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China Wind Power International Corp. Briefing Memo 20090601
 

China Wind Power International Corp. Briefing Memo 20090601

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China Wind Power International Corp. is a Canadian-incorporated company that is wellpositioned...

China Wind Power International Corp. is a Canadian-incorporated company that is wellpositioned
to capitalize on the growing demand for wind power in China. China Wind has the exclusive rights for wind energy
development in Du Mon County, which is a very favourable location for wind power generation. The Company’s portfolio
consists of 8 wind farms totaling 547MW to be developed in 5 development phases, with a longer-term potential for building out
860MW.

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    China Wind Power International Corp. Briefing Memo 20090601 China Wind Power International Corp. Briefing Memo 20090601 Document Transcript

    • Page 1 China Wind – Overview • China Wind Power International Corp. (“China Wind” or the “Company”) is a Canadian-incorporated company that is well- positioned to capitalize on the growing demand for wind power in China. China Wind has the exclusive rights for wind energy development in Du Mon County, which is a very favourable location for wind power generation. The Company’s portfolio consists of 8 wind farms totaling 547MW to be developed in 5 development phases, with a longer-term potential for building out 860MW. • Wind Farm #1 (49MW Ruihao) is fully-financed and permitted, with construction now 60% complete. Wind Farm #1 has a 20- year power purchase agreement (“PPA”) in place and has forward-sold its green credits to Goldman Sachs. China Wind – Investment Highlights • Strong Government Support for Renewable Power in China with Guaranteed Demand: • 15% of all power in China from renewable sources by 2020, and power grid is obligated to purchase all renewable output • Exclusivity in Du Mon County: • China Wind has exclusive rights to wind power generation in Du Mon County • Compelling Economics: • >12% IRR generated through (i) 20-year PPA, (ii) forward-sale of green credits to Goldman Sachs, (iii) favourable debt terms, and (iv) competitive turbine pricing • Achievable Development Plan: • 547MW to be developed in 5 phases by 2014 with $24M out of $25M required to complete equity financing for Wind Farm #2 already committed and bank financing secured subject to completion of equity financing Chinese Government Support for Wind Power Exclusivity in Du Mon County • China’s target to have 15% of all power from renewable • China Wind has exclusive rights to wind power generation sources by 2020 is not just a goal … it’s the law! in Du Mon County • China’s Renewable Energy Law of 2005 requires power • There is much need for renewable energy in the region as grid companies to buy all output of local renewable energy Daqing oilfield reserves and crude oil output decline, raising producers fears of a looming energy shortage in the region Total Energy Demand • Facing (1) continuously (millions of tonnes of oil equivalent) • Wind assessment studies in Du Mon County demonstrated increasing demand for 2000 potential installed capacity of 860MW of wind energy energy, and (2) one of 1500 developable over an area of 220 sq km the world’s biggest 1000 • China Wind’s planned wind farms are included in the Power environmental crisis, 500 Grid Master Plan of Daqing City, which means there are no China’s installed wind 0 foreseeable barriers to hooking up to the grid capacity of +12GW 91 93 95 97 99 01 03 05 19 19 19 19 19 20 20 20 currently ranks in the top 4 in the world, and Power Grid <2km Beijing by 2020, is projected to total 100GW (1st in the Shanghai world) Wind Speed 70m: 6.9-7.5 m/s Looming energy shortage China Wind Power International – Page 1
    • Page 2 Wind Farm #1 (49MW Ruihao) Status Status Turbines Turbines Financing Completed Financing Completed Total Equipment Cost Turbines/Towers US$53.6M Construction US$13.1M 26% Interest US$4.1M equity Other US$2.2M 50% of 60% of 23 of 36 turbines Total US$73.0M construction construction completed completed installed 74% Capital Cost / MW <US$1.5M bank* Project Economics Revenue (wind) US$8.5M Revenue (credits) US$1.8M • • Power PurchasingAgreement Power Purchase Agreement 18 currently currently (US$89 / MWh) * VariableVariable rate; 5.94% * rate; currently EBITDA US$8.3M • Grid Connection Agreement producing producing • Green Credit Forward Sale power currently 5.94% Net Income US$3.2M • Green Credit Forward Sale power (US$14.81 / CO2 ton) Cash Flow to Equity US$3.9M • Grid Connection Agreement Project IRR >12% Development Plan to 2014 Construction Installed Phases Projects Period Status Capacity (MW) (quarter/year) Phase I Wind Farm #1 (Ruihao) Q3/2007-Q4/2009 49.0 Over 50% complete. All paperwork is finished. Phase II Wind Farm #2 (Ruifeng) Q2/2009-Q4/2009 49.5 Officially approved by Heilongjiang DRC. All paperwork is finished. Wind Farms #3 Phase III Q2/2010-Q4/2011 100.0 In the process of application (Guofeng) and #4 (Ruili) for approval. In the process of feasibility Phase IV Sino-Demark Q2/2011-Q4/2013 200.0 study. Guofeng, Yuanfeng, In the process of feasibility Phase V Q2/2012-Q4/2014 148.5 Tongfeng study and paperwork. Total Q3/2007 – Q4/2014 547.0 China Wind Turbine Supply • In 2007, 56% of all globally installed wind power equipment was manufactured in China • Wind Farm #1: • 10 sets of 1MW turbines from Wuhan Guoce Nordic • 16 sets of 1.5MW turbines from Daqing Deta Electric • 10 sets of 1.5MW turbines from Hanwei Wind Power • Wind Farm #2: • 33 HV-1500 Deta / Hanwei Wind wind turbines (same 1.5MW turbines used in Wind Farm #1) – US$908 / kW • Future Wind Farms: • Hanwei will have the first refusal right to offer all future equipment for wind farms owned or controlled by China Wind, and Hanwei will allow China Wind to purchase all additional equipment manufactured by Hanwei at market prices China Wind Power International – Page 2