE 7

Focus on power generation

94% of consolidated EBITDA from power generation Attractive growth opportunities in the sector Recent divestiture of non core business to focus on power generation

Well-defined strategic objectives…

6

Continue to expand

  • ur renewable

energy generation business Improve availability and margins maintaining a conservative balance sheet structure

Leading wind power generation company in the country Strong pipeline for new wind farm developments counting on wind measurements for over 2 years:

 220 MW on a ‘ready to build’ stage  300 MW under development

Investing in adequate maintenance and modernization of operations and infrastructure Implementation of international operating standards and maintenance programs to improve the overall quality, efficiency and reliability of our services Prudent capital structure management

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SLIDE 8

…which translate into clear key drivers

7

A story of transformation, growth and consolidation that places us in a solid position to face the present and the future

Unsustainable Argentine energy matrix Need for new power supply and diversification from traditional sources Great potential in wind energy Unbeatable mix of industry and financial experience Advantageous partnership of local knowledge and solid international financial backing

Financial Consolidation

Strategic Vision Revenue and EBITDA stabilization after years of rapid growth Progressive deleveraging as a result of a prudent financial policy Operating assets featuring long term dollar denominated contracts State of the art technology Seasoned management with proven experience in their respective areas Financial Consolidation Proven Execution Business Leadership

Strategic Vision Proven Execution Business Leadership

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SLIDE 9

Uniquely positioned to benefit from a rebalancing energy matrix towards increased use of renewable sources

In terms of generation, thermal-based sources (primarily natural gas) remain the cornerstone of the electricity mix – Roughly 60% of electricity is currently generated from oil, gas- or coal-fired power plants, with hydropower providing the next largest contribution The declining production of natural gas creates the need to import LNG and liquid fuels (fuel oil and gas oil), which leads to a big increase in power generation costs New electricity regulations provide incentives for new investments in the sector – Local regulatory environment has proven more favorable in recent years evidenced by the implementation of legal framework in 2007 under CAMMESA¹ and ENARSA² supervision (Energía Distribuida and GENREN)

Overview Electric power generation–TWh

1990 2000 2010 2012 2013

Thermal Hydro Nuclear + Ren + Imports

54 84 116 126 130

Conditions for the development of renewable energy

GENNEIA is set to benefit from Argentina’s expected growth in power demand as well as from the rebalancing of the energy matrix towards an increased use of renewable sources Optimal natural conditions for the development of wind energy Need for substitution of less efficient resources

For each wind MW installed, 4 GWh are generated yearly on average. This leads to annual savings in fuel imports of nearly US$1mm

Marginal cost of thermal power generation over US$200/MWh when taking into account the cost of imported fuel

8

Source: Argentine Institute of Oil and Gas (IAPG) ¹ CAMMESA is the local entity responsible for the administration of the Wholesale Electricity Market (“WEM”), owned 20% by the Argentine government and 20% by each of the associations representing the WEM agents, including generation, transmission and distribution players as well as large consumers ² ENARSA is a company majority owned by the government, created for the exploration and sale of petroleum and natural gas, as well as for the generation, transmission and sale of electricity

2 4 6 8 10 12 14 LNG Imports Bolivian Imports Exports

Source: CAMMESA

Imports and exports of natural gas (Bn m3)

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SLIDE 10

Investment Highlights

9 Solid shareholders platform and experienced management team Successful growth track record on the back of stable and predictable cash flows Attractive growth

  • pportunities

Leading player in the development of new power generation focused on renewable energy sources Strong corporate governance and social responsibility Consolidated cash flow generation coupled with prudent financial policies

1 2 4 5 6 3

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SLIDE 11

Leading player in the development of new power generation …

10

High quality and diversified asset base

Thermal plants Wind farms

7 dual-fuel fired plants (natural gas and diesel) with total 273 MW installed capacity and 2 gas only plants with 7 MW installed capacity

COD¹ Thermal Plants Province Technology Units Installed Power (MW) Load factor 2013 2009 Paraná Entre Ríos GT GE- TM2500 2 42 23% 2009

  • Conc. Del

Uruguay Entre Ríos GT GE- TM2500 2 42 23% 2008 Matheu

  • Bs. As.

