China wind power fy2010 agm presentation

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China wind power fy2010 agm presentation

  1. 1. Annual General MeetingDecember 2, 2010
  2. 2. Forward-looking statementsThis presentation contains “forward-looking statements” within the meaning ofapplicable securities legislation. Forward-looking statements may include financialand other projections, as well as statements regarding future plans, objectives oreconomic performance, or the assumption underlying any of the foregoing.Forward-looking information involves significant risks, assumptions, uncertaintiesand other factors that may cause actual future results or anticipated events to differmaterially from those expressed or implied in any forward-looking statements andaccordingly, should not be read as guarantees of future performance or results.Accordingly, investors should not place undue reliance on any such forward-lookingstatements. Further, any forward-looking statement speaks only as of the date onwhich such statement is made, and we undertakes no obligation to update anyforward-looking statement or statements to reflect information, events, results,circumstances or otherwise after the date on which such statement is made or toreflect the occurrence of unanticipated events, except as required by law, includingsecurities laws. 2
  3. 3. About China Wind Power International Corp. China Wind is uniquely positioned to capitalize on the growing demand for wind energy in China •3 3
  4. 4. A tremendous opportunity for following four main reasons: Demand China Exclusivity Du Mon County Guaranteed Power Purchase Agreement Profitable 12-14% IRR, and higher for future projects •4 4
  5. 5. China Overview• Rapid industrialization• Looming energy shortage• Facing one of the world’s biggest world’s environmental crisis 5 Source: IEA
  6. 6. China’s commitment to wind power 2008 2009 2010 2020 12.0 GW 25.8 GW Target 30 GW 100 GWChina: 4th 2009 2nd today 1st tomorrow 6
  7. 7. We make it, they take itGuaranteed demand• National Renewable Energy Law, effective January 2006• Grid is obligated to purchase all output!for China Wind• Heilongjiang Provincial Power Grid must buy our electricity 7
  8. 8. Our current focus: Heilongjiang Province Beijing Exclusive rights to Shanghai Wind Power Generation Du Mon County, HeilongjiangHeilonjoang ProvincePopulation: ~38 millionAnnual electricity use by 2010*: 74 million MWh 8* forecast 8
  9. 9. Favourable location On-grid Tariff: 0.61 Yuan/ KwhBeijing Power Grid <2km Shanghai Wind Speed 70m: 6.9-7.5 m/s Well Located • Flat, solid ground • Easy access with roads and highways 9
  10. 10. Our portfolio 546 MW over 5 development phases: 49MW in commercial operation (P1) 49.5MW in construction (P2) 448.5MW in development (P3~4)Beijing Shanghai Included in power grid master plan Longer-term potential for building out 1,150 MW 10
  11. 11. China Wind — Phase 1 Phase 1: 49 MW Phase 2: 49.5 MW Phases 3-5: 448.5 MW Status Turbines Financing Completed Commenced 26% 34 turbines equity commercial producing Production 74% power Dec. 2009 debt67 GWh generated at June 30, 201093.2 GWh generated at October 30 2010 11
  12. 12. China Wind — Phase 2 Phase 1: 49 MW Phase 2: 49.5 MW Phases 3-5: 448.5 MW Status Turbines Financing Completed 15 35.15% Construction installed, equity half-way 20 on 65.85% completed order bank* 330 million RMB (US$49) bank loan has been approved at a variable Interest rate. 12
  13. 13. Turbine Overview: Phase 1 and 2 DW1.0/56 HFDY1500/77 DT-1500 Two-Bladed Directly Driven Doubly FedPhase 1Phase 1 4 30Phase 2 6 10 19Phase 2 (Installed) ( 9 installed) 56% of all globally installed wind power equipment is manufactured in China (2007) 13
