Os Nse Presentation 2010 10 12


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Os Nse Presentation 2010 10 12

  1. 1. Onestone Solar The Solar Investment Service Provider September 2010
  2. 2. Content 1. Introduction 2. Who we are 3. Market Trends 4. Nordic Solar Energy 5. Company Structure 6. Capital Structure 7. Investment Policy 8. Summary 9. Appendix Mora la Nova-Spain, 1.5MW
  3. 3. 1. Introduction The past few years investment in solar parks have soared, especially due to the favourable conditions offered in Europe and global market trends. Fast growing markets however do have their downsides: The quality-price equation, and therefore the realized financial returns, might not always match the expectations of the investors. Just as in other infrastructural investment opportunities (like real estate) independent professional fund managers are required to ensure the investment portfolio delivers as promised. The coming years an increasing number of operational and new solar photovoltaic (PV) parks will be available against attractive prices/returns. These parks will be developed primarily in the southern and central regions of Europe. Onestone Solar has the human capital and global experience to provide all required operational services in setting up and managing solar PV parks around Europe. Our scope of knowledge covers the complete solar PV value chain: from procuring solar modules in Asia to solar park insurances.
  4. 4. 2. Who we are Onestone Solar Holding B.V. consists of experienced solar PV professionals with an extensive background in the complete solar PV value chain. Onestone Solar is active in the following fields: • Conducting technical and legal due diligences • Developing land and permits for new solar PV parks • Performing turn-key EPC services Onestone Solar has started activities in Europe with offices and/or partnerships in Spain, Bulgaria, France, Germany and the Czech Republic. Other countries of interest are Greece and the UK. The focus of Onestone Solar is being a full service provider to global investors, interested in investing in solar PV parks in Europe. Villares del Saz- Spain, 3MW
  5. 5. 2.1 Management Team Managing director: Marinus Boogert Marinus Boogert (1969) has been active in the solar industry for over 10 years. He has a successful international track record as a marketing & sales executive. His core activities were in distribution and project sales activities around the world. Companies he worked for in the solar industry are: Nuon (project manager), Shell Solar (sales director), and Scheuten Solar (marketing and sales director). Operational director: John Koopman John Koopman (1966) has been an entrepreneur for over 20 years. He has a track record in different branches, but started as a professional technical photographer. He managed on an interim basis several companies from finance until high-tech (semi-conductor). In 2002 he moved with his family to Spain and since 5 years he has been involved in the solar energy industry. He has general international business and consulting experience. Technical director: Josep Padró Josep Padró (1966) has been a director for over 15 years in two leading multinationals (T-systems and Metrolico) focusing on infrastructural projects for the telecommunication industry. He is the founder of CONCOM S.A., 12 years ago, a company specialized in managing and implementing renewable energy projects (wind and solar) on an international level.
  6. 6. 2.2 Shareholders Onestone Solar Holding B.V. currently has five shareholders: • Phocus Holding (NL) Personal holding of Marinus Boogert • FOS B.V. (NL) Holding company of Gosse Boxhoorn, Jan-Willem Hendriks and Hubert Thijs, co-founders of Solland Solar and initiators of The Silicon Mine • Allied Energies (Singapore) Holding company of Simon Tan, a solar industry, expert for over 20 years • Miraqui (Spain) Personal holding of Mr. John Koopman • Concom (Spain) Operating company of Josep Padró
  7. 7. 3. Market Trends The solar PV market has been booming over the last years and is forecasted to confirm this trend in the coming years. Grid- connected solar PV has grown by an average of 60 percent every year for the past decade, increasing 100-fold since 2000. By the end of 2009 the global cumulative capacity exceeded 21 GWp. The European Union contributes to around 75 % of the global cumulative capacity. The PV market deployment is to a large extent dependent on the political framework of any given country. Support mechanisms are defined in national laws. The introduction, modification or fading out of such support schemes can have profound consequences on PV industries. PV Market forecasts therefore depend on a deep understanding of the political framework.