GT GE- TM2500 2 42 26% 2009 Olavarría

  • Bs. As.

GT GE- TM2500 2 42 26% 2011 Bragado

  • Bs. As.

GT P&W-FT8 2 50 36% 2011 Las Armas II

  • Bs. As.

GT P&W-FT8 1 25 55% 2009 Las Armas I

  • Bs. As.

GT Solar-T60 2 10 35% 2008 Pinamar

  • Bs. As.

GT Solar-T60 4 20 70% 2008 Río Mayo Chubut MG Cummins- QSK60G4 3 3.5 33% 2009

  • Gob. Costa

Chubut MG Cummins- QSK60G4 3 3.5 41% Total 23 280 33%

¹ Commercial operation date

COD¹ Wind Farm Province Technology Units Installed Power (MW) Wind Avg (m/s) Load factor 2013 2012 Rawson I & II Chubut AG Vestas- V90 43 77.4 8.0 44% 5 10 15 20 25 30 35 100 200 300 400 500 600 700 800

GWh GWh 3-mth rolling avg (RHS)

Cumulative energy generated by the WF Rawson

Rawson Wind Farm is the largest scale wind farm connected to the National Interconnection System (NIS) in Argentina

572 GWh

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SLIDE 12

… with focus on renewable energy sources in one of the regions with the most favorable wind conditions worldwide

11

Rawson Wind Farm was the first big scale wind farm project built in Argentina and consists of 43 Vestas wind turbines, V90 1.8 MW, with a total installed capacity of 77.4 MW Its development started in 2008 with the installation of the wind Met masts Participated in the 2009 GENREN auction / awarded in 2010 Construction lasted only 1 year (2011) and investment was executed in time and on budget (US$154mm). Operational since January 2012 (“COD”) Estimated load factor of 43% before construction, which resulted in line with the real production since COD The project has been registered under the Clean Development Mechanism of the U.N. (from 12/2012 until 12/2019 with the possibility to extend until 12/2033)

Annual estimated reduction of CO2: 190,000 tonnes

350,000 CER’s (1CER=1 TonCO2) have already been sold in advance at a price of €3 per CER

GENNEIA is well positioned to capture the upside in the renewable energy sector thanks to its early- entrant investments, existing infrastructure and state-of-the-art technology

22% 28% 44%¹ 52%¹ Rawson WF Madryn I (Estimate) The average load factor of GENNEIA’s wind farms is significantly better than that

  • bserved in other countries. This is a result of winds with high speed,

uniformity, constant direction and low turbulence, which together maximize equipment performance and, consequently, power generation

Sources: 3Tier, Eurostat and Department of Energy. ¹ Based on Company estimates

Rawson Wind Farm – Overview Global winds

Average load factor

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SLIDE 13

Successful growth track record on the back of stable and predictable cash flows

12

Net revenues evolution (US$MM) EBITDA growth (US$MM) Long-term Power Purchase Agreements (PPA)– Main terms

Thermal Power Plants Renewable Energy Plants

Off-taker CAMMESA ¹

  • ENARSA. GENNEIA receives payments from CAMMESA under these PPAs since

ENARSA has assigned to the Company its rights to receive payments under the WEM² Agreements that support each of our PPAs with ENARSA Tenor 10 years from the date of commencement of commercial operations of each power plant (current contracts expire between 2018 and 2021) First 3 years with ENARSA and 7-year extension with CAMMESA The first to occur of (i) 15 years as from the COD (which may be extended for an additional 18-month term at the option of ENARSA) and (ii) the dispatch of the maximum quantity of energy committed to be purchased by ENARSA (3,825 GWh on aggregate for both contracts) Currency Denominated in US$; payable in Argentine Pesos (BCRA 3500) Denominated in US$; payable in Argentine Pesos (BCRA 3500) Price Fixed availability charge of US$ 21,275 per MW-month Variable charge for electricity effectively delivered between US$ 7.45 and US$ 14.90 per MW-hour (compensation for variable operating and maintenance costs) Pass-through of actual fuel costs Price for electricity effectively delivered: Rawson I (48.6 MW): US$ 128.70/MW-hour; Rawson II (28.8 MW): US$ 124.20/MW-hour

