Polaris Renewable Energy Inc. · TSX:PIF
Polaris Renewable Energy — Investor Presentation (November 2023)
47 slides from Polaris Renewable Energy's investor presentation, November 2023
Slide 1: Corporate Overview
Corporate Overview NOVEMBER 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 Dominican Republic and acquirer of renewable energy projects Nicaragua 25 MW 72 MW in Latin America. • 7 Plants currently in Operation Panama 10 M W Ecuador 6 MW Goal Create a mid-size, regional platform in Latin America. Continue to grow Per
Slide 5: Capital Markets Snapshot
Capital Markets Snapshot SHARES OUTSTANDING (1) DEBT (1) ANNUAL DIVIDEND 21.0 mm US$181 mm US$0.60 MARKET CAPITALIZATION (2) CASH ON HAND DIVIDEND YIELD US$205 mm US$46 mm 6.2% 2023E EBITDA(3) ENTERPRISE VALUE (4) EV / EBITDA MULTIPLE (3) ~US$59-$61 mm ~US$338 mm ~ 5.5x PRICE 2023E OPERATING CASH C$
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: Corporate Finance / Development Team - Toronto
Corporate Finance / Development Team - Toronto Fernando Marc Michael Anton Jelic Yumey Alba Joffre Denise Parada Murnaghan Kosiancic Chief Financial Fernandez Seisdedos Director, VP, Chief Executive VP. Officer Director, VP, Taxation & Project Sustainability & Executive Project Finance Legal Affairs
Slide 9: 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 10: 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 10
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 $100 million Floating – SOFR +7.01% 12.42% Peru – Senior Debt $19 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 $181 million 10.0% Blended
Slide 15: Key Initiatives/Growth Projects
Key Initiatives/Growth Projects
Slide 16: Growing from Here – Organic Projects
Growing from Here – Organic Projects Country Project Investment ~EBITDA Pickup COD Timing Peru Battery $500k $150k Q3-2023 Nicaragua Well Optimizations $1.5 million $2.0 million Q4-2023 Dominican Republic Canoa Optimization $5.0 million ~$2.0 million Q2-2024 Canoa + Battery (1) $10.0 million $1.6 to
Slide 17: 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 18: Capital Allocation Approach / NCIB
Capital Allocation Approach / NCIB Maintain current dividend and debt repayment schedule as is for 2023 and 2024 Prioritize capital investments that generate greater than a 14%/15% IRR – all Organic projects meet this hurdle From now and through 2024, employ NCIB with cash on hand and excess c
Slide 19: Capital Allocation Approach / NCIB – Next 12 Months
Capital Allocation Approach / NCIB – Next 12 Months Estimated 12-month FCF * $27 - $29 million Less: Dividend $12.5 million Identified CAPEX $11.O million “Excess” Cash Available $1-$2 million Current Cash @ Parent Level $20 million Less: Minimum Cash Balance $10 million Cash Available for NCIB / Ot
Slide 20: Targeting Debt Refinancing
Targeting Debt Refinancing San Jacinto Debt cannot be refinanced until January 2025 Will plan to target a Green Bond financing in Q4-2024 Repay San Jacinto Loan - ~$90 million Plus Funds for expansion Target total debt of $200 million to $250 million – ie 3.0x to 4.0x Debt to EBITDA Free
Slide 21: Carbon Credits
-_F _§ POLARIS ci NENA SEE UI
Slide 22: 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 Q4/23 20,000 Binary Q4/23 40,000 Vista Hermosa 1/2 Q2/24 10,000 San Jose de Minas Q2/24 15,000 Canoa 1 Q2/24 30,000 Canoa 2 Q4/2
Slide 23: Price developments – Carbon Credits
Price developments – Carbon Credits Interestingly the prices of CO2 credits very much reflect the overall decline in interest in the sector Should be a leading barometer in reverse 23
Slide 24: Appendix: Project Summaries
Appendix: Project Summaries
Slide 25: Nicaragua Geothermal Plant
-»POLARIS RENEWABLE ENERGY Nicaragua Geothermal Plant
Slide 26: 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 ~65 MW Geothermal plant is located in northwestern TRANSMISSION LINE ON PROPERTY Nicaragua, in the shire of San Jacinto, municipality DEVELOPMENT STAGE O
Slide 27: 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: 400 tph of steam and 1,600 tph of hot brine. 7
Slide 28: Peru Run of River Hydro Projects
Peru Run of River Hydro Projects
Slide 29: 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 30: 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 135 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 31: 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 32: Dominican Republic Solar Project
Dominican Republic Solar Project
Slide 33: Fact Sheet – Canoa
El Carmen Fact Sheet – Canoa 1 POWER PLANTS CANOA I INSTALLED CAPACITY 25.0 MWAC / 32.6 DC MW PROJECT CAPACITY FACTOR 20.9% 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 YEAR
Slide 34: Panama Solar Project
>+POLARIS RENEWABLE ENERGY Panama Solar Project
Slide 35: Fact Sheet – Vista Hermosa
Fact Sheet – Vista El Carmen Hermosa POWER PLANTS VISTA HERMOSA 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 Q1-2023 35
Slide 36: Ecuador Run of River Hydro Project
Ecuador Run of River Hydro Project
Slide 37: Fact Sheet – San Jose de Minas
Fact Sheet – San Jose de Minas POWER PLANT Hydroelectric San Jose de Minas INSTALLED CAPACITY 6 MW PROJECT LOCATION CAPACITY FACTOR 75% PRODUCTION ~40 to 50 GWhr per year Canton Quito, TRANSMISSION LINE 67 KM / 60 kV Pichincha, Ecuador DEVELOPMENT STAGE OPERATIONAL PPA 8 years - US $78.10 / Mwhr COD
Slide 38: 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 39: Appendix: Leadership Team Biographies
Appendix: Leadership Team Biographies
Slide 40: 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 Renewable Energy Inc. as CEO in May Anton joined Polaris Renewable Energy Inc. in December Alexis initially joined Polaris Renewable Ener
Slide 41: 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 Guzman joined Polaris as VP, Co
Slide 42: Experienced Corporate & Regional Management
Experienced Corporate & Regional Management Yumey Fernandez Fernando Joffre Director, Project Development Alba Seisdedos Director, Finance VP, Taxation & Legal Affairs Yumey is responsible for leading all aspects of Financial Fernando joined Polaris in June 2022. He is responsible for the Alba joine
Slide 43: 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 Leonel joined Polaris in May of 2008. He currently holds Johnny joined Polaris in Ju
Slide 44: 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 45: Experienced Board of Directors
Experienced Board of Directors Jaime Guillen Marcela Paredes de Vásquez Chairman James Lawless Director Director Jane Doe Jane Doe Fluent in Spanish, Jaime is Managing Partner at Faros Jane Doe Marcela Paredes de Vásquez joined the Board of Polaris James (Jim) has been a member of the Board of Direc
Slide 46: Experienced Board of Directors
Experienced Board of Directors Catherine Fagnan Adarsh Mehta Director Director Jane Doe Jane Doe Catherine Fagnan is Associate General Counsel at Green Adarsh Mehta is VP of Business Development for Jenner Infrastructure Partners where she leads the legal group Renewable Consulting, where she provid
Slide 47: 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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