Eei presentation feb 2014v9


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Eei presentation feb 2014v9

  1. 1. Eclipsol Energy Inc. Quesnel Lake Pumped Storage Hydro Projects February 2014
  2. 2. 2 Forward-Looking Information This presentation and the associated slides and discussion contain forward-looking statements regarding Eclipsol Energy Inc. (Eclipsol), our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward-looking statements are based on our management’s assumptions and beliefs in light of information available to them at this time. These forward-looking statements are, by their very nature, subject to significant risks and uncertainties, and actual results, performance or achievements may be materially different from those expressed in the forward-looking statements. Factors that may cause actual results, performance or achievements to differ from expectations include, but are not limited to; ability to access sufficient capital from internal and external sources, regulatory changes, future levels of industry product supply, demand and pricing, customer adoption levels, wars and acts of terrorism, technical risks related to product design, development and production, acts of competitors and other changes to business conditions. Eclipsol undertakes no obligation to revise any such forward-looking statements to reflect any changes in Eclipsol’s expectations with regard thereto or any change in circumstances or events after the date hereof. Confidential Information
  3. 3. 3 Mission Statement Our mission is to develop, build, and responsibly manage a high caliber portfolio of core infrastructure energy projects in Canada and internationally to meet the everincreasing global demand for energy. Eclipsol Energy is committed to providing our customers with quality energy solutions that positively impact our environment and communities while delivering superior returns to investors. Confidential Information
  4. 4. 4 Company Profile  Eclipsol Energy has a number of hydro-electrical pumped storage projects in its project portfolio on Quesnel Lake in British Columbia, totaling more than 1,000 MW of power.  Additional pumped storage projects totaling more than 600 MW are under review as well as a large number of operating projects in the hydro, wind, and solar sectors. Confidential Information
  5. 5. 5 Directors Robert Coelho – CEO and Director  Bringing over a decade of senior business and corporate management experience in the energy sector  Has procured, managed and financed several high profile energy projects in the Canadian and International markets Casper Bych – Executive Chairman of the Board  Bringing over two decades of experience in management; the legal industry practicing securities law at national law firm; and in the investment banking industry as the CEO of Mountainview Capital Corporation, a Vancouver based corporate finance boutique  Obtained law degrees from University of Copenhagen (Cand. Jur.) and McGill University (L.L.B. and B.C.L. with Distinction) David Kiess – Manager of Project Development  Bringing over 35 years of hydroelectric development experience  Served as a Director for IPPBC and also participated in consultations with the BC Liberal Provincial Caucus regarding formulation of the BC Energy Plan Confidential Information
  6. 6. 6 Directors William Anderson – VP Corporate Development and Director  Bringing over a two decades of international business experience in the mining and energy sector with a focus on corporate finance  Holds a law degree (L.L.B.) from Osgoode Law School (York University) and is a member of the Law Society of Upper Canada and was first in class in International and Banking law J. Lewis Dillman – VP Corporate Finance and Director  Seasoned executive with over 15 years of experience in the public and private resource industry  Holds a Masters degree in International Affairs from Columbia University in New York with a specialization in international banking and finance Craig Bond – Executive Vice President & Director  Have over a decade experience in the financial markets sector  During his time in the industry has given speeches and training sessions at various investment seminars. 2/21/2014 Confidential Information
  7. 7. 7 Track Record Experience Select Projects: Extensive experience in financing and building large infrastructure assets  Comprehensive knowledge of working with BC Hydro and Provincial Ministries in permitting projects Big Hanaford (Centralia, Washington) Combinecycle power plant: $200 Million; 160 MW Peace Canyon Hydro Electrical Power Plant Refurbishment (Hudson’s Hope, BC) $70 million; 550 MW  Vancouver Island Transmission Reinforcement Project (submarine power cable) $135 million  Brandywine Creek, (near Whistler, BC) $18 million, 6.5 MW  Green Mountain Energy Wind Farm (Brazos, Texas) 160 MW Has permitted over 2,000 MW of power projects     Confidential Information
  8. 8. 8 Global Demand for Power  The International Energy Outlook 2013 (IEO2013) projects that world energy consumption will grow by 56 percent between 2010 and 2040.  Renewable energy is the world's fastest-growing energy source, increasing by 2.5 percent per year. Confidential Information