Thermal Power Plants Renewable Energy Plants

22% 23% 69% 81% 96% 74% 72% 31% 19% 4% 4% 5% 65 121 134 162 166 2009 2010 2011 2012 2013 Renewable Energy Conventional Energy Others 35% 32% 76% 89% 94% 60% 62% 24% 11% 6% 5% 6% 21 56 59 72 86 2009 2010 2011 2012 2013 Renewable Energy Conventional Energy Others

¹ Does not consider the 2 isolated power plants (Río Mayo and Gob. Costa) under PPAs with the Government of Chubut. ² WEM refers to the Argentine wholesale electricity market administered by CAMMESA

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SLIDE 14

Attractive growth opportunities

13

Wind Project Pipeline

Current wind energy pipeline of more than 500 MW Continuously looking for new sites for wind farm development with the objective of adding 2 project sites per year with at least 40-50 MW of wind power capacity each Potential sites depend on energy generation capacity, transmission lines availability and overall construction logistics Located in the Province of Chubut with an aggregate of 220 MW ready to build First stage (50 MW) with a total projected investment of US$105mm Estimated load factor of 52% based on over 5 years of wind statistics 6,240 hectare land owned for the project development

Madryn Wind Farm Project Thermal Project Pipeline

Commitment to install 200 MW of new thermal generation capacity by 2019 (Framework Agreement) Evaluating state-of-the-art technology with ability to run on biofuels Total investment to be partially funded through the CARFON² fund (US$7.4mm accrued as of 6/30/2014)

² Custodial account jointly managed by Genneia and CAMMESA, funded through monthly deductions from our ongoing PPAs with CAMMESA

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SLIDE 15

Solid shareholders’ platform and experienced management team

14

Management team

CEO Walter M. Lanosa

Joined the Company in 2012 More than 20 years of experience in the industry Held several senior positions at the Total Group

CFO Alejandro D. Lew Projects and Construction Director Arnoldo A. Girotti Legal Director Diego Abelleyra Human Resources Director Maria Cecilia Russo Commercial Director Federico Sbarbi Osuna Operations and Maintenance Director Ulises Soroeta Internal Auditing Pamela Vago

Joined the Company in 2012 Held various positions in the financial industry, including J.P. Morgan and HSBC and the Ministry

  • f Economy of the Republic of Argentina

Joined the Company in 2009 More than 50 years of experience in the industry Joined the Company in 2010 Previous experience includes senior positions at Marval, O'Farrell & Mairal, and other law firms Joined the Company in 2013 More than 25 years of experience in the industry Joined the Company in 2003 Former Commercial and Planning Manager in charge of the Natural Gas Transport Management at GENNEIA Joined the Company in 2013 Previous experience in Pricewaterhouse and Sullair, among others Joined the Company in 2012 Served as Senior External Auditor at Pistrelli, Henry Martin y Asociados S.R.L., members of Ernst & Young Global

Unparalleled combination of shareholders with deep expertise in the Argentine energy spectrum and financial industry

5% 12%

  • Investment company largely owned by Alejandro

Ivanissevich (70%+) with focus on energy projects

  • During the 1990s, A. Ivanissevich led Camuzzi Gazometri

SpA’s operations in Argentina acting as Executive Chairman for Sodigas Pampeana and Sodigas Sur and as Executive Vice President for Camuzzi Gas Pampeana

  • Mr. Ivanissevich was the first Argentine to serve on

the International Gas Union´s Executive Committee

  • Wholly-owned subsidiary of Fintech Advisory, a NY-based

investment fund managed by David Martinez

  • Focus on Emerging Markets (sovereigns and corporates)

with a long-term total return investment strategy (debt/equity positions alike)

  • Recently announced the acquisition of Telecom

Argentina´s controlling stake from Telecom Italia for US$960mm

  • Active investors having, among others, the largest

individual participation in Argentina-based Banco Macro (NYSE: BMA) with US$ 10bn in assets, 428 branches and 1109 ATMs

  • Jorge H. Brito and Jorge P. Brito currently hold positions

at Banco Macro as Chairman of the Board and CFO, respectively

FIDES GROUP S.A. FINTECH ENERGY LLC BRITO AND CARBALLO FAMILIES

Main shareholders

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SLIDE 16

Strong corporate governance and social responsibility

15 Board of Directors 10 Directors 10 Alternate Directors Supervisory Committee 3 Members 3 Alternate Members Audit Committee 2 Members Management Committee 4 Members

