Marc Schmitz

1
European Offshore Wind 2009
A bankers view on the European offshore wind
energy market
Marc Schmitz Senior Vice President REIF, Rabobank
International
2
Rabobank and Clean Tech
Rabobanks investments in Clean Tech In bln Euros

• Rabobanks global clean tech ambitions
• Sustainability is engrained in the genes of
  Rabobank and all its core activities
• Climate is a priority and viewed as a crucial
  theme in sustainability
• Ambition to engage actively in the transition
  towards a low-carbon economy

• Rabo Greenbank 4.0
• Rabo Ventures 0.2
• Project Finance Renewable Energy 1.2
• SAM (CH) 6.5
• Robeco Sustainable Engagement 5.4
• Robeco Clean Tech I and II 0.8
• Sarasin (CH) 0.7
• Low energy Real Estate 0.9
• Total 20

3
Renewable Energy Infrastructure Finance

• The REIF team is a highly experienced and
  professional team with extensive experience in
  financing of renewable energy and PPP projects
• The team consists of 15 individuals
• Languages Dutch, English, German, French,
  Spanish and Italian.
• Team experience large innovative deals across
  Europe (i.e. first non recourse offshore wind
  park in the Netherlands and experience in bio
  fuels)
• REIF has an international orientation and
  network, covering Europe, the Americas and a part
  of Asia. The team is supported by a network of
  local relationship managers in each International
  Branch, as well as dedicated loan syndicators and
  credit analysts
• REIF offers tailor made structures that enable
  the financing of various projects. Being a
  partner of key customers in the renewable energy
  market, REIF always makes an extensive analysis
  to find a suitable structuring for every project

Tanja Cuppen Head Corporate Finance
Marcel Gerritsen Global Head of REIF
Secretary
REIF Asia
REIF Americas
REIF Europe
4
Factors influencing offshore wind
A Preconditions
B Project Viability
C Project Economics

• Suitable locations and leases
• Subsidy
• Level
• Security
• Other legislation
• Permits
• Offshore spatial planning
• Grid connection
• Public opinion

• Location
• Wind characteristics
• Water depth
• Distance to shore and harbour
• Availability of
• Sponsors
• Staff
• Contractors
• Turbines
• Vessels

• Risk
• Risk in offshore wind
• Interface risk
• Risk mitigation
• Project Structure
• Financing structure detail

• Investment decision

• Country focus

• Site selection

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Investment decision and bankability

• Three essential elements
• Turbines Vessels, BOP (incl. guarantee
  structure)
• Project structure / risk mitigation(usage of
  ECAs and EIB)
• Subsidy regime (different per country)

6
Country choice government support important
factor
  Support system Total revenue (EUR/MWh) Level of support (EUR/MWh) Duration of support (years) Market electricity price estimate (EUR/MWh) Grid connection paid by
Belgium Hybrid green certificates 150 (variable) 107 20 35-50 Both
Germany Feed-in-Tariff 150 150 1281 Not relevant Government
Netherlands Likely Tender plus premium payment Unknown Unknown Unknown, likely 15 35-50 Developer
UK Green Certificates 123 (variable) 832 (variable) Asset lifetime 30-50 Developer
1 In Germany, offshore wind producers receive a high FiT for the first 12 years, and after that a lower tariff, depending on project circumstances (water depth and distance to shore) 2 This level is valid for the normal support level of 1.5 ROC/MWh. For those projects that will receive 2 ROCs per MWh under the UK Governments economic stimulus measures, the level of support will be higher, at around 100 EUR/MWh, and total revenue will in that case end up around 150 EUR/MWh. 1 In Germany, offshore wind producers receive a high FiT for the first 12 years, and after that a lower tariff, depending on project circumstances (water depth and distance to shore) 2 This level is valid for the normal support level of 1.5 ROC/MWh. For those projects that will receive 2 ROCs per MWh under the UK Governments economic stimulus measures, the level of support will be higher, at around 100 EUR/MWh, and total revenue will in that case end up around 150 EUR/MWh. 1 In Germany, offshore wind producers receive a high FiT for the first 12 years, and after that a lower tariff, depending on project circumstances (water depth and distance to shore) 2 This level is valid for the normal support level of 1.5 ROC/MWh. For those projects that will receive 2 ROCs per MWh under the UK Governments economic stimulus measures, the level of support will be higher, at around 100 EUR/MWh, and total revenue will in that case end up around 150 EUR/MWh. 1 In Germany, offshore wind producers receive a high FiT for the first 12 years, and after that a lower tariff, depending on project circumstances (water depth and distance to shore) 2 This level is valid for the normal support level of 1.5 ROC/MWh. For those projects that will receive 2 ROCs per MWh under the UK Governments economic stimulus measures, the level of support will be higher, at around 100 EUR/MWh, and total revenue will in that case end up around 150 EUR/MWh. 1 In Germany, offshore wind producers receive a high FiT for the first 12 years, and after that a lower tariff, depending on project circumstances (water depth and distance to shore) 2 This level is valid for the normal support level of 1.5 ROC/MWh. For those projects that will receive 2 ROCs per MWh under the UK Governments economic stimulus measures, the level of support will be higher, at around 100 EUR/MWh, and total revenue will in that case end up around 150 EUR/MWh. 1 In Germany, offshore wind producers receive a high FiT for the first 12 years, and after that a lower tariff, depending on project circumstances (water depth and distance to shore) 2 This level is valid for the normal support level of 1.5 ROC/MWh. For those projects that will receive 2 ROCs per MWh under the UK Governments economic stimulus measures, the level of support will be higher, at around 100 EUR/MWh, and total revenue will in that case end up around 150 EUR/MWh. 1 In Germany, offshore wind producers receive a high FiT for the first 12 years, and after that a lower tariff, depending on project circumstances (water depth and distance to shore) 2 This level is valid for the normal support level of 1.5 ROC/MWh. For those projects that will receive 2 ROCs per MWh under the UK Governments economic stimulus measures, the level of support will be higher, at around 100 EUR/MWh, and total revenue will in that case end up around 150 EUR/MWh.
7
Financing structure

