Oasis Power Company An EM-Focused Clean Power Generation Platform
Table of Contents Ta Ex Executi tive Summary ry 3-5 Th The Macro Opportunity 6 Th The Market Opportunity 7 Va Value Propo position 8 ` In Investm tment t Stra trate tegy & Value Cre reati tion 9-12 12 Seed Ca Seed Capital/Equi uity Inj njec ections ns 13 13 Ba Basic I c Inve vestment P Proce cess 14 14 In Investm tment Sc Screeni eening ng Fo Focus us 15 15 Comp Co mpany ny Over erview ew 16 16 Pr Proposed Company Structure 17 17 Fo Footprint nt & & Dea eal Pipel eline ne Sum Summary 18 18-25 25 Pr Proposed Or Organization Struct cture 26 26 The Te Th Team 27-31 27 31 Ex Exit t St Strateg egies es 32 32 Appendices Ap 33 33 Why Nigeria? Why Pakistan? Why Kazakhstan? 34 34-36 36 • Deal Pipeline – One Page Summary To To be be Pr Provided La Later • Case Study: K-Electric “Turn Around” 37-39 • 2
Ex Executive ve S Summary ( y (1/ 1/3) 3) Building a 3 GW Cle Bu lean Po Power Pla latform wit ith $100m $100m of of Seed Seed Eq Equity fr from Anchor Investor (AI) A 3 GW GW gr gross (1 GW GW net net) Clean Power Generation Platform Company § By#Geography across Non-BRIC Emerging & Frontier Markets with core geographical $MM focus on Sub Saharan Africa, South Asia, and Non-GCC MENA regions ` Led by a Te Team of seasoned Power & Energy Infrastructure executives § 22% with nearly 100 years of Business Development, M&A and Operational 33% experience in leading energy focused companies and private equity infrastructure funds (AES, GE, Enron, K-Electric, The Abraaj Group, etc.) 45% across the emerging markets A lean hold-co structure comprising 10 10 fu full ti time em employees ees on only § South+Asia Sub+Saharan+Africa Cent+Asia+&+East+Europe and all non-core functions to be out-sourced By#Investment#Mode A well diversified Ta Target Po Port rtfolio along the three axes of EM Countries, § $MM Stage of Investment Cycle (Greenfield, Brownfield, etc.) and Proven Clean Technology (Wind, Solar, Hydro, Gas-Fired) A disciplined investment approach through a structured Screening § 48% Criteria (“16 Filters”) and an actionable & robust “Category 1” De Deal 52% Pipel Pi eline ne of 7 projects Full deployment of the total paid-up E qu quity Ca Capit ital of $300m within 2-3 § years of company incorporation (target date: 1 July 2017) Brownfield/Operational Greenfield 3
Ex Executive ve S Summary y (2/ (2/3) 3) Bu Building a 3 GW Cle lean Po Power Pla latform wit ith $100m $100m of of Seed Seed Eq Equity fr from Anchor Investor (AI) All underlying project Di vested prior to Platform Exit i.e. OPC primarily designed Dividends ma may be be Re Re-in inve § as a Growth (Capital Appreciation) product not a yield-play Target Ex Ta Exit in in Ye Year 6 (2023 2023) either through a Trade Sale to a Strategic / Yield Seeking Investor or IPO on § ` a regional or international stock exchange with a Platform Ex Exit IR IRR of of 22 22.3% (c (conservat ative ba base ca case) & MOIC of MO of 2.3x based on current deal pipeline/target portfolio and recent trading & transaction comps ority or Stra Stake in, and active oversight (Board Membership, Contractual Reserved Major Ma Strateg tegic Mi Minor ority Sta § Matters, etc.) of the underlying investee companies all of which financed on non-recourse debt basis against secured cash flows through lo long-term term PP PPAs an and hed hedging ng of of cu currency cy ri risk, etc etc. By#Technology TARGETED PA TA PAID-UP UP CAPITAL 2.3x $MM 07/2017 Anchor)Investor $)100mn 07/2018 Other)Investors $)100mn 07/2019 Other)Investors $)100mn DEPLO LOYMENT OF CAPITAL 2017*18 $100mn $65mn 527 2018*19 44% $70mn 2019*20 56% TA TARGETED EXIT YEAR OT OTHER OP OPC INVESTOR ORS ANCHOR Gross)MWs)Installed 2,811)MW FUNDS 2.3$x MOIC 8%9x 100 65 70 EV/EBITDA) 22.3% OPC)Platform)IRR Ju July' 17 Ju July' 18 Ju July' 19 Ju July' 20 Ju July' 21 Ju July' 22 Ju July' 23 TA TARGETED EXIT YEAR Gas(Based,Thermal Renewable, Energy JULY%DEC) 2023$ (6 th Year) 4