  14. 14. Our progress in FY2010 14
  15. 15. Key Milestones• Completed take over of Berkshire Griffin• Began trading on TSX-Venture• Commenced commercial production• Raised $5 million in non-brokered private placement• DuMon County sites identified as key areas in Province’s Master Plan 15
  16. 16. Annual ResultsSales Revenue(thousands) (thousands) $3,829 $1,719 $407 $0 2009 2010 2009 2010 Commercial production of energy begun in Q2 16 16 Total assets at year-end was $114 million
  17. 17. Annual ResultsAdjusted EBITDA Power Produced(thousands) (GWh) $482 4.7 2009 2010 0 2009 2010 ($798) EBITDA excludes stock-compensation charges 17 17 Power produced at 65% capacity
  18. 18. Recent Progress 18
  19. 19. Q2 ResultsSales Revenue(thousands) (thousands) $1,217 $1,217 $705 $0 FY2010 FY2011 FY2010 FY2011 Commercial production well underway 19 19 Operating at 65% capacity
  20. 20. Q2 ResultsAdjusted EBITDA Power Produced(thousands) (GWh) $1,291 1.52 FY2010 FY2011 0 ($393) 2009 2010 Record revenue, EBITDA 20 20 Net loss lowest ever
  21. 21. Q3 Milestones to Date• Generated 1.1 GWh of electricity in October• Continued construction of Phase 2• Raised $4.3 million in non-brokered private placement• Final stages of $50 million bank loan agreement 21
  22. 22. Looking Ahead 22
  23. 23. Phase 2: project timeline Q1/09 Q3/09 Q4/09 Q4/10 Q2/11 Construction Equity Turbines Debt Construction commenced financing installation financing completed commenced. approved All foundations completed 23
  24. 24. China Wind — Phases 3 to 5 Phase 1: 49 MW Phase 2: 49.5 MW Phases 3-5: 448.5 MW Status Turbines Financing (targeted) Phase 3 30% Phase 4 & 5 equity (200MW) feasibility 299 turbinesclose to get studies planned 70% final underway debt approval Phase 3 projects (198MW) will be financed using EPC Contract. 24
  25. 25. Phases 3 to 5: project timelines Phase 3 Phase 4 Phase 5 (Sino-Denmark) ~100MW ~150MW 198 MW Q4/11 Q4/12 Q3/13 Construction Construction Construction completed completed completed Q1/11 •Q3/10 Q1/12 •Q4/11 Q3/12 •Q2/12 Construction Construction Construction Construction Construction Construction commences commences commences begins begins begins 25•25 Construction phase ~ 12 months
  26. 26. Business model: costs and revenues*Total ~49M Project Cost Total Revenue for 49MW(including installation) Phase 1 & 2 * Phase 3 ** Electricity Production • Production: 110,743 MWh/yrTurbines/towers: US $53.6M US $46.8M • Power Price: 0.61 Yuan/KwhConstruction: US $13.1M US $10.5M (=US$92/MWh) • Revenue: US$8.82 M /yr *Interest: US $4.1M US $2.9M • 20 Years PPAOther: US $2.2M US $4.2M * Based on 20 years average for the Phase I (49MW) or II (49.5MW).Total: US $73.0M US $64.4M ** Based on 20 years average for (~12% lower) one 49.5 MW wind farm of the Phase 3 (total 4 wind farms, 198MW). 26
  27. 27. Targeted project economics for Phase I & II *(20 year average for one 49 MW wind farm)Installed capacity 49MWCapacity factor 26.31%Revenue: wind power * US $8.8MTotal revenue * US $8.8MEBITDA * US $6.7MTotal profit after tax * US $1.6MAnnual cash flow to equity * US $2.3MCapital cost/MW Levered equity IRRLess than US $1.5 million 10-12% * Based on 20 years average 49 MW project for Phase I and II. 27
  28. 28. DemandChinaExclusivityDu Mon CountyGuaranteedPower Purchase AgreementProfitable12-14% IRR 28
  29. 29. Wendell Zhang Wendell Zhang Chief Financial Officer Chief Financial Officer 416-916-4205 416-916-4205• • wzhang@chinawindpowerinternational.com wzhang@chinawindpowerinternational.com • www.ChinaWindPowerInternational.com • www.ChinaWindPowerInternational.com twitter.com/ChinaWindPower twitter.com/ChinaWindPower 29

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