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Psc geif summary investment offer5 Psc geif summary investment offer5 Document Transcript

  • Investment Offer PresentationSolar power generation in Switzerland Power Synthesis Capital AG Summer 2012Confidential Tuesday, August 28, 2012! ! 1
  • Global Energy Investment Fund (www.geif.eu) is the unlimited structured fund, registeredOctober 2011 in Principality Liechtnstein. GEIF is an open share investment fund for qualified investors totaling EURO 200 million.  Minimum amount of investment is set at 250 thousand CHF.  The target index for GEIF is a 15% annual yield for medium- and long-term investments with allowance for an optimum risk-return ratio. GEIF funds are invested mainly in shares of selected projects in the amount of 25-100% of the registered capital.  GEIF invests in two fields: “power generation based on renewable energy sources” and “green / energy efficient / energy saving technologies”.   The Fund Administrator is Valartis Fund Management (Liechtenstein) AG.  GEIF auditor–ReviTrust AG Liechtenstein.  Custodian Bank–Valartis Bank Liechtenstein AG.The unlimited structure was chosen to set both the fund value and term in accordance withmarket requests. Initial investment lock up period - 4 years. The Asset Manager is Power Synthesis Capital AG - PSC - (Switzerland) - established in April 2011. PSC has got the duly registered representation office in Russia (Moscow), accredited with Swiss Business Hub of Swiss embassy and introduces wealth management services (www.pscapital.ch). Ecolution Engineering AG (ecolution-engineering.ch) EEAG - is the engineering company, conducting design of PV projects based on combination of “clean” technologies and the very up-to-date know- hows, with further follow-through, performace controls and “turn-key”construction survelliance outsourcing EPC companies. EEAG selects such EPC contractors inaccordance with tender procedure. Further EEAG conduct PV project technical management ,performance monitoring and in-house maintenance.Both PSC and EEAG represent the joined group to asset manage and PV system supply forGEIF. Together we provide for complete expertise and arrangement to develop, launch, andmanage PV systems covering administration, legal, financial and management issues.Confidential Tuesday, August 28, 2012! ! 2
  • Target Market: December 2011 the Swiss government adopted the program to get rid of existing nuclear power stations at the territory of Switzerland by 2030 and substitute thus emerging power gap by alternative power generation in particular PV installations. The Feed-in-tariff (FIT) schedule for the term of 25 years was adopted to stimulate the solar power generation. Current range 0,26-0,45 CHF. Current FIT is 0,39 CHF/kWh applicable for roof-top installations of up to 100KW capacity, in case over 100kW - 0,37 CHF/kWh. However starting October 1, 2012 DETEC (Federal Department of Environment, Transport, Energy and Communication) reduced FIT by 15% in average to 0,36 CHF representing at target PV system type 0,33 CHF and 0,31 CHF respectively. The FIT program is funded by KEV fund managed by Swiss goverment and is currently exceeds 1 bln.CHF per annum. The FIT is degraded by 8% p.a. and to avoid speculations at the market (negative experience of Czech Republic) the lock up period of 24 month is introduced for the FIT receipt by a PV generation facility. For the lock up period of 24 months regular local municipality grid power purchase agreement are actng with average tariff of 0,20 CHF will apply. Currently the PV share in Swiss energy sector is 0,1%. In accordance with the state plan the share of PV in the energy sector should be not less than 25%.PV potential estimation utility 30.07. PV roof-top installations - are the major subsidized objects due to the fact that the land is Photovoltaic Geographical Information System - Interactive Maps expensive and mostly allocated for agriculture needs. The above stated optimal FIT is dedicated for roof-tops. The total volume of roofs applicable for PVContact Important legal EUROPA > EC > JRC > IE > RE > SOLAREC > PVGIS > Interactive maps > europe cursor position: installations in Switzerland is 200 sq.km. To substitute the nuclear power production capacity of 4,5GW only Daily radia e.g., "Ispra, Italy" or "45.256N, 16.9589E" 47.902, 7.888 PV Estimation Monthly radiation Search selected position: 90 sq.km. of roofs will be enough to install PV installations. The estimated capital cost is ca. 10 Performance of Grid-connected PV bln.CHF and annual turnover (taking average FIT annually degraded and 24 month lock up Radiation database: [What is this?] period) should exceed 1,5 bln.CHF. PV technology: Crystalline silicon Although solarpower 1 Installed peak PV radiation level kWp in Switzerland is not Estimated system losses [0;100] 14 comparable with regions close % tFixed mounting q u a t o r, o the e options: the performance and Free-standing of Mounting position: efficiency PV systems are substantially (Azimuth Slope [0;90] dependable on temperature Optimize slope from -180 East=-90, 35 ° and altitude. These two South=0) Also optimize parameters in Switzerland have Azimuth 0 ° azimuth good value as most PV Tracking options: installations are above 400 Vertical Slope [0;90] meters over sea level and 0 ° annual average temperature Optimize axis is beneficial for Slopeperformance. Inclined the [0;90] Additionally, Swiss ° axis 0 government Optimize 2-axis is considering de-centralized tracking PVGIS © European Communities 2001-2007 power stations as a future asset - Horizon file of the Swiss Power grid.Solar radiation Temperature Other maps Datei auswählen Keine Datei ausgewählt Output options Show Show graphs horizon Confidential Tuesday, August 28, 2012! ! 3 Web page Text file PDF
  • 11. Graphiken Photovoltaik11. Graphiken Photovoltaik11.1 Verkäufe Photovoltaik-Module (kWp)The latest Market research from the government shows that the adopted strategy is bringing11.1 Verkäufe Photovoltaik-Module (kWp)energetic pace to PV development:11.2 Stromproduktion der PV-Anlagen (GWh/a)(Bundesamt für Energie, Markterhebung 2011, releasd: June 2012)11.2 Stromproduktion der PV-Anlagen (GWh/a)(Bundesamt für Energie, Markterhebung 2011, releasd: June 2012)Markterhebung Sonnenenergie 2011 23Markterhebung Sonnenenergie 2011 23Confidential Tuesday, August 28, 2012! ! 4
  • Table Swissolar with Market information 100MWp New installations in Switzerland in 2011 (estimate) 210MWp Total installed in Switzerland until 2011 (estimate) 530MWp Potential power on the waiting list for the feed in tariff as of March 2012 approx 12‘000MWp Required power to achieve the goal of 20% PV until 2025 >10‘000 total installed PV installations until 2011 12500 Projects on waiting list. (including small installation <10kW)) approx 160GWh Energy supplied by PV installations on 2011 (estimate 2012: 260GWh) approx 490GWh Potential energy list by the projects on the waiting list approx 12‘000GWh Energy supplied in 2025 by the 20% program 0,27% Share of PV in the energy mix. (Gross consumption 2011) 20 % Defined target for PV in the energy mix in 2025Confidential Tuesday, August 28, 2012! ! 5
  • Team A n d re a s Schöni – Igor Smurov - Vice-President President of PSC of PSC Swiss citizen, born December Russian citizen, born June 19, 7, 1968 1970 Graduated from the University Graduated from the Moscow of Applied Science in Bern. State University of International Relations (MGIMO). Simulteneously is the General Manager for EEAG. Started his carrier in PriceWaterhouse afterwards Mr. Was employed at Swiss Solar Systems AG as Sales Smurov was with M&A division of Commerzbank AG. Director PV Equipment and was responsible for Later as CFO and CIO of a Russian major financial worldwide market management with respect to turn- group he fundraised for and managed several large key photovoltaic module production facilities and scale investment and M&A projects in the high-end components thereof. telecommunication, financial and semiconductor Prior to this position Mr. Schöni was working for the industries (among them the building from “the company Saint-Gobain for the Gla ss market scratch” the first Russian national CDMA operator development Asia, as well as for the company “Sky Link”). Schneider Electric to implement new energy In the course of his career Mr. Smurov has successfully distribution systems in Switzerland. arranged, launched and conducted a number of Member of the board of directors of IPVEA investment projects within the telecommunication, (International PV Equipment Association). banking / leasing and semiconductor industry, having raised about USD 2 billion Andrey Golitsyn – Head of Ar tashes Ambar yan – PSC Representation office Director, representative in Moscow of PSC in Prague Russian citizen, born January Russian citizen, born June 3, 30, 1964 1979 Graduate of Moscow State Graduate of Moscow State University. University From 1986 was managing several successful projects Started his carrier in banking and MICEX, later - with GAZPROM, Ministry of Geology and some big Head of  Treasury the first national CDMA operator international companies. “Sky Link” and Head Treasury in a number bank and From 1994 to 1995 was working on the grants of companies. Afterwards has arranged and launched a French Government in University of Bourgogne and in number of investment projects in PV construction at London University in UK, as well as in French the territory of Czech Republic. Institute of Oil. Starting from 1997 as top-manager was incorporated in projects of big international financial and insurance companies in Russia. At the beginning it was Fortis Bank Moscow Representative Office, then Head of  Asset management department of Investment Bank Trust, after was working in Life Insurance fo more than 10 years at «AIG Life», Renaissance Life and Fortis Life Insurance.   Before PSC was Managing Director of Moscow branch of International Group IKB Leasing.PSC Advisory Board members’ CVs are available at http://www.pscapital.ch/en/about-us-en/advisors.Confidential Tuesday, August 28, 2012! ! 6
