INDONESIAN. Exploration & Development. Indonesian Geothermal. Opportunities. March Asia Pacific Edition EXPRESSIONS OF INTEREST.

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1 Invitation for EXPRESSIONS OF INTEREST Exploration & Development Opportunities - Asia Pacific Edition INDONESIAN TM 1

2 This presentation has been prepared by Pty Limited (ABN: ) trading as and hereafter referred to as for the sole purpose of introducing interested parties to the potential benefits which may be realised in the Indonesian geothermal sector. The information contained in this presentation is not investment or financial advice and is not intended to be used as the basis for making any investment decisions. The presentation has been prepared without taking into account the corporate objectives, financial situation or particular needs of any particular person, company, or organisation. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, or to the opinions and conclusions contained in this presentation. To the maximum extent permitted by law,, its partners, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this presentation nor is any obligation assumed to update such information. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies. The information in this presentation is an overview and does not contain all the information necessary for making any corporate, strategy, financial or any other decision. Before making any decisions, you should consider, with the assistance of your own legal, tax, business and/or financial advisers, whether a decision is appropriate in light of your particular investment needs, objectives and financial circumstances. Past performance is no guarantee of future performance. Unless otherwise stated, all dollars or $ refer to Australian Dollars. Technology development and commercialisation relies on the interpretation of complex and often uncertain data and information which cannot be relied upon to lead to a successful outcome in any particular case. Geothermal resources and technology development and commercialisation is inherently uncertain and involves potentially significant risk of failure. All information regarding prospective market sizes and other information, is given in the light of this caution. This presentation contains a number of forward looking statements, therefore recipients of this presentation should conduct their own investigation, evaluation and analysis of the data and information described in this document. In particular any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and you should satisfy yourself in relation to such matters. The distribution of this document in various jurisdictions may be restricted by law. Any recipient of this must seek advice on and observe any such restrictions. IMPORTANT DISCLOSURES, or its directors, officers, staff and their associates may hold shares or other relevant interest in the securities of entities related directly or indirectly to any proposed or possible transaction as may be described or covered by this presentation. and its advisers may earn brokerage, fees, commissions, other benefits or advantages as a result of a transaction arising from any research, opinions, publications or solicitation of potential investors, partners or clients. may have provided corporate advice within the past and may continue to provide corporate advice to companies or related parties concerned, for which may have received gross fees and /or continue to receive fees. holds investments directly and indirectly in a range of public and private entities and has relationships with a number of specialised brokers, international banks and other financial institutions, however is not itself a broker and is not authorised to directly deal in securities. operates within Australian Securities and Investment Commission Class Order CO/273 Business introduction or matching services which provides various exemptions from the obligations and requirements of Paragraphs 283GA(1)(a), 741(1)(a), 992B(1)(a) and 1020F(1)(a) of the Corporations Act 2001 (Cth). The information contained in this presentation is for general information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. Pty Limited All Rights Reserved. 2

3 With a population of just over 240 million spread across more than 17,000 islands, Indonesia represents a substantial and growing energy market. The government has set ambitious targets for the installation of significant additional power generation capacity, consisting of both fossil fuel and renewable energy sources, particularly geothermal. In addition to the 7 major currently operating geothermal projects in Indonesia, the increasingly supportive regulatory regime is encouraging the rapid construction of additional geothermal capacity. The geothermal development pipeline consists of projects at all stages of development. Operating Projects Distribution of Projects Project Developer Year Online MW Darajat I III Chevron Salak I VI Chevron Dieng I Geo Dipa Energi Sibayak Pertamina Pengalengan Pertamina Lahendong I& II Pertamina 2001, Lahendong III PLN Kamojang PLN Source: Adapted by 2010, from proprietary and EER research. Planned Projects Facts Operating Planned Area of Geothermal Project Tenders Project Developer Year Online MW Wayang Windhu II Pertamina Lahendong IV VI Pertamina Dieng II Geo Dipa Panas Bumi ITOCHU Sumatra Jawa Pertamina Darajat IV Chevron Patuha Geo Dipa Energi Ulu Belu Pertamina TBD TBD Installed geothermal capacity Geothermal target by 2025 Geothermal resources (conservative) Geothermal resources (optimistic) Geothermal development cost quartile Geothermal resource quality 1,286 MW 9,500 MW 10,000 MW 27,000 MW quadrant 1 (lowest) high temperature The next wave of geothermal development in Indonesia is being led by ambitious Independent Power Producers (IPP s). These project developers are keen to take advantage of the recently increased geothermal tariff and the attractive CDM opportunities. Given Indonesia arguably hosts the highest quality, low cost geothermal resources in the world, interest and investment in the Indonesian geothermal sector is expected to intensify expeditiously. 3

