KS ORKA Renewables Pte Ltd

Transcription

1 KS ORKA Renewables Pte Ltd FINANCING THE INCREMENTAL DEVELOPMENT MODEL M.R. Reading 1

2 Introduction of KS ORKA Incremental vs Traditional Development Model Advantages of Well Head Units Financing Program The Future of Geothermal for the Private Sector

3 KS Orka KS Orka designs, builds, owns and operates geothermal and waste heat projects. We aim to have at least 1,000MW of capacity under development and construction by end of Vertical Integration Strategic joint venture between Huger Orka, an Icelandic development company and Zhejiang Kaishan Compressor Company Ltd, a Chinese power plant equipment manufaturer, creating a vertically-integrated renewable power project developer, owner and operator. Focused Strategy Focused on the development of geothermal and waste heat projects where we can leverage on our commercial, technical, and market expertise and ability to provide low-cost financing. Globally Positioned Globally positioned with headquarters in Singapore and satellite offices in Budapest, Belgarde, Shanghai, Jakarta and Reykjavik. Top Calibre Team Highly experienced, international team who have participated in several of the most significant geothermal energy projects and power projects around the globe.

4 Shareholders Zhejiang Kaishan Compressor Company Ltd (Kaishan) KS Orka s largest shareholder, Kaishan, is a private enterprise listed on the Shenzhen Stock Exchange. Kaishan is the largest manufacturer of hammer drills in the global market, as well as the largest manufacturer of pneumatic tools in China. Kaishan is the largest manufacture of air compressors in Asia and ranks third globally. Integration of Kaishan s screw expander generators with an Organic Rankine Cycle (ORC) system represent how global leading technology is being applied to lowtemperature power generation. Hugar Orka ehf (Orka) Orka, an Icelandic company has the capacity to develop complex geothermal and other renewable power projects. Hugar Orka ehf (Iceland) Zhejiang Kaishan Compressor Company Ltd (China) Shenzhen Stock Exchange Symbol Zhejiang Kaishan Compressor Company Ltd (Hong Kong) Orka s management team completed the exploration and initial steam-field development of the 200MW Biliran Geothermal Power Project in the Philippines. Orka s core management team and alliance partners have developed and financed some of the largest and most complex geothermal and other power projects KS Orka Renewables Pte Ltd (Singapore)

5 International Operations Indonesia team currently includes 56 full time employees and contract staff. International team based in Singapore, Budapest, Belgrade, Shanghai and Reykjavik. Network of alliance partners with leading engineering companies. Active projects in Indonesia, Hungary, Serbia and Slovakia. 240MW Sorik Marapi Project under development with four wells drilled by March 2017 and two additional wells currently being drilled simultaneously. 30MW Sokoria Project acquired in January 2017; drilling works are underway. 70 MW Turawell CHP Project first phase is an advanced development close to Budapest in Hungary. KS ORKA is the majority owner and developer of the project which is planned to begin commissioning early May. In cooperation with the NIS oil and gas company on developing the first geothermal power plants in Serbia. Drilling works are expected to begin in KS Orka offices: Singapore, Budapest, Belgrade, Shanghai, Jakarta and Reykjavik

6 Active Projects Sorik Marapi Geothermal Power (SMGP) 240MW PPA USD 1.2Bn investment (forecasted) KS Orka owns 95% of the Project Transaction completed in August 2016 Currently two drilling rigs on site Completed 4 standard size wells by March 2017 Short term discharge was completed for two wells on the first well pad Construction of the third well pad ongoing

7 Active Projects Initial flow testing of first well SMA-101 of Sorik Marapi

8 Active Projects Sokoria Geothermal Indonesia (SGI) 30MW PPA USD 180M investment (forecasted) KS Orka owns 95% of the Project Transaction completed in January 2017 Currently in construction of access roads and first well-pad Target completion of civil works the end of March 2017 Drilling scheduled to start in April

9 Active Projects Construction of Access Road and Drilling Pad

10 Introduction of KS ORKA Incremental vs Traditional Development Model Advantages of Well Head Units Financing Program The Future of Geothermal for the Private Sector

11 Incremental vs. Traditional Development Model Traditional Centralized Unit Development Model Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Exploration Development Power Plant Procurement Operations Incremental Development Model Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Exploration Development Power Plant Procurement Operations