  • Team Experience:PSC and EEAG currently retains the group of specialists (see the Chart next page) to contractfor design and engineering of PV roof-top installations in Switzerland (see the reference listpresentation - as of July, 2012 - attached). Since January 2012 3 PV roof-top installation projectswere completed and sold. 4 projects are at completion and over 10 projects are at developmentstage. EEAG controls quality and construction specifications, provides design procurement forEPCs who a contract is rewarded to. Current EEAG pipeline exceeds 6 MW and will bemultiplied in conjunction with funds available with GEIF.To expand the construction PSC&EEAG are ready to retain EPC contractors (includingcurrently we are partnering with but not limited to Buhler électricté SA,Solar CenterMuntwyler AG, M+W group) thus reducing capital costs and obtaining the most lucrativeobjects: warehouses, logistic terminals and airport hangars.Our projects are based on most reliable and efficient equipment and materials of EU origin -Solar panels (ASOLAR, LUXOR), inverters and PVBOX (Schneider Electric), MountingSystems (K2-Systems), batteries and etc. Our working procedure for projects in Switzerlandforsees to work as close as possible with local available staff and enterpreneurs. This is to makesure we receive first hand information on new projects introduced at the market and bestcommercial conditions.Our technical team has extensive trackrecord exceeding the standard of 360 of training.PV systems we launched in operation in Switzerland and Italy demonstrate stable highefficiency and provide for high investment yields. PV systems we designed exceed standardstatistical efficiency parameters min 5%. All our projects are running through a pre-designphase where we precisly calculate shadow losses and optimized installation engineering inorder to get best kWh/m2 ratio.During 2010-11 PSC group members were involved in construction of solar parks in CzechRepublic, Slovakia and Italy thus receiving valuable experience in equipment supplies,construction and legal issues for the current business.Well positioned at the market the PSC and EEAG evaluate their potential to achieve themarket share in Swiss PV downstream of up to 5-7% throughout the period of 5-6 years.Confidential Tuesday, August 28, 2012! ! 7
  • Company Organisation Andreas Schöni GM S. Schudel C. Yuille * Assistant Finance & HR A. Schöni J. Franke T. Caldara H. Lehmann & M. Faricelli * Project Manager projects > BED Project Manager projects < Architect and Site Managers 100kW 100kW Quality Management statics Sales Sales Technology Building concepts Process Management Partner companies Bühler Electricité SA Balz Engineering AG Industrial PV Partner Industrial PV Partner Electrical installation Roof mounting GM Jean-Marc Rogivue GM Daniel Balz Staff 70 Staff 55Wednesday, August 1, 12 Confidential Tuesday, August 28, 2012! ! 8
  • Business Model• A SPV company (Swiss resident) is to be established for a number of selected PV projects to operate, each SPV is 100% owned by GEIF (asset managed by PSC).• SPV would rent roofs to install and operate PV systems thus being a power generating company.• SPV initiates projects subject to be pre-selected and designed by EEAG and will purchase each "turnkey" installation from an EPC (see the attached picture) which received the EPC contract as a result of a tender arranged and conducted by EEAG in accordance with EEAG design and mandate to control construction.• SPV uses debt leverage of 75% (pre-arranged with UBS) to cover capital cost with regard to PV installation turn-key construction.• SPV will receive income submitting power to the local grid in accordance PPA for the first 24 months followed by 25-year Swiss government plan and adopted FIT.• SPV pays dividends to GEIF.• PSC and EEAG jointly manage SPV (financially and technically respectively).Ownership and Operational Structure Ownership Structure Investor GEIF certificates Asset management GEIF (LI) PSC (CH)100% ownership EEAG (CH) SPV management SPV (CH)Confidential Tuesday, August 28, 2012! ! 9