Executive Ex ve S Summary (3/ y (3/3) 3) Building a 3 GW Cle Bu lean Po Power Pla latform wit ith $100m $100m of of Seed Seed Eq Equity fr from Anchor Investor (AI) 2017%2023 Access Ac ss to to wo world ld cla class tec techni hnical su support, pi pipe peline an and § fi finan ancing through th Strateg Stra tegic Pa Partners rtnershi hips and Anchor Other relationships - Meralco, PowerChina, Engro, IFC, Investor Shareholders cil comprised AfDB, FMO, etc. and an Ad Adviso sory Co Council of energy/infrastructure sector experts $100m $200m Investment landscape in the target region expected § Oasis Power to maintain positive trajectory: Company Improving governance standards, peaceful § Development $37m Company transition of governments, economic growth & $263m diversification, urbanization and increase in Asset Company Development private consumption, regulatory framework Asset Company Company Dev Co to ‘seed’ fully and a bankable security package in place with developed projects to Asset attractive US$ indexed tariffs, etc. However… Co at financial close Sovereign (Political & Macroeconomic) Risk § Various Asset & Portfolio mitigation to be a top investment criteria with Companies ver taken where feasible from a MI MIGA-ty type co cove cost-benefit standpoint Best-in-class Co Corporate Governan Go ance, Ri Risk § bility , etc. policies to be Ma Management, ES ESG/S /Sustainabi Co-Investors Project Lenders ($730m) co as well as Asse implemented at the Ho Hold ldco Asset Co Co le leve vel 5
Th The Macro Op Opportunity The following key attributes are converging to create an increased need for energy infrastructure Africa, with on only ly 37.3 % of of the pop opula lation ion liv ivin ing in in urban areas in in 1999 , and a growth rate of Increasing Urbanization & 4.87%, is the continent with the fastest rate of urbanization. In last ten years, urbanization has Mobility 1 been growing at an av averag age 4% in Africa a an and 2.9% in South Asia a as compared to World Average of 2.1% 2.8 billi 2.8 b llion p people f from g growth th m markets w s will ll e enter th the m middle c class b ss by 2030. 2030. Rising income has a direct correlation with energy consumption resulting in increased need for related energy Growing Middle Class Increasing Urbanization & Mobility infrastructure to support the growth Investment is needed in both new and existing infrastructure in almost all growth markets, Historic underinvestment especially in Sub- Sahara region. Ov ing in Sub-Sahara Africa do not Over 65% of of the peop ople le liv ivin in Infrastructure have access to electricity (World Bank: 2012 figures) These factors are driving the demand for additional investments in the power generation sector Source: ¡United ¡Nations 6
The Market Op Th Opportunity Power is a priority investment sector in the Sub-Saharan Africa and South Asia “Target Region” in the coming decade to support economic growth. Investment in excess of US$ 40 Billion is required in • 10x Africa alone to meet current and projected demand. OPPORTUNITY GAP Opportunity for private investors to participate in • well structured IPP projects with bankable security 487 packages. 152 285 OPC provides a ready and executable pipeline of 276 • 52 projects in the Target Market to capitalize on the opportunity Latin La in Am Americ ica North Af Afric ica SouthEast As Asia ia South As Asia ia Sub-Sahara Sub Sahara Regio ion 7
Va Value Proposition • High economic growth in the Ta Target Ma Market et underpinned by rising middle class and urbanization but constrained by significant power/energy gap Favorable Markets & Regulatory Framework • Significant regulatory and structural reforms to facilitate private “growth capital” investment in the power sector Power sector is a priority area for DFIs with significant pool of debt available on non- • Availability of Long-Term recourse long term basis Funding Local Banks participate actively in DFI supported projects in view of credible security • structure • A strong team with extensive experience in the Target Region • Rich experience across the development, financing, construction, and operational phases of Experienced Team power and related infrastructure projects • Deep industry-wide relationships with governments, regulators, developers, and capital providers • Secured cash flows through long term PPAs and other arrangements • Hedging of currency and inflation risks through contracts & other down-side protection structures Secured Cash Flows with • Attractive cash-on-cash dividend yield on project commissioning Attractive Returns • A well thought-out target portfolio blended across geography (zip code), sub-sector (conventional and renewable), and stage of investment cycle (green-field, operating, etc) • A robust, actionable and visible deal pipeline across the Target Region Robust & Actionable • Ability to quickly deploy the paid up capital to enhance the net Investor IRR Deal Pipeline 8
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