This document discusses the solar future in Belgium and infrastructure investment opportunities related to solar power. It covers the following key points: - DG Infra+ and DG Infra Yield are infrastructure investment funds totaling €250 million managed by GIMV and Dexia that invest in areas like renewable energy, transport, water and telecom. - PV installations are capital intensive and not a core asset for most industrial companies, so they are often developed and financed through separate dedicated structures. - Investing in PV installations involves various risks across development, operation and dismantling phases that must be carefully allocated and managed to achieve appropriate risk-adjusted returns for investors. - The solar future in Belgium will depend on

1. The Solar Future in Belgium
Infrastructure Investor: DG Infra+ / DG Infra Yield
March 23, 2011

2. 2
DG Infra+ and DG Infra Yield
sponsored and managed by GIMV and Dexia
 Infrastructure activities launched end 2007 through a joint-venture of GIMV and Dexia
 2 dedicated and complimentary infrastructure investment funds with EUR 250m of capital
committed and available for investment
 DG Infra+
 DG Infra Yield
 Team of 8 professionals, located in Antwerp and The Hague (at the premises of Gimv)
 Capital raised from 3th party investors including insurance companies and pension funds
 Investments across different target sectors:
 Public Private Partnerships  Waste
 (Renewable) energy  Water
 Transport / Logistics  Social infrastructure
 Selective real estate  Telecom / ICT

3. DG Infra+ and DG Infra Yield
Key terms and features
DG Infra+ DG Infra Yield
Investment Focus Infrastructure and selective real Infrastructure and selective real estate
estate
Geographical Predominantly Benelux Predominantly Benelux
Focus
Risk Profile Development and/or Limited exposure to development and
construction risk allowed construction risk (only when
subordinated or senior debt
investments)
Return Profile Focus on value creation and Focus on periodic cash distributions
capital gains
Financing solution Equity, Equity-linked debt Secondary equity, Subordinated debt,
Senior debt
Fund Size 135 million 116 million (first Closing)
Incorporation 2007 2011
Term 12 years 30 years

4. 4
PV Installations : who will invest ?
 Not interesting for industrial companies
 Capital intensive - often burden on financial structure
 Not a core asset for industrial companies
 Value destructive: return on asset often lower than capital cost of an industrial company
 Project developers mostly prefer to set up a separate dedicated structure for the financing of
PV installations:
 Focus on developing – prefer to free-up capital for the next project(s)
 Often not capital intensive companies
 Investment funds / Institutional (direct) investors
 Subject to correct risk / return profile
 Perception of the sector often important (e.g. renewable energy is hot)

5. 5
PV Installations : an easy investment ?
 Different project phases:  Main participants:
 Development phase  Client
 Operational phase  Project developer (PD)
 End phase - dismantling  EPC contractor (EPC)
 O&M contractor (O&M)
 Manufacturers of parts
 Bank (or leasing company)
 Investor
 Each project phase has its specific risks:
 Who is bearing a specific risk ?
 How is the risk managed ?
 Allocate the risk to the participant who can best manage that risk
 Investors are not prepared to take some of the risks

6. 6
PV Installations : an easy investment ?
Main risks in the development phase … to be allocated to … … and managed through …
 Stability of the roof Client Building right agreement
Insurance contract
 Grid capacity Client Building right agreement
 Building permit in place (land based) Client Building right agreement
 Find appropriate financing PD / Client Building right agreement
 Construction delays PD / EPC Building right agreement
EPC guarantee*
 Quality and performance of installation PD / EPC Techn. DD / EPC guarantee
 Quality of parts (PV module, inverter, …) Manufacturer Techn. DD / suppl. guarantee
 Quality of monitoring and reporting PD / EPC Techn. DD / EPC Agreement
 Damage (building or PV installation) Insurance comp. Insurance contracts
* remark: the value of a guarantee also depends on the strength of the guarantor

7. 7
PV Installations : an easy investment ?
Main risks in the operational phase … to be allocated to … … and managed through …
 Performance of the PV Installation EPC / O&M Guarantee EPC / O&M
 Availability of the PV Installation EPC / O&M Guarantee EPC / O&M
 Interruption of parts (module, inverter, …) Manufacturer Supplier agreement
 Roof renovation Client Building right agreement
 Damages (building or PV installation) Insurance comp. Insurance contracts
 Retroactive changes to regulation Client / Investor Building right agreement
 Radiation Investor / Bank
 Client bankruptcy Investor / Bank building right agreement
 % of local use of electricity Investor / Bank Local PPA
 Evolution of market electricity prices Investor / Bank Local / Excess PPA
 Evolution of market interest rates Investor / Bank Hedging agreement
 Delayed cash flows Investor / Bank Financing Agreement
 Event of default in financing agreement Investor / Bank Financing Agreement

8. 8
PV Installations : an easy investment ?
Main risks in the dismantling phase … to be allocated to … … and managed through …
 Ownership of the PV Installation PD / EPC / Client Building right agreement
 Dismantling cost PD / EPC / Client Building right agreement
Conclusion
 Investing in PV installations is not an easy and straight-forward exercise
 Varying deal structures, risk allocations and definitions of risk management can have a large
impact on the returns for investors

9. 9
Return Requirements ?
 The return requirement of the investor is not just a fixed rate, but will depend on:
 Deal structure
 Risk allocation and management
 The strength of the guarantor related to a guarantee
 Some projects can possibly not be financed
 Extensive due diligence:
 Technical due diligence (installation + PV modules)
 Building right agreement
 Insurance contracts
 Local / excess PPA
 EPC Agreement + EPC Contractor itself
 Supplier agreement + Supplier itself
 O&M Agreement
 Financing and hedging agreement

10. 10
2011 and 2012 ?
 The Solar Future in Belgium will definitely depend on the evolution of the following items:
 Minimum guarantees on the green certificates
 Market electricity prices
 Price of the PV modules
 Market interest rates
 However, the Solar Future will also depend on how risks have been and will be allocated and
managed. If not, this could have detrimental consequences:
 For the client:
 Development phase: delayed PV installation at less favorable conditions
 Operational phase: less local electricity and / or less rental fees
 For the investors / banks: lower returns or even write-offs
 And in the end also for the solar sector itself as it would become more difficult to get
new clients and investors.
 Hence, the solar sector itself is to a certain extent also responsible for its own future.

11. 11
Questions ?