Meets at least once every three months Meets once every three months Meets once every three months – Supervises the Internal Audit Meets once a week – All decisions require a unanimous vote Approves annual Budget – Power to overrule any Management Committee decision

Corporate governance EHS standards and social responsibility

Quality, Environmental, Health & Safety Committee Ethics, Social Responsibility and Sustainability Committee

Other programs

Members: CEO + O&M Director + P&C Director + HR Director + Operations Manager + EHS Manager + HR Manager + Quality Processes Responsible Promotes, coordinates and supervises EHS and Quality management, assessing risks and responding to abnormal or unexpected situations Certifications: ISO 14001:2004 & BS OHSAS 18001:2007 Members: 2 Directors of the Board + CEO + HR Director + CSR Manager Ensures compliance with Company´s Sustainability and Respect for the People Values; identifies and manages stakeholders; promotes, coordinates and supervises the development of best practices through policies and procedures Corporate Culture: training, volunteering, ethics and compliance promotion, coordination with NGOs Social Investment: in schools education and NGOs sponsoring and donations

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SLIDE 17

GENNEIA has consolidated its cash flow generation capacity …

16

Consolidated EBITDA (US$MM) and EBITDA margin

42 57 62 74 31% 35% 37% 46% 2011 2012 2013 LTM 2014* Gross profit Gross margin 59 72 44% 44% 52% 59% 2011 2012 2013 LTM 2014* EBITDA EBITDA margin 86

Gross profit (US$MM) and gross margin Revenues (US$MM) Operating cash flow vs. CAPEX (US$MM)

Note: Operating cash flow calculated as consolidated EBITDA minus net interest expense and cash tax expense.

134 162 166 163 2011 2012 2013 LTM 2014* 97

* Last 12 months as of 6/30/2014

39 44 49 63 66 51 98 31 2011 2012 2013 LTM 2014* Operating Cash Flow CAPEX

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SLIDE 18

59% 56% 67% 67% 2011 2012 2013 LTM 2014*

… and has established prudent financial policies

17

Financial objectives and policies

Extend the Company’s maturity profile to better align it with the Company’s long-term operations Financial debt primarily in US$ based on dollar-denominated long- term PPAs Target long-term senior leverage in the range of 2.5 to 3.0x No dividend payments planned for the foreseeable future –free cash flow to be reinvested in the business Availability of working capital lines as a source of liquidity

Leverage ratios¹ Senior Debt / Total capitalization (%) Total debt and net debt evolution (US$MM)

4,4x 3,3x 3,6x 2,9x 3,5x 2,6x 3,0x 2,4x 3,4x 2,6x 2,7x 2,2x 2011 2012 2013 LTM 2014* Total Debt/EBITDA Senior debt/EBITDA Net Senior Debt/EBITDA

  • 210
  • 190
  • 259
  • 230

50 50 50 50 260 250 240 238 309 286 280 263 Senior debt Subordinated debt Net debt 2012 2013 2011 LTM 2014* 2.9x 2.2x 2.2x

Interest coverage ratio ¹ Ratios calculated using US dollar converted figures; Total Debt, Senior Debt and Net Senior Debt based on

end-of-period FX; EBITDA based on average FX

2.9x

* Last 12 months as of 6/30/2014

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SLIDE 19

Current debt maturity profile

18

4 7 5 5 1 24 76 60 48

  • 2014

2015 2016 2017 2018

Debt in local currency (ARS)¹ Debt in USD (including USD Linked) Subordinated USD Debt 1

Debt maturity profile – as of June 2014 (US$MM)

Currency breakdown

USD Linked 69% USD Sub 18% Local currency 8% USD 5% Total debt: US$280mm

133 28 50 65 53 As of 6/30/2014: Total debt: US$280mm Total senior debt: US$230mm Net senior debt: US$213mm Avg life: 1.7 yrs2

¹ Debt in local currency converted into USD. 2 Average life calculation excludes Subordinated USD debt Note: Subordinated debt (Class V notes) are fully subordinated to Class II & III notes. Payment failure does not provide for holders’ rights to accelerate nor declare default. Upon maturity, if not fully repaid, the Class V notes are convertible, at holders’ option, into Class A preferred stock of GENNEIA

