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Presentation Susan Mc Lean

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ONEIA Breakfast meeting December 10, 2009.
Presentation SUSAN MCLEAN
Regional Director, Partnerships
Tel.416-644-8726 ext. 2
Email s.mclean@sdtc.ca

Published in: Economy & Finance, Business
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Presentation Susan Mc Lean

  1. 1. Susan McLean, Regional Director, Partnerships Presentation to ONEIA: December 10, 2009
  2. 2. SDTC Background • SDTC began operations in November of 2001 • Registered as a not-for-profit, non-share capital corporation • Operates as an arms-length independent organization • Accountable to Parliament through the Minister of Natural Resources • Funding allocation of $1.05B from Government of Canada
  3. 3. SDTC Funds SDTC operates two funds: $550 million SD Tech $500 million NextGen Fund™ was launched Biofuels Fund™ was on April 4, 2002. launched on September 12, 2007. The funds are complementary and address different gaps in the The funds are complementary and address different gaps in the Innovation Chain Innovation Chain
  4. 4. SD Tech Fund™ The purpose of the SD Tech Fund™ is to: • Support the late-stage development and pre-commercial demonstration of clean technology solutions that address: • Climate Change • Clean Air = $350M • Clean Soil = $200M • Clean Water • Encourage the formation of new partnerships that form the basis of sustainable clean tech supply chains • Increase number and rate of uptake of clean technologies into relevant market sectors. 4
  5. 5. Funding Gap – Pre-commercial Market Product Technology Development Entry & Fundamental Applied Commercialization and Demonstration Market Research Research & Market (Pilot to Full Scale) Volume Development Funding Intensity Pre- Pre- IPO Governments Pre- Pre- Gap Commercial Banks Gap Venture Capital Industry Industry Angel Investors Public and Private Sector Research 17 55 66 79 Lack of funding for technology development and demonstration Lack of funding for technology development and demonstration creates a Pre-Commercial Gap in the Innovation Chain creates a Pre-Commercial Gap in the Innovation Chain
  6. 6. Funding Gap – Capital Intensive Product Market Technology Development Fundamental Applied Commercialization Entry & and Demonstration Research Research & Market Market (Pilot to Full Scale) Development Volume Funding Intensity Pre- Pre- High CAPEX IPO Governments Pre- Pre- Gap Commercial Gap Banks Gap Industry Industry The absence of angel and venture capital funding leads to a The absence of angel and venture capital funding leads to a second gap we call the High CAPEX Gap. second gap we call the High CAPEX Gap.
  7. 7. SDTC Addresses Funding Gaps Product Market Technology Development Commercialization Entry & Fundamental Applied and Demonstration & Market Market Research Research (Pilot to Full Scale) Development Volume SD Tech NextGen Biofuels Governments Banks Industry Industry The NextGen Biofuels Fund and the SD Tech Fund are positioned The NextGen Biofuels Fund and the SD Tech Fund are positioned to complement each other to complement each other
  8. 8. SDTC Pre-Commercial Validation The SD Tech Fund™ is structured to increase the success rate of pre-commercial, unproven technologies Provides pre-Venture Capital investment into the development and demonstration phases (supports ~ 1/3rd of project costs) Contributions typically range from several hundred thousand to several million Cash contributions are non-repayable and requires no equity Allows a business to allocate existing resources to run their core business Defers or avoids equity dilution financing while building up value Business often becomes venture grade or technology bankable at the end of the project
  9. 9. Project Consortia Structure “Go-To-Market” Consortia should include: ● The managerial, business planning, financial, strategic and technological expertise to carry out the project ● The key players in the value chain for the given technology market ● i.e. Researchers, Technology developers, Key Technology Suppliers, Engineering / Environmental Consultants, Investors, Demonstration host (representative customer) ● Consortium Members should contribute Cash and / or In-kind contributions
