EWEC 2010 - Project Finance Session

Debt for onshore wind projects: the light at the end of the tunnel?

Alain Delsupexhe CEO Eolfi, Veolia Environnement

21st April, 2010

Eolfi at a glance

• Eolfi is the wind and solar subsidiary of Veolia

• Global team of 122 people on two platforms : US & Europe (France, Greece, Poland)

• An integrated renewable project developer and operator active along 4 business lines:

Operating Services

Asset Management

Power Generation 410MW of operating capacity on Eolfi balance sheet by 2015

€250 million of equity under management

Supervising over 500 MW in construction or operation

Development 6.7GW gross wind and solar portfolio in 4 countries

Eolfi: facts and figures

€580 million of new debt financing in 2010

Equity under management:

• €250 million raised as of 2010

Project Finance:

• €350 million debt raised as of 2009• €580 million to be raised in 2010

Banks show signs of recovery

• Peak in pricing at

300 bps

• Reduced tenors

• Lower gearing

• End of syndication

• Longer closings

09/2008: Lehman collapse

• EIB, EBRD, ECAs or

KfW for better terms

• Mini-perms

structures

2009 : saved by multi-laterals and

state-backed banks

• Syndication market

poised to reopen

• Appetite for deals

• Margins <200 bps

• Tenors beyond PPA

2010

Recipes to manage bankers’ loyalty

Ought to be a Tier 1 sponsor

Regulated markets

Mitigateproject risks

Offercross-selling

revenues

- Banks focus on deep-pocket sponsors, relationship clients and track-record

- M&A, advisory, hedging opportunities do increase appeal

- Prefer EPC contracts, portfolio effects and quality off-takers

- Feed-in tariffs and subsidies are preferred

Banks remain selective, prompting borrowers to improve attractiveness

Commit to along-term

involvement

- Long-term commitment and technical involvement of the sponsors enhance bankability

Towards alternative sources of financing ?

Commercial Banks :

• advising • coordinating • structuring

ECAs & State-backed banks

Funding/guarantees for permitted projects

Multi-Laterals(EIB, EBRD, IFC)

Funding/guarantees for permitted projects

Debt Capital MarketsTowards bonds issuance?

Bond refinancing after a few years of operation

• Alternative sources of funding alleviate banks equity constraints• Commercial banks will have a major role for origination and

coordination

Banks come back! And margins go down!

But bankers remain selective on quality due to their balance sheet restrictions

Prompting borrowers to seek alternative sources of financing.

Conclusion

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EOLFI – 25, place de la Madeleine - 75008 Paris (France) - tel + 33 1 40 07 95 00 - contact@eolfi.com

Eolfi is the wind and solar subsidiary of Veolia Environnement

Eolfi focuses on all aspects of solar and wind power production, from acquisition and financing, to development, construction and electricity generation. We are a fully integrated operator of solar and wind parks with projects in France, Greece, Poland and the US.

Eolfi25, Place de la Madeleine75008 Paris

Tél : +33 1 40 07 95 00Fax : +33 1 40 07 95 06www.eolfi.com – contact@eolfi.com