Financing offshore wind in 2011

1. Financing offshore wind in 2011 Tuesday 15 March 2011 (14:00 – 15:30) - Panel discussion Chairs Clémentine TASSIN, Dexia Jérôme GUILLET, Green Giraffe Energy Bankers Speakers Marc SCHMITZ, Rabobank Filip MARTENS, C-Power Christos KOLLIATSAS, Mott MacDonald Fintan WHELAN, Mainstream Renewable Power

2. Financing offshore wind in 2011 • Facts : onshore wind vs offshore wind • Onshore wind project finance works • Offshore wind project finance is still in its infancy

3. Financing offshore wind in 2011 • Facts : onshore wind vs offshore wind • Onshore wind project finance works • Offshore wind project finance is still in its infancy

4. 1. Onshore wind versus offshore wind • Onshore wind is mature in many European countries but will grow for another decade (new markets) before slowly declining • Offshore wind is entering the full industrialisation phase and is growing strongly • Offshore is expected to overtake onshore within 15 years, although that will happen in several countries (UK, Germany) much faster Source: free translation from « EWEA, PWC analysis »

5. 1. Onshore wind versus offshore wind Source: BWEA/ Garrad Hassan, UK Offshore Wind: Charting the Right Course, 2010 Source:ExxonMobil WEO 2011 • Onshore wind is largely expected to be cost competitive in the coming decade • Support regimes should focus on price stability rather than price levels • Offshore wind has seen substantial cost increases in recent years and remains more expensive per kWh (12-15c/kWh vs 6-8c/kWh) • Support regimes require subsidy component

6. Financing offshore wind in 2011 • Facts : onshore wind vs offshore wind • Onshore wind project finance works • Offshore wind project finance is still in its infancy

7. 2. Onshore wind project finance works • 60% of total investment in the sector over the past several years provided by PF • Risks are well identified and understood • A number of proven financing structures exist and are used worldwide • Strong track record on onshore wind deals • Long list of banks having financed onshore wind deals • But detailed risk analysis must remain the rule • Wind studies have been a bit too optimistic • Regulatory uncertainty / instability still a worry • New markets have less experience with PF due diligence discipline

8. 2. Onshore wind project finance works • The financial crisis did hit the sector in 2009-2010 • Banks retrenched to core markets and well-known clients • Funding is available, but not for the aggressive structures of 2006-2007 Source: GGEB estimates

9. Financing offshore wind in 2011 • Facts : onshore wind vs offshore wind • Onshore wind project finance works • Offshore wind project finance is still in its infancy

10. 3. Offshore wind project finance is still in its infancy Source: EWEA Source: EWEA, Oceans of Opportunity • Investment volumes are growing rapidly from almost nothing to several billion euros per year • The learning curve is very steep as projects go deeper, further, and get larger Source: KPMG

11. 3. Offshore wind project finance is still in its infancy • The market exists • Banks have financed 20% of investments so far on a non-recourse basis • 6 transactions so far, 3-5 more expected this year • Continental market more active, successful & experienced than London market • Serious challenges remain • Offshore is still new and scary for banks, with few precedents to refer to • Size of transactions is an obstacle in the absence of underwriting capacity • Utilities need to accept more intrusive due diligence and contract review • Transactions today can happen and will happen, but only with appropriately conservative structures, high quality due diligence and full transparency

12. FINANCING OFFSHORE WIND IN 2011 Chairs: JérômeGuillet, Green Giraffe Energy Bankers, France ClémentineTassin, Dexia, France • Marc Schmitz • Rabobank, The Netherlands.   • Filip Martens • C-Power, Belgium • Christos Kolliatsas • Mott MacDonald, United Kingdom • Fintan Whelan • Mainstream Renewable Power, Ireland 

13. FINANCING OFFSHORE WIND IN 2011 Chairs: JérômeGuillet, Green Giraffe Energy Bankers, France ClémentineTassin, Dexia, France • Marc Schmitz • Rabobank, The Netherlands.   • Filip Martens • C-Power, Belgium • Christos Kolliatsas • Mott MacDonald, United Kingdom • Fintan Whelan • Mainstream Renewable Power, Ireland 

14. FINANCING OFFSHORE WIND IN 2011 Chairs: JérômeGuillet, Green Giraffe Energy Bankers, France ClémentineTassin, Dexia, France • Marc Schmitz • Rabobank, The Netherlands.   • Filip Martens • C-Power, Belgium • Christos Kolliatsas • Mott MacDonald, United Kingdom • Fintan Whelan • Mainstream Renewable Power, Ireland 

15. FINANCING OFFSHORE WIND IN 2011 Chairs: JérômeGuillet, Green Giraffe Energy Bankers, France ClémentineTassin, Dexia, France • Marc Schmitz • Rabobank, The Netherlands.   • Filip Martens • C-Power, Belgium • Christos Kolliatsas • Mott MacDonald, United Kingdom • Fintan Whelan • Mainstream Renewable Power, Ireland 

16. FINANCING OFFSHORE WIND IN 2011 Chairs: JérômeGuillet, Green Giraffe Energy Bankers, France ClémentineTassin, Dexia, France • Marc Schmitz • Rabobank, The Netherlands.   • Filip Martens • C-Power, Belgium • Christos Kolliatsas • Mott MacDonald, United Kingdom • Fintan Whelan • Mainstream Renewable Power, Ireland