  9. 9. 9 BC Demand for Power  In British Columbia, B.C. Hydro is forecasting that the province’s electricity needs will grow by as much as 40 per cent over the next 20 years. (as of 2013).  The province’s focus is to secure clean energy sources to meet the growing demand. Confidential Information
  10. 10. 10 Power Demand Synopsis 1 2 3 4 5 6 7 8 9 10 Shale Gas Plays: 1. 2. 3. Cordoba Basin Horn River Basin Montney Basin Proposed LNG Export Facilities: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. AltaGas Idemitsu Joint Venture LNG Canada Kitimat LNG Pacific NorthWest LNG BC LNG Export Co-Operative Imperial Oil/Exxon LNG Project Prince Rupert LNG Nexen/Inpex LNG Project Kitisualt Energy LNG Project Woodfibre LNG Confidential Information
  11. 11. 11 Power Demand Synopsis Mining Facilities: 1. Existing Mines and Quarries a. Metal Mines 10 b. Coal Mines 10 c. Industrial Mineral 36 2. Mines Under Development a. Permitted Projects 4 b. In Mines Act Permitting Process 3 c. EA Certification Process 11 d. Pending Permit Application 11 Confidential Information
  12. 12. 12 Projects  Eclipsol’s answer to the demand for power in B.C. is our Pumped Storage Quesnel Lake cluster projects.  We have collected a high quality portfolio of projects in BC that exceed 1 GW of power generation. Hen Ingram Lake Confidential Information
  13. 13. 13 Why Pumped Storage?  A proven technology Pumped storage has been utilized for more than a century in Europe and the U.S. as a utility-scale energy storage technology with low forced outage rates (<2%).  World wide capacity of pumped storage is more than 130 GW.  Our projects can provide more than 1 GW of firm capacity and is the most compelling solution to the required increase in capacity and firm power production in B.C.  Can alternate pumping and generating as required by BC Hydro. This provides BC Hydro with a versatile utility resource that can provide peaking capacity, ancillary services, arbitrage and transmission optimization.  BC Hydro specifically named this technology in the 2012 Integrated Resource Plan as one of its Recommended Actions. Confidential Information
  14. 14. 14 Pumped Storage Explained At low power pricing, water will be pumped up to reservoir for next cycle. Gravitational flow will rotate turbine to generate power at peak power pricing. Confidential Information
  15. 15. 15 Pumped Storage Explained Top view of turbine configuration in the power house Side view of turbine and pump arrangement Confidential Information
  16. 16. 16 Hen Ingram Hydro Power Station  Capacity: 200 MW  Est. Capex: $680 Million  Plant Type: Pumped Storage  Est. Annual Production: 665,000 MWh  Est. Annual Revenues: $93 Million  Est. Financial Close: 2016  Est. Time of COD: 2018  Est. Cost to Financial Close: $4 Million  Upper Storage Location: Hen Ingram Lake  Lower Storage Location: Quesnel Lake Confidential Information
  17. 17. 17 Project Location Quesnel Lake Soda Creek Project Site Williams Lake 100 Mile House Confidential Information
  18. 18. 18 Geographical Details Quesnel Lake (Lower Reservoir) Power House Penstock Hen Ingram Lake (Upper Reservoir) Confidential Information
  19. 19. 19 Project Geographical Details Power House Intake Upper Reservoir Intake Land Application Area Transmission ROW Confidential Information
  20. 20. 20 Transmission Interconnection Transmission Line Confidential Information
  21. 21. 21 Schedule for Hen Ingram Project 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Investigative Use Permit Hydrology and Environmental Review Environmental Assessment Office First Nations Consulting Electricity Purchase Agreement Financial Close Engineering Construction Confidential Information
  22. 22. 22 Project Development Phases These are four major milestones in the development of a hydro project in British Columbia: 1. Impact Benefit Agreement with First Nation bands 2. Electricity Purchase Agreement (EPA) with BC Hydro 3. Environmental Assessment Approval 4. Closing of the construction and project financing Confidential Information
  23. 23. 23 Environmental Approval We have commenced the following studies in support of our Environmental Assessment Application:  Wildlife and Habitat Studies  Fish and Habitat Studies  Hydrology and Geomorphology studies  Archaeological and Cultural Studies We expect to submit our Environmental Assessment Application in Q2 of 2015 and to receive an Environmental Assessment Certificate by the end of 2015. Confidential Information
  24. 24. 24 Environmental Approval Process Confidential Information
  25. 25. 25 First Nation Consultation We have identified two First Nation bands for consultation: Xatśūll First Nation (Soda Creek Indian Band) and the Williams Lake Indian Band. Our approach is to involve the applicable First Nations as much as possible in all aspects of the project. We will work with First Nations on the identification of employment opportunities associated with the development of the project. Plan of Action:  Enter into an Investigative Use Agreement  Enter into an Impact Benefit Agreement  Ongoing process throughout the project Confidential Information
