Malaysia Debt Ventures Berhad Financing Green Technology Projects Kuching, Sarawak 2014

1. Malaysia Debt Ventures Berhad Financing Green Technology Projects Kuching, Sarawak 2014

2. About MDV - Introduction Section 1.1 • Wholly owned by the Minister of Finance Inc, Malaysia; • Started operations in 2003 with initial funding dedicated for ICT; • Total fund size of more than RM4 billion to finance ICT, Biotechnology and Green Technology projects; • Dual Role – Innovative Financier and Development Facilitator for ICT, Biotechnology and Green Energy sector; • MDV has approved more than RM7.0 billion in financing for projects; • MDV has financed approximately 599 technology projects, of which approx. 73% were SMEs

3. Technology Focus Section 1.2

4. Section 1.3 MDV Core Financing Products

5. Section 1.4 MDV Special Programmes

6. MDV’S Unique Value Proposition vs Banks & VCs Section 1.5

7. Greentech SME and MDV Financing - Criteria Section 1.6

8. Green Projects Funded By MDV Section 1.7 HYDRO & MICRO HYDRO SOLAR POWER GENERATION GREEN PROJECTS WASTE TO ENERGY GREEN MATERIALS SEWERAGE TREATMENT ENERGY EFFICIENT & ELECTRIC VEHICLES

9. Financing Structures by MDV Section 1.8 Customised PROJECT FINANCING Flexible PROGRAMME FINANCING Cost-Effective

10. Financing Technologies - DUE-DILIGENCE TOOLBOX Section 1.9 MANAGEMENT CAPABILITIES COMPARABLE ANALYSIS TECHNOLOGY REVIEW PROJECT PLANNING COST REASONABLENESS

11. MDV Processes Section 2.0 Decision • Pre-Assessment • & Support • Pre-Due Diligence • & Due Diligence • Documentation • First Drawdown • & Disbursement Approval Submission of Application Issuance of Letter of Offer Disbursement Facilities Agreement & Security Documents Fulfillment of CP & Execution of Security Documents Discussion & Application Support Assessment & Evaluation • Time taken to process (application to decision letter): • Standard Financing 30 working days • Small Contract/ • Project financing • Special Programs 14 – 21 working days 7 - 14 working days

12. MDV Portfolio By Sectors Section 2.1 Segmentation by industry and outstanding loan amount

13. GTFS Application Process Section 2.2 GTFS Application Business Review Technical Evaluation Green Tech Financing Scheme (GTFS) administered by Green Tech Corporation Malaysia Upon approval, issuance of Green Project Financing Recommendation Certificate Green Project Financing Recommendation Certificate  Financing Application Guarantee Approval

14. Financing High Impact Technologies - STRUCTURES Section 2.3 SOLAR FARM Statutory Body administer FiT mechanism Solar Cells/ Panels Civil & Mechanical Sale of electricity to Grid Land & Infrastructure Distribution Licensee Electrical Components Feed-In Tariff Allows FIAH to sell electricity to DLs Solar Farm MDV Customer EPCC Operating Expenses Civil & Mechanical Assignment of Proceeds PROJECT FINANCING REPAYMENT REVOLVING FACILITY Direct Payment to Vendors/Suppliers

15. Challenges on Financing RE Projects - PV Section 2.4 • To ascertain Sunlight / Irradiation level; • Required High Long Term average annual GHI area (Global Horizontal Irradiation – the total solar energy received on a unit area of horizontal surface); • Scope of EPCC :- • Feasibility Study • Design of the system & lay out plan • Obtaining relevant License & Permits • Procurement of PV Modules & other electrical components i.e. inverters, transformer, junction box & etc.; • Civil Construction – mounting structures; • System Commissioning and connecting to grid. • Cost range at RM8m – RM11m per MW SOLAR PROJECT

16. Challenges on Financing RE Projects - PV Section 2.5 • Direct Payment based on independent progress report or upfront payment according to EPCC/LC for procurement of equipment; • Repayment from TNB based on REPPA according to FiT fixed by SEDA; • Land Matters on:- • Local Authority Clearance • Avoid Flood Area • Locality close to Grid; • Financing on Non-Revolving (Project Based Financing); • Potential Significant Risks:- • Variation on predicted energy yield due to weather • Lack of maintenance (in the event where O&M contract is not in place) SOLAR PROJECT

17. Challenges on Financing RE Projects - Benchmarking Section 2.6 Solar Power Developers Utility – Ranking Scale

18. Challenges on Financing RE Projects - Benchmarking Section 2.7

19. Challenges on Financing RE Projects - Benchmarking Section 2.8 Major Suppliers - Components

20. Financing High Impact Technologies - STRUCTURES Section 2.9 BIO-ENERGY FACILITY Bio-EnergyProducer 3RD Party Mill 3RD Party Mill Supply of Steam Boiler Paper Mill Purchase Agreements Supply of EFB Control Systems Civil & Mechanical REPAYMENT PROJECT FINANCING Purchase of Steam pegged to fuel oil prices Direct Payment to Vendors/Suppliers

21. Challenges on Financing RE Projects – Biomass / Biogas Section 3.0 • To ensure long term/steady supply of raw materials with long term competitive pricing; • Double cash out flow as compared to solar PV; • Locality is accessible to source of supply; • Scope of EPCC :- • Civil & Mechanical • Electrical Components • Procurement of Equipment • Construction; • Direct payment based on independent progress report or upfront payment / LC for procurement of equipment; • Land requires Local Authority Clearance. BIO-ENERGY PROJECT

22. Challenges on Financing RE Projects – Biomass / Biogas Section 3.1 • Repayment from TNB is based on REPPA and FiT rate received without additional contribution from SEDA; • Biogas and Biomass rate should be higher due to double cash flow to purchase raw materials or producer should owned/control their source of supply of which otherwise project is unlikely to be feasible due to high demand/price; • Type of Financing structured for Non-Revolving (project financing) and small portion of revolving (working capital for purchase of raw material); • Potential Risk will be on Industry Risk • Discontinued supply of raw material – price and change of crops planted (new found crops) • Future development BIO-ENERGY PROJECT

23. Thank You Section 3.2 Question & Answer Session

24. Amiruddin Kemat amiruddin@mdv.com.my