  8. 8. 3.1 PV market 2009 Solar PV generates electricity in over 100 countries and continues to be the fastest growing power-generation technology in the world. An estimated 7 GW of grid-tied capacity was added in 2009, increasing the existing total by 53 percent to about 21 GW. This was the largest volume of solar PV ever added in one year and came despite a precipitous decline in the Spanish market relative to 2008. Solar PV accounted for about 16 percent of all new electric power capacity additions in Europe in 2009. Cumulative global PV installations are now nearly six times what they were by the end of 2004. Analysts expect even higher growth in the next four to five years. Germany again became the primary driver of PV installations 3.8 GW added—about 54 percent of the global market. This was far above Spain’s prior record-breaking addition of 2.4 GW in 2008, and brought Germany’s capacity to 9.8 GW by the end of 2009, amounting to 47 percent of existing global solar PV capacity. While Germany has played a major role in advancing PV and driving down costs, its importance will decline as other countries step up their demand and reduce the industry’s reliance on a single market. Italy came in a distant second after Germany, installing 710 MW and more than doubling its 2008 additions due to high feed-in tariffs and a good national solar resource; such strong growth is expected to continue. Other strong markets in Europe included the Czech Republic, which saw a nine fold increase in total capacity relative to 2008—to 411 MW—thanks to generous feed-in tariffs for solar PV. The country installed more new PV per capita than any other country except Germany. It was followed by Belgium (292 MW), France (185 MW), and China (160 MW). The trend toward large-scale (greater than 200 kilowatt) PV plants continued around the globe, with the number of such plants exceeding 3,200 in 2009, up from roughly 2,450 the previous year. These facilities totaled some 5.8 GW of capacity, more than five times the 2007 capacity, and accounted for more than a quarter of existing global PV capacity by year-end.
  9. 9. 3.2 PV market scenario until 2015 The European photovoltaic PV market, buoyant in 2009, is heading for a similar outcome this year. However, some turbulence lies ahead as European governments get to grips with rapidly escalating program costs. As a consequence, the pathway to downstream corporate profitability in this region will become significantly more challenging. Faster annual feed-in tariff decline in Germany and revised incentive terms in several countries will be partially offset by fast growing "start-up" European markets and significant adjustments in factory gate module prices and system installed price movements, all of which will form part of the new downstream commercial equation. Therefore investment returns will remain good during the coming years. By the end of 2012 a global cumulative capacity of >50 GWp could be achieved. This is equivalent to the power capacity of 50 nuclear reactors. Under the Policy Driven Scenario of EPIA (European Photovoltaic Industry Association), PV is clearly on the way to becoming a major global energy source. Germany is expected to remain the market leader and even increase its market size considerably over the next years. The biggest growth is foreseen for the Rest of Europe particularly in countries such as Czech Republic, UK, Bulgaria, Italy, France and Greece.
  10. 10. 4. Nordic Solar Energy A/S A European Solar PV Investment Company In order to satisfy the needs of investors with a budget of EUR 50k+, Onestone Solar Holding B.V. (OSH) has incorporated Nordic Solar Energy A/S (NSE). NSE offers services to investors in acquiring and managing solar PV park investments. Onestone Solar will source and develop the solar PV parks for NSE. Nordic Solar Energy A/S (NSE) will acquire operational and newly developed solar PV parks around Europe. NSE expects to raise EUR 10 million in equity in the next two years; pending the gearing, the total investment capacity of the fund will be between EUR 30–40 million. This is equivalent to 10 – 15MWp in projects. The solar PV parks will vary between 1– 5MWp in size (the Assets). Almanse-Spain, 3MW
  11. 11. 4.1 Mission, vision and strategy Mission Nordic Solar Energy will create access to attractive investments within solar energy production for small to medium sized private investors. Vision In the course of a few years, Nordic Solar Energy will establish itself as a listed, diversified solar energy company with production facilities in a number of countries in the EU. Strategy The vision shall be achieved with the successive implementation of a number of capital increases and investments in solar energy facilities. With the basis in the project pipeline the goal is, as a minimum, the establishment of 10 MWp solar energy facilities in 2011, beginning with the initiation of 1MWp in 2010, 2-3 MWp in the first half-year of 2011 and 8 MWp in the second half-year. At the same time, the company’s project pipeline will be maintained so there will be about 5-10 MWp of projects constantly in the pipeline. There is an invariable requirement that from the outset, it is clearly demonstrated that the budgeted goals are fulfilled so the investors’ rate of return is taken care of. This will create the basis for the ongoing capital increases and be a prerequisite in order to achieve the goal regarding size and liquidity.
