Actis Energy:Electricity infrastructure investing across the emerging markets May 2014 - UK-Cameroon Trade & Investment Forum

The positive power of capital 2

Actis: Emerging markets specialist

Electricity – Generation, Transmission and Distribution

Private Equity

Over $5bn raised/invested over 10 years

Actis Energy 2: US$750m

(2009)

Real estate(sub-Saharan Africa

only)Over $500m

raised/invested over 10 years

Brazil

China

UK

South Africa

India

Egypt

Singapore

KenyaNigeria

• Actis is a private equity firm with a unique heritage and a long standing knowledge of the emerging markets

• Actis became independent in 2004 from CDC1, a development fund created in 1948, with whom it continues to have a close relationship

• Actis invests in three asset classes: Electricity, Private Equity and Real Estate

60 years experience investing in the emerging markets

Actis Energy 3: ~US$1bn (2013)

1 - CDC is UK’s DFI, similar to Proparco of France

Actis Energy 1: US$750m

(2002)

Office locations

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Actis Energy: A global footprint in electricity distribution and generation

London

Mumbai

1. Capital deployed in Fund 1 and Fund 2 at 30 September 20122. Represents approximately 2.9m connection points

San José

$1.13bn¹Capital

Deployed

19Countries in

which energy investments transacted

>7000Employees in

the Actis electricity

sector

9540MWGenerating Capacity

(Funds 1 and 2)

São Paulo

Countries in which the Actis Energy Team has had, or currently has, presenceActis Energy Team offices

Electricity customers

served2

15m

Actis has invested in over 40 energy investments in the last ten years

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Actis Energy: experience by sector

Transmission & Distribution Networks with 2.9m connections, serving 15m

customers

2.2 GW Thermal Generation

330MW Hydro Generation

• Cote D’Ivoire: 288MW Azito plant in operation, with an additional 139MW expansion in construction

• Tanzania: 180MW Ubungo power plant in operation, with Songas gas processing facility, 225km gas pipeline

• Kenya: 74MW Tsavo plant in operation

• India: 916MW gas fired plant, with 1600MW under development. 540MW of thermal plant in construction.

• India: 330MW hydro plant in construction, currently developing 370MW

• Uganda: ~600,000 connections, connecting 50,000 customers annually. 25,000km of MV and LV network

• Guatemala: 1.5m connections, connecting 25,000 customers annually. Network consists of 30,000 km of LV lines and 34,000 of MV lines

• Morocco*: 1.0m connections covering the three cities of Rabat, Tetouan and Tanger, connecting 25,000 customers annually

457 MW Renewable Generation

• South Africa: 100MW solar, 138MW wind farm

• Honduras: 102MW wind farm

• Costa Rica: 73MW wind farm

• Nicaragua: 44MW wind farm

* Morocco transaction is pending completion

Actis has also previously:

• Bolivia: Owned and operated a 203MW hydro plant in Bolivia and completed 17.5MW expansion, via Globeleq

• Peru: Held minotiry equity interest in energy company Edegel, with 1015MW of hydro capacity

• Panama: owned a 50% interest in a 300MW hydro plant in Fortuna

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Actis Energy: Investments in Africa

• Actis currently has over 540MW of power projects in operations and 380 MW in construction

• Actis also owns Umeme, Uganda’s national distribution company, and recently completed a transaction earlier this year to acquire two integrated utility companies in Morocco

Distribution Generation Previous investment

Morocco: Amendis & Redal (100% ownership)

• Investment made in 2013 (consents underway)

• 3 Distribution concessions

• 3,000,000 customers

Cote d’Ivoire: Azito (77% ownership)

• Increase in shareholding completed in 2010

• 288MW Gas generation plant

• 139MW Gas expansion project underway

• Largest gas fired plant in West Africa, generating more than a third of country’s electricity supplySouth Africa: REPP (50.1%

ownership)

• Investment made in 2012

• 238MW wind and solar plants

• Currently under construction

Tanzania: Songas (60% ownership)

• Investment made in 2003

• 180MW gas generation

• Gas processing facility (0.1 TCF), a 225 km sub-sea and onshore gas pipeline, and the Ubungo power station, which currently supplies a third of Tanzania's electricity needs, the largest supplier in the country

Kenya: Tsavo (30% ownership)

• Investment made in 2000

• 74MW HFO generation

• Kenya’s first IPP

Uganda: Umeme (100% ownership until 2012, 60% ownership since 2012 IPO)

• Investment made in 2005

• Distribution company

• 3,000,000 customers

Egypt: Sidi Krir (100% ownership)

• 687MW gas fired IPP

South Africa: Kelvin (100% ownership)

• 600MW Coal

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Actis Energy: Partnerships in Africa

Distribution Generation Previous investment

Morocco: Amendis & Redal (100% ownership)

• Concession agreement with Municipalities of Rabat, Tanger and Tetouan

Cote d’Ivoire: Azito (77% ownership)

• 24 –year original concession agreement from 1998 plus concession extension of 20 year commencing at COD of expansion (2015 )with the Ministry of Energy and Ministry of Finance

• Raised debt of $345m for expansion project (IFC, Proparco, FMO, EAIF, DEG, BIO, BOAD)

South Africa: REPP (50.1% ownership)

• 20-year PPA with Eskom; Implemntation Agreement with Department of Energy

• Raised debt of $416m, (Absa, DBSA, Liberty Group Ltd., Future Growth Asset Management, SANLAM)

Tanzania: Songas (60% ownership)

• 20-year PPA with Tanesco

• Fuel Supply Agreement with TPDC

• IA with the Government of Tanzania

• Raised debt of $156m (IDA, EIB) and assumed a further $41m of existing debt (SIDA, IDA)

Kenya: Tsavo (30% ownership)

• 20-year PPA with KPLC

• Fuel Supply Agreement with CALTEX

• Raised debt of $70m (IFC, DEG, CDC)

Uganda: Umeme (60% ownership)

• Concession agreement with the Ministry of Finance

• Tariff setting with the ERA

• PSA with UETCL, Government transmission company

Egypt: Sidi Krir (100% ownership)

• PPA with Egyptian Energy Holding Co.

