Polaris Renewable Energy Inc. · TSX:PIF
Polaris Renewable Energy — Investor Presentation (June 2023)
48 slides from Polaris Renewable Energy's investor presentation, June 2023
Slide 1: Corporate Overview
Corporate Overview JUNE 2023
Slide 2: Forward-Looking Information
Forward-Looking Information This Presentation contains certain “forward-looking information” which may include, but is not limited to, statements with respect to future events or future performance, management’s expectations regarding the Company’s pro-forma financial profile, growth of cash flow pe
Slide 3: Overview
POLARIS —. RENEWABLE ENERGY ~—
Slide 4: Polaris Overview
Polaris Overview Polaris is an Owner, operator, developer Nicaragua Dominican Republic 72 MW and acquirer of renewable energy projects 25 MW in Latin America. • 7 Plants currently in Operation Panama 10 M W • 1 starting construction Ecuador 6 MW Goal Create a mid-size, regional platform in Latin Ame
Slide 5: Capital Markets Snapshot
Capital Markets Snapshot SHARES OUTSTANDING (1) DEBT (1) ANNUAL DIVIDEND 21.0 mm US$189 mm US$0.60 MARKET CAPITALIZATION (2) CASH ON HAND DIVIDEND YIELD US$227 mm US$40 mm 5.6% 2023E EBITDA(3) ENTERPRISE VALUE (4) EV / EBITDA MULTIPLE (3) ~US$57-$61 mm ~US$376 mm ~ 6.0x-6.5x PRICE 2023E OPERATING CA
Slide 6: Why Latin America?
Why Latin America? Grids continue to grow ~ 3 to 6% per year. Per Capita power consumption remains a fraction of N.A i.e. 1/5th to 1/10th Nuclear, coal and large dams much less likely than N.A. Renewables key Fossil fuels still play a key role in most grids – pricing power – inflationary
Slide 7: Key Assets Are in Place
Key Assets Are in Place Strong team - Offices in Toronto, Approximately Lima, Panama, Managua, Growing Markets 200 Employees in total Quito, DR ESG Compliant in all aspects Current Cash flow Identifiable growth – always have been – generation to fund growth opportunities key for attracting capital 7
Slide 8: Skillset from project sourcing to project operations
Skillset from project sourcing to project operations 1 2 3 9 4 5 6 7 8 BUILD OPERATE/ DEVELOP/ MANAGE SOCIAL/ FINANCE ENVIRON. IMPROVEMENT/ PRIORITIZE SYNERGY ASSESS ACCOUNTING/ HR/ADMIN. IDENTIFY 8
Slide 9: Corporate Finance / Development Team - Toronto
Corporate Finance / Development Team - Toronto Fernando Marc Michael Anton Jelic Alba Joffre Denise Parada Murnaghan Kosiancic Chief Financial Priscila Cortes Seisdedos Director, VP, Finance Chief Executive VP. Officer VP, Finance VP, Taxation & Project Transformation Executive Project Legal Affairs
Slide 10: Regional Operating / Project Management Team
Regional Operating / Project Management Team Guzman Leonel Marcela Johnny Alexis Osorno Fernandez Carlos Díaz Alonzo Allen Poveda Bascopé Bendaña Senior VP. VP. Corporate Regional Regional Regional O&M Regional Regional Latin America Development Manager Financial Manager Sustainability Corporate HR
Slide 11: ESG – Long History and Core Focus
ESG – Long History and Core Focus ESG-POLARIS-2021-Annual-Report-1.pdf (polarisrei.com) 100% Renewable Energy ENVIRONMENTAL SOCIAL World Class Social Programs GOVERNANCE Highly involved and Diversified Board ESG IS A KEY STRENGTH 11
Slide 12: Conservative Contract Structure and Balance Sheet
Conservative Contract Structure and Balance Sheet 100% of Revenues denominated in US$ 98% of Revenues fully contracted with Government entities Panama not contracted (~2% of revenue) but will assess contract opportunities in next 12 months Weighted average remaining life on contracts of ~13.