4 The Advantage As part of the Indonesian Governments Crash Program to install an additional 10,000 MW by 2011 and a similar capacity commencing in 2014, there is a sense of immediate urgency for increasing power generation capacity. To accelerate the development of geothermal energy in Indonesia, the government has implemented a raft of measures including VAT-concessions for drilling equipment and subsidies. Of greatest significance, the government has legislated the state-run power utility Perusahaan Listrik Negara (PLN) to increase the geothermal tariff available to Independent power producers (IPP s) from $US71 to US$97 per MW. Key Competitive Advantages High temperature geothermal resources Large geothermal development pipeline Capable development partners Attractive project capex profiles Substantial CDM opportunities Competitive geothermal tariff VAT concessions World-class geothermal opportunities A 100MW Indonesian geothermal power plant project, has the potential to generate up to US$10 million per annum, from the sale of CER s generated through CDM projects. Sumbing Volcano. Java, Indonesia CER - Certified Emissions Reductions CDM - Clean Development Mechanism (Kyoto Protocol) 4

5 Estimates by numerous institutions, including the U.S. Department of Energy (DOE), International Energy Agency (IEA), International Geothermal Association (IGA) and the Government of Indonesia have collectively determined the conventional geothermal potential of Indonesia to be approximately 27,000 MW. Conventional Geothermal Resource Potential 40,000 Indonesia s conventional (hydrothermal) geothermal resources are amongst the most significant in the world and are only behind the United States, which hosts vast geothermal resources (concentrated largely in the western states of California and Nevada). The increased geothermal activity in Indonesia is expected to further increase resource estimates. 35,000 Hydrothermal Resource (Optimistic) Hydrothermal Resource (Conservative) Hydrothermal MW Potential 30,000 25,000 20,000 15,000 10,000 5,000 0 Source: Adapted by 2010, from proprietary and EER research. Geothermal resource potential of 27,000 megawatts 5

6 Indonesian geothermal resources are characterised by high temperature and shallow reservoirs with high flowrates, resulting in highly productive geothermal reservoirs. The high temperature Indonesian geothermal projects are often suitable for flash cycle (either single, dual or hybrid) based power generation systems which are exceptionally cost competitive, Actual & Forecast Geothermal (US$/MW e ) largely due to the large turbine capacities often exceeding 50 megawatts. The power cycle cost efficiencies, high temperature resouces and the relatively low drilling costs for shallow wells, combine to make Indonesian geothermal development amongst the most competitive in the world to develop. $5,785,000 $6,195,510 $5,274,321 $3,751,000 $4,018,000 $2,400,000 $2,444,519 $2,610,000 $1,500,000 $1,709,000 $1,873,000 $2,000,000 Sumatera (Coal) Wayang Windu II Patuha Lahendon IV Ac vated Logic Client A Ac vated Logic Client B Indonesia Average US (Lowerquar le) Tongonan (Philippines) US (topquar le) Australia (HSA) Australia (EGS) Source: 2010, from various proprietary and public domain data. Indonesian geothermal projects are highly cost competitive 6

7 Installed geothermal capacity in Indonesia is forecast to increase rapidly from the current 1,286 megawatts to more than double, with current estimates at approximately 2,700 megawatts by Indonesia s high quality geothermal resources, relatively low developments costs and the recently announced increased geothermal tariff are pivotal drivers behind major Indonesian geothermal development pipeline. The Indonesian geothermal development pipeline consists of both greenfields developments and expansion of existing geothermal projects. 5,000 4,500 Markets with existing geothermal capacity driving new global growth Emerging Geothermal Markets Megawatts (MW) 4,000 3,500 3,000 2,500 2,000 1,500 Operating Announced Pipeline 1, Source: Adapted by 2010, from proprietary and EER research. Indonesian geothermal pipeline exceeds 2,000 megawatts 7

8 The Opportunity represents numerous geothermal clients across the Asia Pacific, with a specific focus on Indonesia. s Indonesian clients are active across the geothermal development value chain, ranging from projects at the early pre-survey stage, through to established, thirdparty verified resources on the verge of large scale, development drilling. Our extensive and unique reach into the Indonesian geothermal sector, provides us with the unique capability to offer companies across the Asia Pacific with a diverse range of geothermal opportunities in Indonesia. Our Indonesian geothermal clients are looking for foreign partners for their respective geothermal projects which are interested in: Jointly bidding for geothermal working areas (GWA s) Conducting pre-feasibility studies for geothermal projects Conducting FEED, development drilling & power plant construction Source: Adapted by 2010, from IJT s geothermal clients are actively exploring and developing geothermal projects in Indonesia targeting 3,000 MW s of installed capacity, representing more than 10% of Indonesia s total geothermal potential. All of these geothermal projects are seeking technical and financial partners to accelerate the commercialisation of these exciting projects. Available Geothermal Projects - By Province 01. Nanggroe Aceh Darussalam 02. North Sumatera 03. Riau 04. Riau Archipelago 05. West Sumatera 06. Jambi 07. Bengkulu 08. South Sumatera 09. Bangka Belitung 10. Lampung 11. Banten 12. Jakarta 13. West Java # 14. Central Java 15. Yogyakarta 16. East Java 17. Bali 18. West Nusatenggara 19. East Nusatenggara 20. West Kalimantan 21. Central Kalimantan 22. East Kalimantan 23. South Kalimantan 24. North Sulawesi 25. Gorontalo 26. West Sulawesi 27. Central Sulawesi 28. South Sulawesi 29. Southeast Sulawesi 30. North Maluku 31. Maluku 32. West Papua 33. East Papua # Including Banten province Provinces in red indicate the current availability of geothermal project opportunities, by. 8