• Fuel Supply Agreement with Egyptian Natural Gas Company

South Africa: Kelvin (100% ownership)

• PPA with City Power Johannesburg

• Actis has a history of working closely in collaboration with the host governments of the countries where our investments are made

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Actis Energy Distribution: Umeme case study

Actis took over the ownership of Umeme, the national monopoly electricity distribution company of Uganda, following a privatisation process in 2005. In a few years, Actis was able to transform the business:

Customer Service

Considerable investments in technologies have been made:

• 17,000 pre-payment meters have been installed to date, with a plan to roll out universal pre-payment, increasing to 40,000 by 2013 end

• Mobile money payment options, SMS and e-billing have improved collection rates from ~70% in 2005 to 94% in 2012. 70% of revenue is collected via e-billing.

• Automatic meter readings are operational for 2,000 customers and are being rolled out to an additional 14,000 customers by 2014

• Lifeline tariff introduced for low consumption consumers

• Toll-free customer service number launched

Investment

• Invested over $166m in the network

• Raised first external debt with US$25 million IFC facility in 2009 and currently raising $170m in 2013

• In 2013, $54m will be invested into the network

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Staff development

• 100% of employees were transitioned to Umeme as part of the privatisation process

• A total of 971 training days have been registered between January to May 2013. Training includes technical e.g. Systems Operating Regulations (SOR), Open Integrated Customer System (OICS), safety, environmental and leadership

• New training centre is under construction, opening planned for Q1 2014

• Performance based culture cultivated, with annual performance bonuses for the year 2012 linked to individual and department, district performance

• Share ownership as part of the November 2012 IPO, all employees received shares in Umeme

Actis Energy Distribution: Umeme case study

Improved safety

•Embedded safety culture for employees, contractors and the public substantially reducing injuries over the past few years

•New programs implemented include extensive school education programmes and a toll-free 24-hour safety helpline

• prompt response of the field teams on the ground (improved response time from half a day in 2005 to current average of 20 minutes)

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Actis Energy Distribution: Umeme case study

Expansion of network

Increased customer connections from 292,000 to 513,000

• 55,000 new customers added in 2012, a 12% growth from 2011

• Average connection times reduced from 14 days in 2010 to 7 days in 2012

• New billing system commissioned in 2009

Loss Reduction

Reduced losses by 14% over the past 7 years

• Investment in network to address technical losses (including ariel bundle conductors, bulk metering, new substations, capacitor banks)

• Automated Meter Reading system for industrial customers

• Prepayment meters for all new domestic customers

• Improvement in revenue management cycle

• Patrols and public sensitization

• 2013 target is 23.5%

• YTD SAIDI and CAIDI figures:

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Actis Energy Distribution: Umeme case study

• Umeme launched an IPO (40% stake) in 2012 in the Uganda Stock Exchange – and was the first cross listing from Uganda to Kenya

• Shares were oversubscribed

• Diversified shareholding with:

o National retirement fund

o International Finance Corporation

o Other institutions

o All 1,300 employees

o More than 5,000 small shareholders (via a direct access program for subscribers

o Dividends: 5% payout ratio

o Continued operational performance has resulted in increased share price of 350USh/share today

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Actis Value Creation

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What Actis brings to the electricity sector of Cameroon

• Thought leadership: Actis has received several awards for its pioneering work in the electricity sector in Africa and continues to help shape country sector planning and set best practice standards

Azito Expansion (Cote d’Ivoire): awarded “Power Deal of the Year” by the

Infrastructure Journal and “African Power Deal of the Year” by Project Finance

International

Umeme (Uganda): finalist for the ‘Sustainable Investment of the Year’ for the ‘FT/IFC Sustainable Finance Awards in 2013

Songas (Tanzania): awarded the Tanzania Frost and Sullivan Technology Leadership Award for best practice, plant reliability and overall project success.

Actis’ vision is to be the Government’s partner of choice for distribution and generation projects, providing safe, reliable, and affordable electricity in Cameroon

• Deep sector knowledge: The Actis network consists of power project developers, engineers, environmental and safety experts. Actis believes in working closely with sector stakeholders including the Government, regions, municipalities and ARSEL to share this expertise and enable training opportunities across the network

• Relationship with international institutions: Actis has considerable experience working with financing institutions and will be able to assist the sector with sustainable approaches to financing solutions

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1. Continuity of Service

• Focus on customer service, no disruptions to existing service during transition

• Prioritise safety of the employees , contractors and the public

2. Investment • Investment into critical network infrastructure

• Equity contribution

• Mobilise additional funding via strong relationships with lenders and multilateral institutions

3. Quality of Service

• Focus on loss reduction, unserved energy, new connections

• Best practice sharing and access to technical expertise across the Actis portfolio

2

4. Employment • Continuity of employment rights

• Invest in training and development programs

• Empower local management teams

5. Corporate Governance

• Establish local boards with sub-committees

• Develop partnerships with stakeholders (regulators, local communities)

• Focus on international and national environmental standards

Actis vision for the business

Actis’ investment strategy is based on identifying, supporting and strengthening businesses with high growth potential to create long term value

Actis Energy:Electricity infrastructure investing across the emerging markets May 2014 - UK-Cameroon Trade & Investment Forum