Slide 13: Contract Summary
Contract Summary Project Off-Taker Terms Price/Indexation Government Owned 1) 18 Years to January 2039 San Jacinto (Nicaragua) 2) No delivery minimum 1) $111.20 Fixed Price Dis Norte Dis Sur (DNDS) 1) Initial price of $125/MWh Regulated Distributor 1) 20-years to March 2040 Canoa I (DR) 2) Escalated
Slide 14: Project Debt Summary
Project Debt Summary Project Amount Fixed/Floating? Rate San Jacinto $105 million Floating – LIBOR +6.75% 11.56% Peru – Senior Debt $22 million Fixed 7.00% Peru – Brookfield $25 million Fixed 8.75% Canoa $33 million Fixed 7.00% San Jose de Minas $5 million Fixed 7.95% Total $188 million 10.0% Blende
Slide 15: Inflation Commentary
Inflation Commentary Nicaragua contract is fixed – however numerous opportunities exist to re-invest cash flow and have net growth – ie well optimization program in 2023 Peru inflator is full US$ CPI ; 1.22% per year in the Dominican. First comment is that we are not seeing as much labour cost
Slide 16: Key Initiatives/Growth Projects
Key Initiatives/Growth Projects
Slide 17: Growing from Here
Growing from Here Country Project Size Investment EBITDA Pickup Timing - COD Peru Battery 1 Mwhr $500k $150k Q3-2023 Ecuador Additional Stream 1 -2 MWs $3.0 million $700k Q4-2023 Nicaragua Acid Jobs 0-5 MWs $2.0 million $0-$5.0 million Q3-2023 DR Canoa 2 25 MWs $30 million $4.5 million Q2-2024 Chusp
Slide 18: Canoa 2
Canoa 2 Polaris is aiming to effectively double the capacity at the operational Canoa project in Dominican Republic +25 MW ac Definitive Concession was signed December 2022 to expand capacity PPA signed on May 18th, 2023 15 Years – starting price at $82.35 with ~20% inflating at CPI for 5
Slide 19: 5 – Year EBITDA Growth Plan
5 – Year EBITDA Growth Plan Through acquisitions and plant optimization and expansion, Polaris intends to reach a targeted $100 mm in EBITDA over the next 5-years • EBITDA estimates do not include additional revenue from carbon credits • Nicaragua EBITDA would represent ~37%-42% of total Illustrat
Slide 20: Funding the Growth / Multiple Expansion
Funding the Growth / Multiple Expansion PIF PIF - Financing PIF – Future? Comps 6.5x 7.0x – 8.0x 8.5x – 10.0x 12x-14x Strategy – first and foremost – is to fund approximately 50% of the growth with internally generated cash flow External equity can be raised in incremental amounts and after orga
Slide 21: Funding the Growth
Funding the Growth Traditional project finance market is still strong Longer duration in nature so rates have not risen significantly Net Debt to 2023E EBITDA is approximately 2.7x This is very low given the highly contracted nature of our revenues Green Bond framework completed August 202
Slide 22: Carbon Credits
-_F _§ POLARIS ci NENA SEE UI
Slide 23: Price developments
& Price developments VCM Offset Benchmarks average, all but nature based — nature-based renewable energy POLARIS ReNewasts Carey Price developments 23
Slide 24: Carbon Credits - All Projects Summary
Carbon Credits - All Projects Summary Plant Fully Verified ~Annual CO2 Credits San Jacinto Yes 200,000 Canchayllo Yes 15,000 8 de Agosto Yes 65,000 Total 280,000 El Carmen Q1/23 20,000 Binary Q1/23 40,000 Vista Hermosa 1/2 Q1/23 20,000 Canoa 1 Q2/23 30,000 Canoa 2 Q1/24 30,000 Total 420,000 24