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SLIDE 20

Investment Highlights

19 Solid shareholders platform and experienced management team Successful growth track record on the back of stable and predictable cash flows Attractive growth

  • pportunities

Leading player in the development of new power generation focused on renewable energy sources Strong corporate governance and social responsibility Consolidated cash flow generation coupled with prudent financial policies

1 2 4 5 6 3

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SLIDE 21

Appendix

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SLIDE 22

Issuer

Corporate structure

*Adjusted taking into account call options and participations assigned by Fintech to Andreas Keller S. and Fides

95% 95% 90% 93% 71% 99% 95% 95%

GENNEIA S.A.

Ingentis II Esquel S.A. Genneia Desarrollos S.A. Enersud Energy S.A. IWS Energy Service S.A. Nor Aldyl Bragado S.A. Nor Aldyl San Lorenzo S.A. International New Energies S.A. Patagonia Wind Energy S.A.

20% 20% 43%

Fides* Fintech* Brito and Carballo families Andreas Keller S.* Others

12% 5%

21

Restricted Subsidiary Unrestricted Subsidiary 28%

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SLIDE 23

Electricity Market Framework

22 After experiencing serious energy shortages in 2007, the authorities enforced new regulation to actively support the deployment of new capacity from diverse technologies, providing generation companies with long-term PPA contracts as counterparties to the wholesale electricity demand (WEM)

  • Res. #220/2007

(10 years)

  • Res. #1836/2007

(3 years)

All regulation issued by National Energy Secretariat

  • Res. #712/2009

(15 years)

  • Res. #108/2011

(15 years)

THERMAL RENEWABLE

Law #26,190 of December, 2006 promoted the diversification of the national energy matrix, endorsing the use of renewable energy and contributing to mitigate climate change. The Law establishes an 8% share objective to be reached by the year 2016 of renewable energy in the national electricity generation matrix

+

The authorities also enforced the deployment of the Distributed Energy Program (ED I & II). ENARSA*, acting as generator (according to Resolution #1836/07), was able to subscribe PPA contracts with CAMMESA for new generation capacity to be installed by several contractors of ENARSA under ED I & II

+

*ENARSA is a state owned company and is engaged in the exploitation of petroleum and natural gas, and the production, industrialization, transport and trade of these and of electricity

The National Energy Secretariat (SEN) is responsible for policy setting and regulation, while the National Electricity Regulator (ENRE) is the independent entity responsible for applying the regulatory framework CAMMESA, is the local entity responsible for the administration of the Wholesale Electricity Market (“WEM”),

  • wned 20% by the Argentine government and 20% by each of the associations representing the WEM agents,

including generation, transmission and distribution players as well as large consumers Electricity is generated by dozens of private (75% of total) and state-owned companies in a relatively liberalized marketplace, while the transporters and distributors of electricity are heavily regulated as natural monopolies

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SLIDE 24

Electricity Market and GENNEIA

23

  • Res. #1836/2007 PPA

(3 years)

  • Res. #220/2007 PPA

(+7 years) ENARSA (ED Program) GENNEIA GENNEIA GENERATOR AGENT CONTRACTOR CAMMESA MARKET

  • Res. #1836/2007 PPA

(3 years) BEFORE NOW Latest Changes in Regulation and expectations for the future

  • Similar to the Distributed Energy Program for thermal power generation, in 2009 Authorities enforced the deployment of a Renewable Generation Program (GENREN).
  • ENARSA as generator (according to Resolution #712/09) was able to subscribe PPA contracts with CAMMESA for new renewable generation to be installed by contractors of ENARSA

under GENREN

  • Lately, in 2011, according to Resolution #108/11, the SEN authorized the execution of PPA contracts between the wholesale electricity market for new energy generation from

renewable sources proposed by private generation agents, co-generators and self- generators