• Financing structure depends on project structure
• More Equity needed in current market
• Tenor (long term depends on term of the subsidy
  PPA)
• Margins increased due to liquidity costs and
• Cash sweeps in place due to market and technical
  risks
• Rabobank can provide a total financing package
• Project equity
• Mezzanine debt
• Senior debt

8
Belwind deal an overview

• Senior lenders Rabobank, ASN, Dexia, EIB, EKF
• Mezzanine lenders e.g. Rabobank, PMV
• Equity providers Rabobank, Colruyt, SHV,
  Meewind, PMV
• Why does Rabobank consider mezzanine lending
• Less equity required
• Higher leverage in the projects
• Higher return on equity
• Total financing package (i.e. senior / mezzanine
  / equity)

9
Belwind deal the process

• Success factors
• Stable group of MLAs Financing already in place
  in March Support of EIB and EKF
• Good subsidy regime
• Relationship between contractors, MLAs and final
  shareholders
• Experienced MLA group Rabo, Dexia, EKF involved
  in Q7/ Prinses Amalia Park
• Same contractors as Q7/ Prinses Amalia Park (Van
  Oord Vestas)

• Issues
• Hard to get equity in place loss of several
  equity providers during the process
• Low grey electricity prices
• High financing costs
• Time consuming

10
Offshore wind growth prediction
Rabobank expectation 2020 Around 30,000 MW
installed in Europe
2014-2020possible shortagesin the value chain
2009-2013no shortage of vesselsand turbines
11
Investment level

• Rabobank expectation of app. 30 GW installed
  offshore in 2020 would require app. 100 bln EUR
  in cumulative investments in the EU27 alone
• Annual investments are predicted to reach a level
  of around 15 bln EUR per year from 2014

Investments needed for offshore wind in the
EU-27 Rabobank predictions to 2018 in mln EUR
12
Track record offshore wind

• Current mandates Borkum, Bard, Boreas
• Actively involved in several other European
  offshore wind projects (ongoing)

13
Contact Details
14
Contact Details

• Renewable Energy and Infrastructure Finance
• Marc Schmitz
• Senior vice president REIF
• t. 31 30 216 3074
• f. 31 30 216 1920
• e. Marc.Schmitz_at_rabobank.com
• Marcel Gerritsen
• Global Head REIF
• t. 31 30 216 5794
• f. 31 30 216 1949
• e. marcel.gerritsen_at_rabobank.com

Clean Tech Research Maartje van den Berg Senior
Associate Clean Tech Research t. 31 30 216
6193 f. 31 30 216 1920 e.Maartje.van.den.Berg_at_ra
bobank.com Visiting address Gildenkwartier
199 3511 DH Utrecht The Netherlands Postal
address P.O. Box 17199 UH-B 2038 3500 HG
Utrecht The Netherlands

• Rabobank International Renewable Energy and
  Infrastructure Finance
• Visiting address
• Croeselaan 28
• 3521 CB Utrecht (UCZ 7044)
• The Netherlands
• Postal address
• P.O. Box 17100
• 3500 HG Utrecht
• The Netherlands

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Disclaimer

• This presentation has been prepared by Rabobank
  International (Rabobank) exclusively for the
  benefit and internal use of the audience of the
  EWEA offshore wind congress (the "Client") and
  does not carry any right of publication or
  disclosure other than to its professional
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  Neither this presentation nor any of its contents
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  prior written consent of Rabobank. The
  information in this presentation reflects
  prevailing market conditions and our judgment as
  of this date, all of which may be subject to
  change. This presentation is based on public
  information. The information and opinions
  contained in this presentation have been compiled
  or arrived at from sources believed to be
  reliable, but no representation or warranty,
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  contained in this presentation are entirely
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  to provide the Client with a fair indication on a
  potential transaction between the Client and
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•  The information in this presentation is not
  intended and may not be understood as an advice
  (including without limitation an advice within
  the meaning of article 11 and article 423 of
  the Financial Supervision Act). Client is advised
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