  12. 12. 4.2 The concept Nordic Solar Energy’s mission is fundamentally build on the desire to create easier access to investments in solar energy facilities. NSE wants to create a liquid, diversified portfolio of attractive solar energy investments in one joint solar energy company, which in time will be assessed and valued at the level of a high-interest bond. The key words in the concept are: a) Attractive return b) Attractive risk profile c) Access to a strong team d) Liquidity and exit option Zerre - Germany, 1MW
  13. 13. 4.2 The concept Re a) Attractive return NSE invests in solar energy facilities with a return that significantly exceeds the return on long-term bonds. Currently, a realistic goal is a return of about 10-15% p.a. on a portfolio of solar energy facilities, but in the future this return can vary depending on the development in the market for solar energy. The essential aspect is that the return, at any time, is proportionate to the risk that exists in the investment. The objective of the Company is to establish a portfolio of solar energy facilities that provide investors with an attractive return with a relatively low risk. The return objective (project IRR on equity after tax) is >10% p.a. for operational parks and >15% p.a. for newly developed parks on the complete portfolio in the current market. Part of the return will be in the form of dividend, which in the initial years is expected to be at the level of 6% p.a. The background for the objective of about 10-15% return per year is based on the portfolio of potential investments that are immediately within NSE’s reach. • Please note: final IRR depends amongst others heavily on equity-debt funding and cost of debt. Re b) Attractive risk profile It makes no sense to estimate the size of the return without simultaneously assessing the risk of the investment. The risk has several dimensions when investing in solar energy facilities, but fundamentally, the investments have an attractive risk profile. The investments are characterized by: – State guaranteed prices for the produced kWhrs. – Stable solar radiation, which in individual years rarely fluctuates by more than +/- 3-5% in relation to the historical average – A stable electricity production via a simple, thoroughly tested technology and facility without moving parts, and – Predictable costs for operation and maintenance NSE’s aim is to make the investment as transparent as possible. This is being achieved by standardising all required contracts to the maximum extent possible. As a result, the investments can be characterised as low operational risk with a stable long term cash flow. One of the strengths of NSE is the diversification way of thinking. NSE spreads its investments over a number of different solar energy facilities in different stages of development in various EU countries.
  14. 14. 4.2 The concept Re c) Access to a strong team NSE provides the investors access to a strong team of competences. On the one hand, the management, Nikolaj Hoff and Erik Hougs, have competences within long-term investment, establishment and operation of investment companies as well as access to raising capital. On the other hand, the co-founders/shareholders of Onestone Solar Holding B.V. (OSH), have industry insight and networks within the solar energy industry. Both parts are crucial to be able to carry out successful investments in solar energy facilities. All shareholders of OSH have long international careers in the solar energy industry and through the company, Onestone Solar Projects B.V., they have access to a pipeline of projects in the EU. Re d) Liquidity and exit plan The investment period of the assets is variable: 3-25 years, pending local subsidy rules & regulations and investment horizon of the investors. Nordic Solar Energy’s objective is to create liquidity in the companies shares. This may be through an IPO on the OMX NASDAQ stock exchange, but alternative exit possibilities for investors are: – Sale of shares to other investors – Sale of complete Company to other investors – Sale and/or dismantling (part of ) the assets Nilolaj Hoff, Erik Hougs, Marinus Boogert in front of Zerre V, Germany
  15. 15. 4.3 The organization NSE is managed by a board of directors of 3-7 persons and daily operations (investments and capital raise) is managed through a management contract between NSE and a management company NSE Management. The purpose of the management contract is to secure, that NSE does not participate in start-up costs and has a simple and transparent cost structure, without fixed costs. The administration and operation of each facility is outsourced to external parties in each country. When the investment portfolio reaches a size, where an IPO is desired, the minimum organization to achieve this will be put in place. The board of directors may alternatively decide to negotiate a management contract including this service. The Board of Directors NSE’s board of directors supervise that investments conducted bys NSE Management on behalf of NSE are in accordance with the investment policy of NSE and thereby the board of directors approves all investments. At NSE’s ordinary general meeting the board of directors will be elected and must comprise 3-7 persons who are elected for one year at a time. Initially the board of directors comprise of: Marinus Boogert, the Netherlands (chairman) Per Blinkenberg-Thrane, Denmark Iben Mai Winsløw, Denmark
  16. 16. 5. Company structure Introduciton Investors will buy a stake in Nordic Solar Energy A/S (NSE), which is a Danish private limited company and thus subject to Danish tax legislation. NSE invests in solar energy facilities through wholly or partially owned companies. Investment in a solar energy facility takes place with the establishment or acquisition of a company in a given country. In so doing, a portfolio of shares in companies in a number of EU countries is built up with each company containing a solar energy facility. Company structure The company is organized in a group structure where NSE owns shares in the companies containing the solar energy facilities in the relevant European countries. Each solar energy facility is thus its own company with a local administration agreement, which ensures the necessary reporting and local operation and maintenance agreements as well as the monitoring and operation of the solar energy facility. The establishment of the facility itself takes place based on a total EPC contract, which contains engineering calculations, component procurement and contractor work.