12 Traditional Development Model (40MW) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Preliminary Survey (2 Years) Exploration Works (2 Years) Project Financing (6 to 12 mos) Production Drilling (2 Years) Construction Works (2 Years) Survey Geology Geochemistry Civil (Roads and Pads) Exploration Drilling Well Testing Info Memo Resource Report EPC Contracts Drilling 20MW Well Testing Drilling 40MW Geophysics Resource Estimate Assessme nt Due Diligence Loan Approval Well Testing Power Plant Construction Exp Well Targeting Draw Down Steam Proven Under well head COD of 40MW

13 Incremental Development Model (40 MW) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Preliminary Survey (2 Years) Exploration Works (1.5 Years) Production Drilling and Construction Works Survey Civil Works Continuous Drilling Geology EX Drilling 20MW Wells 30MW Wells 40MW Wells Geochemistry Testing 10MW Plant 20MW Plant 30MW Plant 40MW Plant Geophysics Resource Estimate Asset Based Financing Exp Well Targeting Start Exploration Resource Confirmation COD 10MW COD 20MW COD 30MW COD 40MW

14 Introduction of KS ORKA Incremental vs Traditional Development Model Advantages of Well Head Units Financing Program The Future of Geothermal for the Private Sector

15 Well Head Units vs. Centralized Units Resource Utilization Technical Flexibility Construction Time Land Use Speed to Generation Financing Well Head Units WHUs can be spread over the concession area making it easier to utilize the entire geothermal resource WHUs can be designed to utilize varying inlet pressures WHUs can be customized to accommodate differing well characteristics (temp, pressure, chemistry) WHUs can be easily modified or potentially relocated to accommodate changes in resource over time Modular construction with limited installation at site Short lead times due to modular manufacturing Portable or permanent options Very limited steam gathering system WHUs have small footprint; can install on well-pad or small adjacent site WHUs can be developed incrementally as steam-field is still being developed, allowing for early power generation Incremental development model allows incremental financing Centralized Units Centralized units need an extensive steam gathering system; use of entire resource not practical Centralized units can only utilize narrow pressure range Centralized Unit can only accommodate specific range of characteristics; cannot handle complex resource with varying pressures and chemistry Centralized Units rely on steam mixing and make-up drilling Complicated on-site construction Long-lead times Inflexible, permanent construction Extensive, expensive steam gathering system required Centralized unit and steam gathering system requires extensive land acquisition Centralized Units can only be built once the steam-field has been substantially drilled Centralized units can only be financed once steam-field is substantially proven by drilling 30-50% or more of required production wells

16 Introduction of KS ORKA Incremental vs Traditional Development Model Advantages of Well Head Units Financing Program The Future of Geothermal for the Private Sector

17 Financing Program A financing approach to accommodate incremental development Although the size of the concession is sufficent to support a traditional project financing once the full amount of the concession has been realized, individual Wellhead power plant units units (WHUs) can be 5-20MW in size Traditional project financing of individual units is not efficient due to the long lead time and high cost of negotiating and documenting a limited recourse project financing facility Project financing of individual units would create complex intercreditor issues that would be very difficult, if not impossible, to successfully resolve without refinancing each time a new unit needs to be financed Project finance lenders, including local banks and some development banks are reluctant to finance initial drilling activities Finance drilling activities separately from power plant EPC Equity Only: Preliminary survey works, surface exploration Equity/Balance Sheet financing: Initial exploration costs financed by equity, including balance sheet debt Construction Facility: Power Plant EPC costs financed by traditional sources of construction financing, including supplier financing, export-import financing and commercial bank financing Long-Term Facility: Long term asset based financing for the Project will be provided under a Long Term Facility that will finance units incrementally as they achieve commercial operation

18 Traditional Financing Program Traditional financing strategy based on conventional power projects Pre-Exploration Exploration Power Proj Devlopment FC NTP Power Plant COD Surface Exploration 1 2 years Civil Works, Exploration Exp Drilling and Testing Proj Financing Process Construction & Production Drilling 1 2 years 6-12 months 24 months Operations years Equity Equity Equity Long-Term Project Financing Equity/Long Term Financing

19 Incremental Financing Program An Incremental financing strategy to match an incremental development plan Pre-Exploration Exploration Power Plant NTP Power Plant COD Surface Exploration Civil Works, Exploration, Drilling and Testing Power Plant Construction Operations 1 2 years 1 2 years 9 months years Equity Equity/Corp Debt Construction Financing Long-Term Project Financing