  10. 10. SD Tech Fund – Funding Allocation Process • Has two phases for applicants and four decision gates • Phase I – Statement of Interest (SOI) – not too onerous, it is informative and sufficient to assess • Phase II – Proposals by Invitation – equivalent to a business plan • Gate I – SDTC review • Gate II – technical and business experts • Gate III – Investment Committee + Project Review Committee • Gate IV – Board Approval Screening Criteria • Technical, Market, Business and Environment 10
  11. 11. Industry’s Contribution is Impressive Applications to Date (15 Rounds) Total Eligible Project Costs $1.4 B •1,670 applications (>5000 entities) •90% industry-led •$4.1 Billion in funding requests •$16 Billion in total project value Strong Demand SDTC Contribution Leveraged Funding $425 M (30%) $1 B (70%) Rate of SOIs remains strong Number of applications constant over last 4 years (+/-10%) Projects Approved (14 Rounds) Industry Leveraged Other Funding* Funding •171 projects $846 M (84%) $164 M (16%) •$425 Million from SDTC •$1.4 Billion in total eligible project value * Includes funds from federal departments, provincial •33 projects completed governments and academia Numbers as of June 2009 Private industry in Canada is supporting cleantech, providing Private industry in Canada is supporting cleantech, providing 84% of all leveraged funding into SDTC projects. 84% of all leveraged funding into SDTC projects.
  12. 12. SD Tech Portfolio – Sectoral Spread SDTC supported projects contribute technology solutions to SDTC supported projects contribute technology solutions to major economic sectors in Canada. major economic sectors in Canada.
  13. 13. SDTC is Making the Cleantech Market in Canada 600 500 400 300 Millons 200 100 0 2006 2007 2008 Venture Capital SDTC & Partners Source: Thomson Reuters, March 2009 SDTC and its partners invest 1.5x the total private investment in SDTC and its partners invest 1.5x the total private investment in cleantech, driving overall cleantech venture capital funding in Canada. cleantech, driving overall cleantech venture capital funding in Canada.
  14. 14. Follow-on Investors attracted to projects SDTC had invested in Follow-on Investments* $400 $350 $338 $300 $261 $250 $187 $M $200 $150 $107 $100 $50 $8 $0 2005 2006 2007 2008 2009 (as of June, 2009) *Based on publicly disclosed financings to SDTC-funded companies. 31 Projects into which SDTC has invested $86M have raised 31 Projects into which SDTC has invested $86M have raised $902M in follow-on funding in the past four years. $902M in follow-on funding in the past four years.
  15. 15. SDTC - More Than Funding SDTC’s mission is to “act as the primary catalyst in building a sustainable development technology infrastructure in Canada”. Building Young Companies help entrepreneurs sharpen their market savvy, increase their ability to identify the economic and environmental strengths of sustainable development projects, and define their value proposition. Reducing the Risk to Enable Private-Sector Funding de-risk clean technologies in a way that will ultimately attract downstream private- sector investment by stringent due diligence process and strengthening project consortia. Analysis and Market-Focused Policy Advice to Government Through SD Business Case™ reports, work with industry, academia and various levels of government to analyze current needs, determine the proper course that should be taken and to outline the technology and policy instruments needed to get there. Building a cleantech infrastructure in Canada requires in-depth Building a cleantech infrastructure in Canada requires in-depth industry experience, market knowledge, and technical expertise. industry experience, market knowledge, and technical expertise.
  16. 16. For More Information Sustainable Development Technology Canada www.sdtc.ca Ottawa Head Office: Toronto Office: Vancouver Office: World Exchange Plaza First Canadian Place, World Trade Centre 45 O’Connor Street, 100 King Street W., Suite 404 - 999 Canada Suite 1850 Suite 3700 Place Ottawa, Ontario Toronto, Ontario M5X Vancouver, BC K1P 1A4 1C9 V6C 3E2 Tel: (613) 234-6313 Tel: (416) 644-8726 Tel : (604) 844-2857 Susan McLean Regional Director, Partnerships s.mclean@sdtc.ca Direct: (416) 644-8726 x2

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