9 In addition to the world-class geothermal resources found throughout Indonesia, the Alliance has access to all the key prospective geothermal regions around the globe. The members of the Alliance conduct detailed research into they key geothermal markets on behalf of private clients, as well as more general industry and corporate research. A range of country specific geothermal reports are available by request. We have developed an extensive network across the geothermal value chain over many years, and have a wealth of knowledge and experience to share. Our experience spans the entire geothermal industry, encompassing the vast diversity of projects from early stage pre-feasibility, through to corporate finance for commercial scale development projects. We have a range of opportunities if you are looking at building or diversifying your geothermal portfolio internationally. Conventional Geothermal Regions with proven conventional geothermal resources. Source: Adapted by 2010, from proprietary and EER research. Geothermal distribution Conventional geothermal resources are typically found in regions proximal to continental plate margins. These areas are often characterised by historic or current volcanic activity. Available project locations Australia Chile Europe (various) Iceland Japan Kenya Papua New Guinea Turkey United States & other selected regions. 9

10 CAPABILITY STATEMENT Discover the key value creation strategies utilised by the Alliance (GGA), and explore the list of our recent geothermal transactions. Request a copy of the Alliance, by contacting Activated Logic, or available for download by clicking here. Download Now If you are serious about developing a competitive geothermal project portfolio; - speak with us to find out, how the Global can activate and add value to your geothermal assets. Your Geothermal Financial Partner global geothermal alliance TM 10

11 Geothermal Service Offering Research Services Benchmark exploration, drilling and plant costs Geothermal sector & technology research Market, grant and pricing research Identification of suitable project & offtake partners Identification of potential investors and/or lenders Strategy Services Financing & power offtake strategies Develop operational & corporate strategies Determine optimal financial structure Determine optimal ownership structure Evaluation of acquisition opportunities Communication Services Prospectus & IM development Corporate partner negotiations Promotional project collateral Investor roadshows & dataroom Annual reports & corporate literature Investment Services Initial public offerings & sub-underwriting Project assessment & valuations Merger & acquisition evaluation Investor roadshows & engagement Identification of strategic investments Financial Services Financing strategies & capital raisings Debt syndication & bookbuild Identification of financing options Due-diligence & project valuation Mergers, acquisitions & asset disposals - Geothermal Commerciality Assessment Matrix TM Value Added Services Research Strategy Communication Investment Finance Business as Usual Base Case Scenario Reservoir Volume Reservoir Temperature Reservoir Flow Rate Capacity Power Cycle Technology PHASE 1 Early Stage Exploration Proximity to Infrastructure Source: AL-GCAM TM, developed by, Value Creation Process Source:, PHASE 2 Drilling & Feasibility Assessment TECHNICAL DRIVERS High value Markets COMMERCIAL DRIVERS PHASE 3 Design & Construction Activities Base case scenario Project Integration Value Creation Business as usual 11

12 For a confidential discussion to explore and discuss these geothermal opportunities, contact today. Your Geothermal Financial Partner Islandsbanki Sustainable Energy Team Kirkjusandi IS-155 Reykjavik, Iceland Tel: For more information: energy@islandsbanki.is global geothermal alliance Sustainable Energy Team PO Box 889, Sanctuary Cover Queensland, 4209, Australia Tel: For more information: energy@activatedlogic.com TM With a large proportion of the world s conventional geothermal resources, geothermal experts from around the world will descend on Bali - Indonesia in April, for the 2010 World Geothermal Congress. We look forward to seeing you in Bali. Alliance, exhibiting at World Geothermal Congress (Bali), April, Australian Enquiries LOGIC or ( ) International Enquiries Direct Mr. Bahay Ozcakmak Mob: +61 (0) bahayo@activatedlogic.com Alliance, Geothermal Financing Breakfast (AGEC, Nov 2009). 12