  26. 26. 26 Electrical Purchase Agreement       Off-taker will be BC Hydro under a long term EPA Expected term of EPA is greater than 40 years (60 years has been contracted recently) Price will be set at a specific price per MWh adjusted for inflation One-off negotiation for an EPA with BC Hydro – instead of waiting until the next Call-for-Power BC Hydro is AAA rated (from Moody’s) Expected time frame to secure EPA: 18 month process from Q3 2014 to Q1 2016 Confidential Information
  27. 27. 27 Financing Plans  We expect to initially raise approximately $20M to fund our four pumped storage projects through permitting, First Nations consultation, EPA negotiations and financial close.  Projects financing will consist of a mix of equity and debt via a project finance structure.  The initial phase of financing will fund construction through a consortium of institutions otherwise known as bridge financing. Upon Commercial Operation Date (COD), this bridge financing will convert to long-term debt.  The debt will be a non-recourse loan, which is secured by the project assets and paid entirely from project cash flow.  Project financing will be divided into equity (25%) and debt (75%) according to market conditions. Financing will be secured by all of the project assets, including the revenue-producing contracts.  We expect to partner with an institutional investor on the equity portion of the project financing, where we will sell a minority interest in the projects. Confidential Information
  28. 28. 28 Hen Ingram Construction Plan  Construction of the facility will be tendered to an Engineer, Procure and Construct (EPC) bidding process after the financial close.  Engage an owner’s engineering firm to consult on procuring the turbines and EPC contactor.  Major equipment will be purchased directly from OEM after the financial close.  Develop an RFP to send to the top five turbine manufactures to bid on the project.  Develop an RFP to send to potential EPC contractors who will be able to accept our guarantee points for performance and the engineering to date. Confidential Information
  29. 29. 29 Hen Ingram Segmented Capital Costs Roads Headworks Tunnel & Escavation Penstock Turbine & Pump Powerhouse Substation Transmission Line Interconnection C onstruction Management Engineering Fish C ompensation Escalation $ $ $ $ $ $ $ $ $ $ $ $ $ 12,000 28,000 15,000 100,000 247,651 45,000 2,500 22,000 3,781 37,641 15,000 380 37,809 Total Direct Costs plus Escalation $ 566,762 Total Indirect Costs $ $ $ 23,253 89,985 113,238 Total Capital Cost2 $ 680,000 C ost per MW $ 3,400.00 Development C osts C ontingency Figures above are in thousands Confidential Information
  30. 30. 30 Why Invest in Eclipsol?  Proven Industry Track Record Our team has developed more than 40 electricity generation projects in North America totalling; more than 1.5 GW of installed capacity in the field of hydro electrical, wind, solar and thermal.  Proven Capital Raising Track Record Our team raised more than $250M for companies in the renewable and conventional energy sectors as well as the mining and technology sectors.  Short Path to Major Valuation Milestones We foresee a three year path to financial close on each of the Hen Ingram Lake, Polley Lake, Keno Lake and Whiffle Lake pumped storage projects in British Columbia, with a total installed capacity of 1 GW. Confidential Information
  31. 31. 31 Why Invest in Eclipsol?  Long Term Power Purchase Agreement Eclipsol will obtain a 40 to 60 year long Power Purchase Agreement from B.C. Hydro for our pumped storage projects (with a set price adjusted for inflation).  Increase in Electricity Consumption In British Columbia, BC Hydro is forecasting that the province’s electricity needs will grow by as much as 40 per cent over the next 20 years and the only renewable solution will be damming or pumped storage. Our projects provide firm capacity to BC Hydro.  Tight Share Capital Structure We have a tight share structure with significant ownership by the principals. We expect to complete the project financing in a manner that will resulting in the least dilution for shareholders. Confidential Information
  32. 32. 32 Polley Hydro Power Station  Capacity: 400 MW  Est. Capex: $1.2 Billion  Plant Type: Pumped Storage  Est. Annual Production: 1,300,000 MWh  Est. Annual Revenues: $182 Million  Est. Financial Close: 2017  Est. Time of COD: 2019  Est. Cost to Financial Close: $4 Million  Upper Storage Location: Polley Lake  Lower Storage Location: Quesnel Lake Confidential Information
  33. 33. 33 Keno & Whiffle Power Plants         Capacity: Est. Capex: Plant Type: Est. Annual Production: Est. Annual Revenues: Est. Financial Close: Est. Time of COD: Est. Cost to financial close: 200 MW (each) $683 Million (each) Pumped Storage 665,000 MWh (each) $93M (each) 2018 2020 $4 Million (each) Confidential Information
  34. 34. 34 Projects Under Review  Sege Wind Farm    Duncan Lake Hydro Plant    200 MW British Columbia, Canada Spanish Lake Hydro Plant    235 MW Ghana, Africa 200 MW British Columbia, Canada Haana Wind Farm   20 MW British Columbia, Canada Confidential Information
  35. 35. 35 Contact Information Eclipsol Energy Inc.  Address: Suite 830 – 1100 Melville Street Vancouver, B.C. V6E 4A6  Phone: 1.888.412.8380  Contact: Robert Coelho  Email:  Web: Confidential Information