20 Financing Program Incremental Financing Plan Equity-only Financing General Pre-Development Costs - Surface Exploration - Permitting - Land Acquisition Tenor : 2 4 Years Civil Works Drilling and Testing NTP Construction COD Operations 1. Civil Works necessary for drilling - Well Pads - Access Roads - Water System 2. Drilling Costs - Rig - Materials - Supervision 1. Power Plant EPC 2. Additional Civil Works required for Power Plant 3. Supervision 4. Common Facilities 5. Financing Costs 1. Total Project Cost - General Development Costs - Civil Works - Drilling - Power Plant EPC - Common Facilities - Financing Costs Tenor : Years Tenor : 9 24 Months Tenor : Years

21 Financing Program Preliminary Exploration Works Equity-only Financing General Pre-Development Costs - Surface Exploration - Permitting - Land Acquisition Tenor : 2 4 Years Civil Works Drilling and Testing NTP Construction COD Operations 1. Civil Works necessary for drilling - Well Pads - Access Roads - Water System 2. Drilling Costs - Rig - Materials - Supervision 1. Power Plant EPC 2. Additional Civil Works required for Power Plant 3. Supervision 4. Common Facilities 5. Financing Costs 1. Total Project Cost - General Development Costs - Civil Works - Drilling - Power Plant EPC - Common Facilities - Financing Costs Tenor : Years Tenor : 9 24 Months Tenor : Years

22 Financing Program Exploration Equity-Only Financing 1. General Pre-Development Costs - Surface Exploration - Permitting - Land Acquisition Civil Work Drilling and Testing NTP Construction COD Operations 1. Civil Works necessary for drilling - Well Pads - Access Roads - Water System 2. Drilling Costs - Rig - Materials - Supervision 1. Power Plant EPC 2. Additional Civil Works required for Power Plant 3. Supervision 4. Common Facilities 5. Financing Costs 1. Total Project Cost - General Development Costs - Civil Works - Drilling - Power Plant EPC - Common Facilities - Financing Costs Tenor : Years Tenor : 9-24 Months Tenor : Years

23 Financing Program WHU Construction Financing Equity-Only Financing 1. General Pre-Development Costs - Surface Exploration - Permitting - Land Acquisition Civil Work Drilling and Testing NTP Construction COD Operations 1. Civil Works necessary for drilling - Well Pads - Access Roads - Water System 2. Drilling Costs - Rig - Materials - Supervision 1. Power Plant EPC 2. Additional Civil Works required for Power Plant 3. Supervision 4. Common Facilities 5. Financing Costs 1. Total Project Cost - General Development Costs - Civil Works - Drilling - Power Plant EPC - Common Facilities - Financing Costs Tenor : Years Tenor : 9-24 Months Tenor : Years

24 Financing Program Long Term Project Financing Equity-Only Financing 1. General Pre-Development Costs - Surface Exploration - Permitting - Land Acquisition Civil Work Drilling and Testing NTP Construction COD Operations 1. Civil Works necessary for drilling - Well Pads - Access Roads - Water System 2. Drilling Costs - Rig - Materials - Supervision 1. Power Plant EPC 2. Additional Civil Works required for Power Plant 3. Supervision 4. Common Facilities 5. Financing Costs 1. Total Project Cost - General Development Costs - Civil Works - Drilling - Power Plant EPC - Common Facilities - Financing Costs Tenor : Years Tenor : 9-24 Months Tenor : Years

25 Introduction of KS ORKA Incremental vs Traditional Development Model Advantages of Well Head (Incremental) Units Financing Program The Future of Geothermal for the Private Sector

26 The Future of Geothermal for the Private Sector Financing Flexibility Technical flexibility Portable and scalable Generate power quickly High availability Allows incremental development of large resources to meet rising demand Can use revenue to continue development More efficient resource use A wellhead ORC geothermal plant installed at Lightning Dock Geothermal Power Project, New Mexico, USA More efficient land use

27 Singapore: 58 Tras Street #02-01, , Singapore Shanghai: 11 F, No. 5 Lane 388 Da Duhe Rd., Putuo District, Shanghai, , China Jakarta: Recapital Building, 5th floor, Jl. Adityawarman Kav.55 Kebayoran Baru, Jakarta