  • Resolution #95/2013 changed pricing levels in the spot market from market price (marginal cost system) to cost-plus (regulated cost of production + additional payment)
  • Resolution #95/2013 restricted the subscription of PPAs between private parties  CAMMESA now concentrates the relation between generator and consumers
  • Due the fact that electricity system in Argentina is short of generation capacity, it is reasonable to expect that Government would not enforce policies against those market participants

which have recently installed new capacity

  • All PPA subscribed with WEM (Res. #1836, #220, #712, #108) are decoupled from intervened Argentina’s electricity market new regulation  Resolution #95/13
  • Challenges for any new Administration will be incorporating real generation costs into the tariff and new incentives to attract new generation projects. Both are beneficial for GENNEIA

2007 marked the starting point of GENNEIA in thermal electricity generation activities. Acting as contractor of ENARSA, GENNEIA installed 273 MW ISO of ultimate generation turbines at seven different sites across the provinces of Buenos Aires and Entre Ríos. PPA contracts were signed with ENARSA for three years During 2011, GENNEIA negotiated with the energy Authorities the extension of the contracts for additional seven years under Resolution #220/07 (acting directly as a wholesale electricity market generator). New PPA contracts were signed with CAMMESA

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SLIDE 25

Operational Overview

24

Energy source Installed capacity (MW) Status Price for firm capacity (US$/MWh) Required availability factor (%) Availability factor 2013 Price for electricity delivered (US$/MWh) Net generation (GWh) Capacity contracted Expiration date Thermal Power Plants Gas/Diesel 280 87.4% 701 100% Matheu Gas/Diesel 42 Effective 21,275 92% 69.4% 10.00 / 14.90 59 100% 11/18/2018 Paraná Gas/Diesel 42 Effective 21,275 92% 97.0% 9.16 / 14.90 83 100% 6/23/2019 Concepción del Uruguay Gas/Diesel 42 Effective 21,275 92% 99.1% 8.70 / 14.90 82 100% 10/20/2019 Olavarría Gas/Diesel 42 Effective 21,275 92% 98.3% 9.07 / 14.90 91 100% 9/21/2019 Las Armas I Gas/Diesel 10 Effective 21,275 92% 98.8% 10.00 / 10.65 30 100% 11/17/2019 Las Armas II Gas/Diesel 25 Effective 21,275 92% 90.0% 7.45/10.23 116 100% 1/20/2021 Bragado Gas/Diesel 50 Effective 21,275 92% 66.0% 7.45/10.15 102 100% 6/15/2021 Pinamar Gas/Diesel 20 Effective 21,275 92% 97.6% 9.18 / 10.65 116 100% 2/15/2018 Gobernador Costa Gas/Diesel 3.5 Effective 22,000 N/A 99.7% 160 12 100% 12/31/2025 Río Mayo Gas/Diesel 3.5 Effective 22,000 N/A 95.4% 160 10 100% 12/31/2025 Rawson Wind Farm Wind 77.4 96.8% 290 100% Rawson I Wind 48.6 Effective N/A N/A 97.5% 128.7 181 100% 1/1/2027 Rawson II Wind 28.8 Effective N/A N/A 95.6% 124.2 109 100% 1/20/2027

Summary Operational Overview

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SLIDE 26

Financial Highlights

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Summary Income Statement Summary Balance Sheet

US$mm 2011 2012 2013 Continuing operations Net sales 134.4 162.4 166.2 Cost of sales (92.6) (105.5) (104.4) Gross profit 41.8 56.9 61.9 Selling expenses (1.3) (2.6) (1.6) Administrative expenses (13.1) (16.8) (14.6) Other expenses, net (1.6) (3.9) (0.1) Financial expense, net (24.6) (39.6) (58.8) Net (loss) income before tax 1.3 (6.0) (13.2) Income tax (3.2) (4.3) (7.4) Net loss from continuing operations (2.0) (10.3) (20.7) Discontinued operations Loss from discontinued operations (0.4) (2.0) (0.9) Net loss for the year (2.4) (12.3) (21.5) US$mm 2011 2012 2013 Assets Total current assets 78.1 88.9 103.6 Total non-current assets 356.7 332.4 393.2 Total assets 434.8 421.3 496.8 Liabilities Total current liabilities 127.5 127.0 147.0 Total non-current liabilities 213.1 195.0 272.0 Total liabilities 340.6 322.0 419.0 Total shareholders' equity 94.2 99.3 77.8 Total liabilities and shareholders' equity 434.8 421.3 496.8