  17. 17. 6. Capital structure In order to achieve the best possible return for the shareholders in NSE, the highest possible degree of financing of the individual projects is pursued. The bank financing of each facility will be negotiated as part of the investment agreement that is made and the liability for the debt financing will be in the local subsidiary with security in the solar energy facility. Thus, NSE’s shareholders will not be liable for debt registered in the portfolio companies. Likewise, the local companies are not liable for each other. The degree of financing is typically between 70 and 80 percent. The lowest degree of financing is obtained in the less developed central and eastern European countries, while a higher degree is obtained in, e.g. Germany and France. Nordic Solar Energy A/S SPV1 SPV2 SPV3 Investors NSE Management A/S • Portfolio management • Due diligence • Administration
  18. 18. 7. Investment policy All Nordic Solar Energy’s investments in and possible divestments of solar energy facilities must be decided by majority vote of the board of directors. The framework for decisions concerning investments is laid down in NSE’s investment policy. The investment policy may be adjusted on an ongoing basis by the board of directors of NSE reflecting the shareholders’ interests and market evolution. NSE invests in solar energy facilities within the framework of the European Union. The solar energy facilities must be located in local companies, and investments may be made either by establishing companies which take over all the rights, obligations and contracts for the solar energy facility or through investment in an already established company. NSE’s investments are characterized by: – The purchase of partially or fully developed solar energy projects which through injections of equity can be constructed and commissioned, and where a legal and technical due diligence can be performed. – The purchase of operating solar energy facilities of which the performance is guaranteed by a legal and technical due diligence.
  19. 19. 7.1 Return and risk NSE aims at a return of 10-15% p.a. on the overall solar energy portfolio. The point of departure for achieving this return is that individual solar energy facilities should have returns in excess of 10-15% p.a. in order to cover NSE’s investment-related costs. However, return must always be viewed in relation to the risk associated with each investment. For example, investments in German solar energy facilities are usually low risk because of the German government guarantee and the size and maturity of the market. Consequently, investments in German solar energy facilities are less profitable, but nevertheless attractive in some cases by virtue of the low risk. As the solar energy markets mature in each EU country, the return available in the markets is expected to decline. Thus, it cannot be excluded that at some time NSE may have to reduce its 15% p.a. return target. If this return target is reduced, it should preferably reflect that the risk is simultaneously reduced so the overall investment at the time will still be attractive. In NSE, return on investment stems from a combination of dividend payments and capital gains on NSE shares. Dividends are distributed from the subsidiaries and channeled on to NSE’s shareholders. The aim is to maximize the regular dividend payments, in that NSE wishes to see excess liquidity from the underlying companies paid out in dividends.
  20. 20. 8. Summary • Focussed fund, restricted only to: – Operational parks – Newly developed solar PV parks – European Union countries • Operational efficiency through standardisation of contracts • Full technical-, legal-, financial and insurance due diligence • The target capitalisation for 2011 is: – EUR 10 million equity – EUR 30-40 million in Assets • Assets ranging from 1-5MWp • Investment horizon: 3-25 years • Expected IRR on equity after tax: – >10% p.a. for operational parks – >15% p.a. for newly developed parks • Fees: – No start up costs and no fixed management fees – All IRRs are net investor return on investment including transaction fee’s – Standard transaction fee’s to the management company: • 3% on capital raised • 3% on gross acquisition price
  21. 21. 9. Appendix Company Details Onestone Solar Holding B.V. Keizersveld 13 NL 5803 AM Venray The Netherlands Marinus Boogert Managing Director M +31 (0)6 1530 9991 E mboogert@onestonesolar.com I www.onestonesolar.com This confidential Memorandum is furnished on a confidential basis to a limited number of potential investors and advisors for obtaining feedback on the investment proposition. All information contained in this Memorandum is Confidential and the recipient should engage all its efforts to keep the information Confidential. The Memorandum is to be used solely by the person to whom it has been delivered. The information contained herein may not be reproduced, transmitted or used in whole or in part for any other purpose, nor may be disclosed without prior written consent of M. Boogert. Nothing of this Memorandum may be used for any purpose except to evaluate and engage in discussions concerning the Investment Company. Potential investors should not construe the contents of this Memorandum as legal, tax, regulatory, accounting or investment advice and each potential investor is urged to consult its own advisors with respect to the consequences of its potential investment in the Investment Company.