  • Operational Structure Investor 2. Return of investment + 1. investment profit 9. Asset GEIF (LI) management fee PSC (CH) 4. Dividends 3. Equity 10. SPV Funding management 5. Mandate to control construction and monitor the EEAG (CH) performance of PV SPV (CH) Bank (CH) installation 8. Debt Funding Quality controls 7. Payment for 6. PV installation & procurement PV Installation Buhler SYSTM Solar Center Enterprises M&W Group CALDARA AG Muntwyler AG Monthey AG 1. Investor purchases GEIF certificates.Tuesday, July 31, 12 2. Both investment profit and returns are not taxed "at source" for the Investor with GEIF due to Liechtenstein jurisdiction. 3. GEIF has 100% ownership interest in SPV - power generation company. 4. The basic mechanism of investment returns and profits from SPV to GEIF is dividends. The dividends paid by the SPV are subject to Swiss WHT at the rate of 35%. Tax optimization ways: • In accordance with the Law acting since January 1, 2011, any profit obtained from the sale of stock in case such stock share representing not less then 10% of the capital and provided the duration of ownership is not less then 1 year, such profit is eligible for the participation deduction and therefore more or less tax exempt. The participation deduction is granted to SPV formed as e.g. Ltd. (Aktiengesellschaft / AG). • Once GEIF is the unlimited structured fund, with reinvestment and flexible lock up period, SPV itself may purchase GEIF certificates, thus providing for GEIF liquidity, fund capitalization and exit for the fund investors (available after 24 months after first issue in accordance with recent NAV). A special daughter company of SPV may get necessary to arrange for the mechanism to work. In accordance with preliminary discussions with Swiss FTA such mechanism has no legal restrictions to apply. 5. EEAG pre-selects PV projects, makes project design and in accordance with the mandate Confidential Tuesday, August 28, 2012! ! 10
  • from SPV arranges competitive tender among EPC contractors, makes quality constructioncontrol and procurement, monitors PV system performance, manages in-house maintenanceand technical PV installation management.6-7. SPV rents roofs and EPC builds PV installation as the turnkey arrangement. Theapplicable VAT is 8%. SPV may be established in the canton of Zug where the profit tax is9,8%. It is pointed out that the effective place of business is the basis for any taxation inSwitzerland. VAT paid by SPV for PV installations is returned as added up to FIT.8. Bank (pre-arranged with UBS) provides debt funding to SPV with leverage of 75% of thecapital required to build a PV installation.9. PSC receives asset management fees from GEIF.10. SPV is managed by PSC and EEAG as per management delegation contracts.Confidential Tuesday, August 28, 2012! ! 11
  • Projected Financial ResultsTo forecast financial results of each project we are commited to we use financial model withexibit for 100kW roof-top installation. We based our “fixed” assumptions on actual projectscompleted, available official statistics and Swiss PV market regulation data. Project size, levelof solar radiation for a specific place, possible capital cost implications, PPA tarifs for the first24 months and applicable FIT (respectively to project size and commissioning time) are“variable” assumptions.We are making our projections for 20 years instead of 25 years, which stands for the FITcontract duration with KEV, as we intend selling the PV generation facilities after 15-20 yearsas fully depreciated and generating net cash flow to Swiss utility companies (such as “Youtility”,Zurich Solar Stromburse).The assumptions are:1. Adopted FIT program according to KEV - managed by Federal Council of Energy (see the following table):Feed-in Tariffs according KEV - Switzerland, VAT 8% included Tariff from Tariff from Tariff from Tariff from Tariff from assumed costs of assumedType of installation Size on installation 1.1.2010 1.1.2011 1.3.2012 1.10.2012* 1.1.2013* installation mainenance costs Rp./kWh Rp./kWh Rp./kWh Rp./kWh Rp./kWh CHF/kWh Rp./kWhFree standing <= 10kW 53.3 42.7 36.5 33.1 30.4 3632 6.0 <= 30kW 44.3 39.3 33.7 27.0 24.8 3089 6.0 <= 100kW 41.8 34.3 32.0 24.8 22.8 2687 6.0 <= 1000kW 40.2 30.5 29.0 23.1 21.3 2464 5.0 > 1000kW 28.9 28.1 21.6 19.9 2372 4.5Building added <= 10kW 61.5 48.3 39.9 36.1 33.2 4036 6.0 <= 30kW 53.3 46.7 36.8 29.4 27.0 3432 6.0 <= 100kW 50.8 42.2 34.9 26.9 24.7 2986 6.0 <= 1000kW 49.2 37.8 31.7 25.1 23.1 2738 5.0 not applicable 36.1 30.7 23.5 21.6 2635 4.5Building integrated <= 10kW 73.8 59.2 48.8 42.8 39.4 4929 6.0 <= 30kW 60.7 54.2 43.9 36.5 33.6 4363 6.0 <= 100kW 54.9 45.9 39.1 33.2 30.5 3854 6.0 <= 1000kW 50.8 41.5 34.9 31.5 29.0 3592 5.0 not applicable 39.1 33.4 28.9 26.6 3395 4.5*) awaiting the decision of the federal counsilin red: not applicableExplanationsCombining the tariff.Installation = 130kW: Use tariff for <=100kW for the first 100kW plus <=1000kW for the next 30kWMaintenance costs: costs for maintenance of installation where no maintenance and warranty extension contract is in place.Awaiting the decision of the federal counsil: The federal counsil has decided to reduce the tariff, but did not decide the values. The mentionned values are the lowest proposed by the federal working group to the to the federal counsil.Information update: July 2012Feed in tariff calculator: https://www.guarantee-of-origin.ch/swissforms/TarifPho.aspx?Language=DE2. Capital cost is calculated based on actual cost of equipment and materials we had with our recent completed projects. CAPEX distribution is as follows:Confidential Tuesday, August 28, 2012! ! 12
