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Luis Santos Senior Managing Director Espirito Santo Investment Bank

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Luis Santos Senior Managing Director Espirito Santo Investment Bank

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    1. Luis Santos Senior Managing Director Espirito Santo Investment Bank/Execution Noble

    4. Espírito Santo Investment Bank (“BESI”) is the investment bank arm of Group Banco Espirito Santo (“GBES”) and is 100% owned by Banco Espírito Santo BESI is expanding its international operations, offering integrated investment banking services while maintaining a leading position in the domestic market

    7. Vast experience in Renewables: MLA role on the project financing of more than EUR 5 bn in several projects in Portugal, Spain, France, Germany, Poland, Australia, the USA, Chile and Mexico Current involvement in a total of 175 projects of Renewables, with a total installed power capacity of circa 4.500 MW; Current total commitment of EUR 1.400 M Experience on financing structures on both a project by project and a portfolio basis Experience in different market practices Capacity to execute added value transactions involving innovative and flexible solutions Experience on the management of due diligence processes on an objective and timely manner (technical, legal, tax and insurance) Focus on the optimization of the shareholders’ return

    9. The Potential 25% of potential European renewable wind & tidal capacity, and 10% of potential European wave capacity. Sustainable competitive advantage – the wind and the waves are there to be used! Capital intensive start-up industry that will need access to sizeable risk capital. Well-connected to higher educational institutions for R&D purposes and new spin-outs Financing Approach Need for Ł177bn to fund offshore developments in Scotland by 2050 – Offshore Valuation report as quoted by Alec Salmond, First Minister of Scotland Equates to >100% of renewable investment worldwide in 2009 – Bloomberg Energy Financing Report Scotland in competition with Portugal, Spain, Italy, Denmark, Ireland etc for capital for renewables Need to see capital markets as central to the solution, and provide stable environment for investment

    10. Liquidity Constraints: The very limited access to funding is the main obstacle to the development of new projects that some European countries are currently facing Regulatory Risk: - Non-regulated PPA vs feed in tariff regimes in Portugal, Spain, France,… - PPA (electricity) and CPA (green certificates) negotiated on a bilateral basis with local utilities – mix of solutions, ie. blended price fixed, cap&floor, 100% market tariff, … - Stability on regulations and energy prices - Change in Law risk allocation between Borrower and Offtaker Legal Issues: - Environmental restrictions – specific due diligence needs to be undertaken - Licensing process - start of commercial activities / COD (sale of electricity and green certificates) vs issuance of generation license Multilaterals: EIB participation of crucial importance given the current liquidity constraints - raises additional requirements about documentation (ie. intercreditor issues) Capital Markets: Credit enhancement mechanisms are required for the establishment of capital markets as a source of financing in this area

    11. Adequate legal and regulatory framework Credible sponsors Satisfactory due diligence process – stabilization of the main project assumptions (capex, opex, production, revenues) Adequate contractual structure / allocation of risks Implementation of risk mitigation mechanisms Definition of minimum levels of debt service cover ratios for the base case and for some sensitivity scenarios Definition of the minimum level of project equity to be committed by the sponsors Determination of the maximum amount of the project’s senior debt

    15. Contacts

    16. ‘Delivering the Scottish Green Energy Opportunity’ Scottish European Green Energy Centre Conference In association with the European Commission

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