Slide 25: Appendix: Project Summaries
Appendix: Project Summaries
Slide 26: Nicaragua Geothermal Plant
-»POLARIS RENEWABLE ENERGY Nicaragua Geothermal Plant
Slide 27: Fact Sheet – San Jacinto
Fact Sheet – San Jacinto POWER PLANTS SAN JACINTO PROJECT INSTALLED CAPACITY 82 MW LOCATION CAPACITY FACTOR 95%+ The San Jacinto-Tizate PRODUCTION ~55-60 MW Geothermal plant is located in northwestern TRANSMISSION LINE ON PROPERTY Nicaragua, in the shire of San Jacinto, municipality DEVELOPMENT STAG
Slide 28: San Jacinto Project Overview
San Jacinto Project Overview 72 MW capacity turbines – both online since January 2013. 10 MW capacity Binary plant completed December 2022 Combined nameplate capacity of 82 MWs 13 production wells with productive capacity of approximately: 500 tph of steam and 1,600 tph of hot brine. 7
Slide 29: Peru Run of River Hydro Projects
Peru Run of River Hydro Projects
Slide 30: Fact Sheet – Canchayllo
Fact Sheet – Canchayllo POWER PLANTS CANCHAYLLO PROJECT INSTALLED CAPACITY 5 MW LOCATION CAPACITY FACTOR 60% - 70% Valley of the District PRODUCTION ~29-31 GWhr per year Canchayllo from the city of Jauja. The TRANSMISSION LINE 840 M / 69 kV Transmission Line is connected to the DEVELOPMENT STAGE OPE
Slide 31: Fact Sheet – 8 de Agosto
Fact Sheet – 8 de Agosto POWER PLANTS 8 DE AGOSTO INSTALLED CAPACITY 20 MW PROJECT LOCATION CAPACITY FACTOR 65% to 78% PRODUCTION 115 to 125 GWhr per year Tingo Maria, Huanuco Province TRANSMISSION LINE 67 KM / 60 kV connected to the DEVELOPMENT STAGE OPERATIONAL national grid PPA 20 YEARS - US $53.
Slide 32: Fact Sheet – El Carmen
Fact Sheet – El Carmen POWER PLANTS EL CARMEN INSTALLED CAPACITY 8 MW PROJECT CAPACITY FACTOR 55% to 70% LOCATION PRODUCTION 40 to 50 GWhr per year Tingo Maria, TRANSMISSION LINE 67 KM / 60KV Huanuco Province connecting to the DEVELOPMENT STAGE OPERATIONAL national grid PPA 20 YEARS - US$55.70/Mwhr
Slide 33: Dominican Republic Solar Project
Dominican Republic Solar Project
Slide 34: Fact Sheet – Canoa
El Carmen Fact Sheet – Canoa 1 POWER PLANTS CANOA I INSTALLED CAPACITY 25.0 MWAC PROJECT CAPACITY FACTOR 25-27% LOCATION PRODUCTION 55-60 GWhr per year Barahona Province, GEN-TIE LINE 3 KM / 69KV Dominican Republic connecting to the DEVELOPMENT STAGE OPERATIONAL national grid PPA 20 YEARS + 5-YEAR -
Slide 35: Panama Solar Project
>+POLARIS RENEWABLE ENERGY Panama Solar Project
Slide 36: Fact Sheet – Vista Hermosa I/II
Fact Sheet – Vista El Carmen Hermosa I/II POWER PLANTS VISTA HERMOSA 1/2 INSTALLED CAPACITY 10 MWAC PROJECT CAPACITY FACTOR 20-22% LOCATION PRODUCTION 18-20 GWhr per year GEN-TIE LINE Onsite Vista Hermosa, Cocle Province, Panama DEVELOPMENT STAGE Operational PPA No contracts at this stage COD Q1-202
Slide 37: Ecuador Run of River Hydro Project
Ecuador Run of River Hydro Project
Slide 38: Fact Sheet – San Jose de Minas
Fact Sheet – San Jose de Minas POWER PLANT Hidroelectric San Jose de Minas INSTALLED CAPACITY 6 MW PROJECT LOCATION CAPACITY FACTOR 75% PRODUCTION ~40 GWhr per year Canton Quito, TRANSMISSION LINE 67 KM / 60 kV Pichincha, Ecuador DEVELOPMENT STAGE OPERATIONAL PPA 8 years - US $78.10 / Mwhr COD MARCH