  • O& M 0.01 1000 -1 -1 -1 -1 -1other (security, …..) 0 0 0 0 0 000 CHFRevenue 24 24 39 39 39OPEX (Maintenance, Operation, etc.) -2 -2 -2 -2 -2EBITDA 22 22 37 37 36D&A -15 -15 -15 -15 -15Tax 10 % -1 -1 -2 -2 -2Free Cash Flow -232 21 21 35 35 34 6%Interest 5% -9 -8 -8 -8 -8Repayment -5 -6 -6 -6 -6 19% 42% PV moduleFlow to Equity Inverter -58 7 7 21 21 20 Mounting systemNPV CHF 122.45 CABLINGPayBack Period2% 5 years 2 month INSTALLATION 17% Services & ExternalProject IRR 9% (based on a 20 years term) 11.7 % SpecialEquity IRR (based on a 20 years term) 25.7 %3. Roof IRR - we based it on average years term)FIT inflow outcome which stands for ca.2CHF Project rent (based on a 5 3% of the -12.8 % per sq.meter per annum. The above 3% level is the regular stipulated clause in long-term (25 Equity IRR (based on a 5 years term) 7.9 % years) roof lease contract (the sample is attached).Project IRR (based on a 10 years term) 5.5 %4. Output - kWh per sq.meter per annum - average solar radiation level was taken fromEquity IRR (based on a 10 years term) 22.6 % SolarGIS - regular European database.Project IRR (based on a 15 years term) 10.1 %5. Module degradation level - in accordance with our suppliers - Solar module producers. Equity IRR (based on a 15 years term) 25.2 %6. Equity value - 25% as pre-arranged and actual with UBS.7. O&M - 1% of PV installation capacity, assumption based on experience and regular Payback period benchmark cost. 5.131Months 628. Tax - 10% according to actuals for Bern and Zug based fiscal practice. 0.000 0.000 0.000 0.000 0.000 5.131 0Financial resulted table for presentation purposes with investment parameters is below: Exhibit Swiss PV roof-top project -100 KWh 000 CHF 0 1 2 3 20 t0-t20Revenue 24 24 39 35 712OPEX -2 -2 -2 -2 -46EBITDA 22 22 37 33 667D&A -15 -15 -15 -230Tax -1 -1 -2 -3 -7Free Cash Flow -232 21 21 35 29 391Flow to Equity -58 7 7 21 15 286 5 years 10 years 15 years 20 yearsProject IRR -12.8 % 5.5 % 10.1 % 11.7 %Equity IRR 7.9 % 22.6 % 25.2 % 25.7 %NPV CHF 122.45PayBack Period 5 years 2 monthAccumulated projected equity IRR for SPV/GEIF is over 20% at 10+year horizon with nettingopportunity for investment in GEIF exceeding 15%.( for details and calculation formulas see the model attached).Confidential Tuesday, August 28, 2012! ! 13
  • RisksBelow we estimated risks associated with PV generation in Switzerland and respectiveinvestemnts in GEIF.The “first glance” concern a potential investor may have is comparatively small size (ca. 500kWh in most of cases for upper segment roof-tops) of projects vs regular large solar park (from2MW and further) which used to be the practice in most of EU countries. Indeed a big solarpark is easier to operate and reach investment return targets however once such park is out oforder due to climatic, equipment malfunction or human factor investment yields arequestionable and in most cases would generate loss. To compare the risk assume 10MW solarpark vs 100 projects of 100 kWt each. Once 10MW project is out of order it is 100% risk and3. BERECHNUNG VONin case 1 or 2 even 10 smaller projects out of 100 stop generating power (subject to be sold to STROMGESTEHUNGSKOSTENeither PPA or FIT), the maximum risk is 10% or less.Operational risk in such case is to be covered by establishing SPVs for each district or regionin Switzerland where EEAG would perform optimal construction quality controls and laterPSC and EEAG financial and technical management respectively.FITIt is very unlikely the Swiss government may reject or amend alternative energy subsidies.There are a number of factors against such risks and the major are: necessity ofVorgehendecentralization of power grid, CO2 ecological problems and Swiss population supportedcentral government decision to get rid of nuclear power generation.Die Berechnung von durchschnittlichen Stromgestehungskos- Deshalb gilt für die Formel der jährlichen Gesamtkosten in derten für Neuanlagen erfolgt auf Basis der Kapitalwertmethode, Berechnung der Stromgestehungskosten FIT decrease risk. Very unlikely within next 3-4 years. Due to the existing 24 months lock upbei der die Aufwendung für Investition und die Zahlungsströ- period for FIT payments, Swiss goverment regulates the pace of PV development and avoidsme von Einnahmen und Ausgaben während der Laufzeit der booming scenario, otherwise it has increased annual subsidy value. In addition, the grid parityAnlage durch Diskontierung auf einen gemeinsamen Bezugs- Jährliche Gesamtkosten A = is almost achieved as the price for energy in Switzerland currently is t quite high and PVzeitpunkt berechnet werden. Dazu werden die Barwerte aller generation equiment cost is dropping dramatically.Ausgaben durch die Barwerte der Stromerzeugung geteilt. Die Fixe Betriebskosten A further way to analyze the potential of an energy source is to calculate the levelized cost ofjährlichen Gesamtausgaben über die komplette Betriebslauf- + Variable Betriebskosten Energy (LCOE). The cost of electricity (typically cents/kWh) generated by differentzeit setzen sich aus den Investitionsausgaben und den über die (+ Restwert/Entsorgung der Anlage) sources is a calculation of the cost of generating electricity at the point ofLaufzeit anfallenden Betriebskosten zusammen. connection to a load or electricity grid. It includes the initial capital, discount rate, as well as the costs of continuous operation, fuel, and maintenance. This type ofFür die Berechnung von Stromgestehungskosten (LevelizedCost of Electricity assists policy makers, researchers andDiskontierung aller Ausgaben und der erzeugten calculation – LCOE) für Neuanlagen im jeweiligen Jahr Durch die others to guide discussions and decision making.der Installation der Anlage gilt (Konstantin 2009): Strommenge über die Nutzungsdauer auf den gleichen Be- For GEIF‘s consideration we use the suggestions from Fraunhofer Institute. der Stromgestehungskos- zugspunkt wird die Vergleichbarkeit n At ten gewährleistet. I0   (1  i ) t t 1 LCOE  Bei PV-Anlagen wurde ein Austausch des Wechselrichters für n M  (1  el) t t 1 i Kleinanlagen nach der Hälfte der Nutzungszeit, bei PV-Groß- anlagen sind ein Wechselrichteraustausch bzw. Wartungsver- träge in den O&M-Kosten berücksichtigt. Restwert und KostenIo = Investment cost in Currency LCOE Stromgestehungskosten in Euro/kWh für den Rückbau bzw. Abriss der Anlage werden als sich aus-At = annual costs in the specific year in Currency I0 Investitionsausgaben in Euro gleichende Maßnahmen betrachtet und deswegen in dieserMel Jährliche production in the specific years At = Energy Gesamtkosten in Euro im Jahr t Berechnung vernachlässigt (hier Annahme bei PV: Restwert ist Mel Produzierte Strommenge im jeweiligen Jahr in kWh 10% der Investition). i realer kalkulatorischer Zinssatz in %Confidential Tuesday, August 28, 2012! ! 14 n wirtschaftliche Nutzungsdauer in Jahren Die Stromgestehungskosten stellen eine Vergleichsrechnung t Jahr der Nutzungsperiode (1, 2, ...n) auf Kostenbasis und nicht eine Berechnung der Höhe von Ein- speisetarifen dar. Diese kann nur unter Hinzunahme von wei-
  • i = interest rate (assumed 6%)n = number of years that the system shall workt = year of the period specific yearLCOE in Currency / kWhwith this calculation, different energy prodcution system can easely be compared, as theparameters for all of them will be equal or similar.For a system built in 2012 and lasting for at least 25 to 30 years, the following values have beencalculated. (size 1 MW, roof top) LcoE 25 years LcoE 30 years 0.087 CHF / kWh 0.068 CHF / kWhAccording the ELIX, European Elecricity Index, the prices for energy in Switzerland arebetween 47 - 60 CHF / MWh or, 0,047 to 0,060 CHF / kWh. (Market price June 2012)Area Volume Volume for the Base / peak on a monthly average Euro/MWh (peak excl. s MWh  previous year weekends)  MWh D/ 20237640 17212491  38.81 / 50.35 A FR 5135380 4585681  40.342 / 54.174 CH 1685028 913536   39.31 / 52.06  ELIX - European Electricity Index    36.79 / 49.64These prices are for general electricity, wherease renewable energy is sold on a spot level of 0,1CHF/ kWh or more. During the strong winter time in 2011/2012, the price for electricity wentup to to more than 0,20 CHF/kWh. This, due to the high consumption from France, whereasSwitzerland exported the energy.According to analysts energy prices will raise and therefore PV energy will gain in relevance inthe energy mix as it becomes competitive on the market.For GEIF it would mean that it could become a strategy to sell the energy if the FIT would beobsolete or not in favor of the fund. The energy trading is possible today already and it couldbe a possibility to optimise the lock-off period in the FIT.PPAIn case of very unlikely event PPA (power purchase agreements with local municipalities)either for the lock up period of 24 months or as an alternative to FIT program may refusepurchasing power from a roof-top PV installation a legal claim is filed with ELCOM (ElectricCommission of Swiss Government). As any such precedent is unknown we expect thatELCOM would help resolving the issue in favor of PV generation company.CurrencyCHF is currently one of the most reliable currencies in the world. Swiss economy despiteinternational recession demonstrates impressive results - regardless of strong currency SwissConfidential Tuesday, August 28, 2012! ! 15