Slide 39: Ecuador – San Jose de Minas
Ecuador – San Jose de Minas Acquisition closed first week of September 2022 Once achieved will commence a small – brownfield expansion at the site – estimated to increase production from ~40,000 Mwhrs to 50,000 Mwhrs annually – estimated completion time of February 2024 – cost of ~$3.0 to $3.5 m
Slide 40: Appendix: Leadership Team Biographies
Appendix: Leadership Team Biographies
Slide 41: Strong Management Team
Strong Management Team Marc Murnaghan Anton Jelic Chief Executive Officer/Board Member Alexis Osorno Chief Financial Officer SVP Latin America Marc joined Polaris Infrastructure as CEO in May 2015. Anton joined Polaris Infrastructure in December 2018 and Alexis initially joined Polaris Infrastructur
Slide 42: Experienced Corporate & Regional Management
Experienced Corporate & Regional Management Michael Kosiancic Guzman Fernandez Denise M. Parada Executive Vice President, Project Finance Vice President, Corporate Development VP, Finance Transformation & Governance Michael joined Polaris in September 2020 as Executive Vice President, ProjectJane Fi
Slide 43: Experienced Corporate & Regional Management
Experienced Corporate & Regional Management Priscila Cortes Fernando Joffre Director, Project Development Alba Seisdedos Vice President, Finance Vice President, Taxation & Legal Affairs Fernando joined Polaris in June 2022. He is responsible for the Alba joined Polaris in November 2021 and is respon
Slide 44: Experienced Corporate & Regional Management
Experienced Corporate & Regional Management Leonel Poveda Johnny Bendaña Marcela Bascope Regional Operations & Maintenance Manager Regional Corporate HR Manager Regional Social & Environmental Sustainability Manager Johnny joined Polaris in July 2009 and is responsible for Marcela joined Polaris in
Slide 45: Experienced Corporate & Regional Management
Experienced Corporate & Regional Management Carlos Diaz Alonzo Allen Regional Financial Manager Regional Financial Controller Carlos joined Polaris in August 2010, at its subsidiary Alonzo joined Polaris in March 2003, at its subsidiary Polaris Energy Nicaragua, JaneS.A. Doeand has held various Pola
Slide 46: Experienced Board of Directors
Experienced Board of Directors Jaime Guillen Marcela Paredes de Vásquez Chairman Director Jane Doe Fluent in Spanish, Jaime is Managing Partner at Faros Jane Doe Marcela Paredes de Vásquez joined the Board of Polaris Infrastructure Partners LLC, an investment firm with Renewable Energy Inc. in June
Slide 47: Experienced Board of Directors
Experienced Board of Directors James Lawless Catherine Fagnan 1 Director Consultant to the Board Jane Doe Jane Doe James (Jim) has been a member of the Board of Directors Catherine Fagnan is Associate General Counsel at Green of Polaris Renewable Energy (previously Ram Power, Corp) Infrastructure Pa
Slide 48: Thank you
Renewable Energy. Today, Tomorrow and for Future Generations.TM Energía Renovable. Hoy, Mañana y para Generaciones futuras.™ ¡Thank you! 7 St Thomas St., Suite 606 Investor Relations Email: [email protected] Toronto, ON Canada 647-245-7199 Website: polarisrei.com M5S 2B7
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