  • economy is in good shape: export is growing, unemployment ratio is at the minimum level.Swiss financial ratio is AAA and is stable.EPC RiskPhysical damage insurance:The Swiss Association for Engineers and Architects (SIA) has defined a minimum level ofinsurance for the work as an EPC contractor. Any company which is taking a project in termsof EPC, must declare the existence of the specific insurance.Such insurance is called professional liability insurance and covers all risk during a project.EPC companies are usually insured up to 5mln. CHF per incident and can adopt this level tothe size of project.Usually the companies are insured by SUVA see also: http://www.suva.ch/english/Performance Bond a!er insta"ationIn case when an Investor requires a performance guarantee, he is expected to ask for:- A bank guarantee from the EPC‘s bank. Usually, this stands for a short term committment over the standard warranty period. (1 year for usual equipment). For PV applications these terms are not practical.- A performance bond guarantee from an Insurance. Usually it is within the level of 10% (according to requirements of SIA). Such insurance can then be made for a longer term. In most cases, the EPC asks for maintenance contract during the term of insurance in order to keep an eye on the installation performance. The cost of such insurance solution are ca. 0,75% of the installation cost.Technical Risk of running PV stationsEquipment risks:In General, the supplier has to introduce devices peformance guarantee in accordance withintended application. But he would hardly assume responsibility for any breakdowns. For theinstallations of GEIF we will request warranty of a first class European insurance company. (forinstance “SwissRe”):• Modules • Product liability: 10 years • Performance guarantee: 25 years for 80% of the power. • Liability Insurance to be covered by the supplier • Performance guarantee insurance upon request and negotiations• Inverters & AC devices • Standard warranty: 5 years • Extensions up to 20 years with maintenance contracts possible• Installation systems • Standard warranty: 12 years • No additional insurance needed as this part is not critical.PV performance / power production failure- Physical damage insuranceConfidential Tuesday, August 28, 2012! ! 16
  • - Any damage to the installation due to unforessen events except for the below stated, can be covered by such insrance. The loss of revenue during the repair period can be and usually included in the insurance contract.- Damages from Hail, Thunderstorm, Rain, Fire and Snow - Such natural hazard events are covered by public building insurance as requested by Swiss Law. The insurance pays the repairing costs but not a PV system breakdown. - PV System breakdown is to be covered by the Physical damage insurance.The above insurance information is based on discussions and information received from“Mobiliar” Insurance company, based in Switzerland.Preventive actions:In order to reduce insurance costs and revenue losses, EEAG has developed a monitoringsystem for all switched on PV installations. With such monitoring system we can fix triggerpoints in order to control the performance and implemnt preventive maintenance prior criticalPV system breakdown. (the system is based on Solarlog‘s networks).EXIT STRATEGYPSC as GEIF Asset Manager assumes operate PV generation projects (via opeartional SPV) forthe term of 15-20 years. However, due to unlimited nature of GEIF and adopted Prospectus weare to redeem issued GEIF certificates to investors 24 months from the date they purchasedcertificates in accordance with the NAV valuation as of the last date, upon prior notification.Due to the 24 months lock up period for FIT such exit application is possible but not likely asreturns are minor. However, we are to provide for necessary liquidity in case such redeem claimis issued to GEIF/PSC. For such purpose and in accordance with requests of LiechtensteinFMA GEIF’s Custodian Bank - Valartis Bank (Liechtenstein) is to provide a respective loanfacility to GEIF once required. This approach is valid thoughout all life of GEIF.As stated above (p.10) each SPV established by GEIF/PSC may itself purchase GEIFcertificates, thus providing for GEIF liquidity, fund capitalization and exit for the fundinvestors (available after 24 months after first issue in accordance with recent NAV).In accordance with financial results and due to 24 months lock up period for FIT (see theprevious section) substantial returns are to be generated after 5th year of operations. Startingsuch point a investor may request redeem of GEIF certificates - a portion of those each year -thus receiving a sort of annual “interest” payments.Final exit liquidity provision scenario is based on assumption that GEIF/PSC will sell PVgenerating assets after 15-20 years of operation to Swiss utility companies (such as “Youtility”,Zurich Solar Stromburse). The assets will be fully depreciated and may be sold for remainderdiscounted cash flow minus purchase premiums which traditionally do not exceed 5%.Confidential Tuesday, August 28, 2012! ! 17
  • PV complimentary solution As complimentary to PV generating facilities GEIF is targeted to invest in setting up Electric Vehicle (EV) Charging Stations (EVCS) as additional channel of power sales, complementary and exceeding acting grid hook up Feed-in-Tariffs adopted by Swiss authorities. PSC as the GEIF asset manager has got arrangements with local municipalities in Switzerland to install EVCSwith both public places and selected households/big residential/malls and warehouses/airportterminals with PSC made PV rooftop systems are deployed. EVCSs will be power supplied bythe PV rooftop installations in parallel with regular grid hook up. Rationals The market of EV cars is developing quite fast - major world industry players have declared their programs to launch EV mass production 2013 thus trigging avalanche infrastructure development. Current market of EVs in Europe exceeds hundred thousand and rapidly grows thus evidently approaching the booming stage within next 2-4 years. PSC enjoys good working relationship with one of the major EVCS producers in Europe to project, turn-key install and service the EVCS. EVCS are of different models starting from private mobile charger to high-speed EVCS with multimedia and various payment system support. Simple calculation shows that several cars charged daily may consume all PV generated power thus times multiplying profit for an average PV rooftop installation of 100 kW (capital expenses for in-build or regular charging stations set up stands for 5-7% additional to average 100kW turn-key installation cost). Acting EV charge-in tariffs introduce lucrative alternative/ add up to PV FITs adopted at the target market providing even better investment returns: Types of EV Consumers Parameters Cost of single charging (CHF) Power (kW) Power currency Battery (A) capacity (kWh)Biles and Scooters from 2 from 8 0,1-2,0 0,02-0,4Motorbikes from 3 from13 1-5 0,2-13&4 wheel Electrocars 2-22 8-32 5-25 1-5 Capital cost for in-built and parking (medium and fast) EVCS is as follows: Regular CEE plug- Home Charge Regular public Fast Charging in device charging station stationAverage time for >4h >4h 30min-4h ca.30min.chargingConfidential Tuesday, August 28, 2012! ! 18
  • Regular CEE plug- Home Charge Regular public Fast Charging in device charging station stationCharging quality Regular Regular Regular FastImportant notice Regular charging Regular charging Regular charging dependable upon charging furniture and slot typesCapital 100-600 500-3000 1500-15000 30000-80000Investment (CHFca, includingadjacent facilities)Price for power 0,5-3 0,5-3 0,5-3 4-10per singlecharging,CHFMaintenance p.a. 0 0-50 20-2000 200-2000CHFTariff charging regular consumed regular consumed regular consumed Billing process cost cost costPossible Single households, Single or several Block houses, office separate chargingdeployment shops and offices households, shops centers, parking stations, highway offices places, shopping stations, shopping malls mallsConfidential Tuesday, August 28, 2012! ! 19
  • Advantages of investments in GEIFGEIF constitutes a unique combination of attractive features of unlimited and limeted formsof investment fund organization, namely: • Any investor may have his Fund certificates redeemed by the GEIF asset management 24 months from the date of certificate purchase in accordance with the NAV valuation as of the last date, upon prior notification of the GEIF Asset Manager (vs the limited fund format when returns are available upon the expiration of the fund only–usually 8-10 years). • GEIF has a precise period of time in which it invests in facilities - lock up period – 4 years. After the lock-up period is over GEIF may only maintain liquidity by investing the funds in highly liquid assets. Alternative energy facilities are included in the GEIF investment portfolio on a long-termbasis, thus continuously generating cash flow and increasing capitalization, profitability, andliquidity of investments in the Fund. And in case of necessity or favorable market conditions,some of the GEIF’s energy assets may be sold to utility companies.High yield, virtually non-risk projects in alternative energy, in particular, PV sector, constitutereal assets, which generate power thus continuously growing in value and demand; for qualifiedinvestors real assets investment is the best alternative to highly volatile stock market.Confidential Tuesday, August 28, 2012! ! 20