ADB Climate

PPP Fund:

An Overview

May 2013 strictly private & confidential

CONFIDENTIAL

DisclaimerThis document has been prepared to provide prospective investors with the opportunity to determine their preliminary interest regarding a product (“product”) that is being prepared by the Asian Development Bank (“ADB“) and may not be used or reproduced for any other purpose. This Program received ADB Board approval on February 15, 2012.This document is for informational purposes only and all information contained herein is subject to revision and completion. This document does not constitute or form part of an offer to issue or sell, or of a solicitation of an offer to subscribe or buy, any securities or other financial instruments, nor does it constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. Any such offer will be made only by means of the product’s confidential private placement memorandum or such other offering documents as may be delivered by ADB to prospective investors and is subject to the terms and conditions contained therein and in the limited partnership agreement of the product. The information set forth herein does not purport to be complete. In addition, this document does not constitute nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any investment contract. Please note that the views, analyses and opinions reflected herein unless expressly stated otherwise reflect the perspective of the deal team and do not necessarily state or reflect the views of ADB. No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained herein. No reliance may be placed for any purpose on the information and opinions contained in this document or their accuracy or completeness and nothing contained herein shall be relied upon as a promise or representation whether as to past or future performance. Certain information in this document has been derived from materials furnished by outside sources. ADB assumes no responsibility for independent verification of such information and has relied on such information being complete and accurate in all material respects. Nothing contained herein should be construed as legal, business or tax advice. This document contains confidential information and the recipient hereof agrees to maintain the confidentiality of such information. This document is intended solely for the information of the person to whom it has been delivered. Distribution of this information to any person other than the person to whom it has been originally delivered and to the advisers of such person who are also subject to a duty of confidentiality is unauthorized, and any reproduction or transmission of these materials, in whole or in part, or the divulgence of any of its contents to third parties, without the prior consent of ADB, is prohibited. The distribution of this document may be restricted in certain jurisdictions. The information herein is for general guidance only, and it is the responsibility of any person or persons in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. This document is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. In particular this document is not intended for distribution in the United States or for the account of U.S. persons (as defined in Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”)), except to persons who are both “qualified purchasers” (as defined in Section 2(a)(51) of the United States Investment Company Act of 1940, as amended (the “Investment Company Act”)) and “accredited investors” (as defined in Rule 501(a) under the Securities Act).

2

Climate Finance Market

CONFIDENTIAL

MDBs

Sustainable investing is an increasingly mainstream area that will impact MDB’s positioning in the market

Fina

ncia

l Ret

urns

Development Impact / Sustainable Investing_

_

+

+

SRI Players

Private Sector Investors

Partnership Potential

There is significant partnership potential with institutions that have common goals and complementary capabilities

Current space

Trends

Reputation + Sustainability

Drivers

Note: For illustrative purposes. Several sources were consulted but exact position/proportion of shaded areas could vary

Call for all MDBs

4

CONFIDENTIAL

Investment space and risks

Infrastructure

Technology

EnvironmentResourceEfficiency

Renewable Energy

Nature base assets

Biomass

Clean Fuels

GreenReal Estate

Transportation Waste-Energy

Batteries

Clean Transport

CombinedHeat & Power

ComponentManufacturing

Smart-grid

EnvironmentalRemediation

Landfill Gas

Lighting

SustainableAgriculture

Waste-HeatRecovery

AdvancedMaterials

ForestryFisheries

WindSolarHydro

Geothermal

CSP/Desalination

Water

Recycling Waste water

5

CONFIDENTIAL

Market: Growth potential/upside particularly for those who can address current bottlenecks

CurrentMkt Size

US 120 bn*

Investors interest inenvironmental finance

investmentsUS 620 bn*

Yearly investment needs in environmental finance

US 780 bn*

* Estimates based on New Energy Finance publications, EBGC calculations of demand from Pension funds, SWF, insurance companies, other institutional investors, HNWI and Family Offices, Stern Report and World Bank “Winds of Change” estimates

Exposure to regulators and policy makers and skills that go beyond the traditional banking/investment managers

Cross disciplinary team with ability to build synergies across environmental sectors: investors, knowledge, network, brand reputation

Strong network and access to niche opportunities Tailored and customized risk approaches

Regulatory uncertainty

Information and knowledge gaps

Lack of scale and high transaction costs

Infant sector with underdeveloped risk tools

… that requireBottleneck factors …

6

Opportunities

CONFIDENTIAL

Benefits of intersection area

Public sector funding2

Number of facilities: 50+

Average size: ~$300 million

Players: Managed mostly by MDBs and other development agencies

Growth prospects: Limited

Private sector funding2,3

Number of funds: 75+

Average size: ~$200 million

Players: Managed by fund managers mostly in the private equity space

Growth prospects: Significant, particularlywith new incentives/instruments

Notes: (1) Data is based on best available information as provided by Preqin, climatefundsupdate.org, ADB, and World Bank. (2) Data refers to facilities/funds with exposure to Asia. (3) This information includes Private Equity Funds that are both closed and currently raising capital.

8

PPP Fund

CONFIDENTIAL

MDBs value addition in a JV with private operator

Reach

2 29 offices across developing Asia including frontier countries important for deal sourcing and monitoring activities. Additionally, ADB has access to regulators and policy-makers and benefits from an institutional reputation that private sector operators value

Risk mitigating instruments

3 ADB has several unique risk-mitigating facilities that are relevant for players who want to enter/reinforce their emerging market presence. Investment vehicles (such as CP3) are recognized by the World Economic Forum as highly applicable to emerging market conditions: one-stop shop for debt, equity and grants, complemented by policy dialogue

Access to new investors

4 ADB has privileged relationships with other DFIs and public sector sources of finance. Additionally, ADB reputation and development credentials appeal to socially responsible investors (SRI)

Environmental, Social and

Governance

5 Most private sector institutions do not possess ADB’s capabilities in ESG and development impact measurement that is becoming essential for risk mitigation and reputation purposes

Expertise

1 ADB has a long track record in areas like infrastructure, cleantech, water, and agriculture that, due to environmental constraints, are becoming increasingly attractive to mainstream investors

9

CONFIDENTIAL

How do we reduce risk or add value? (grey areas = differentiators) Partners and Public

Sector Agenda

+

Debt

Grant

Project finance Guarantees

Dedicated TA Other climate

change related facilities managed by ADB

+Support Financial Facilities

High Develop. Impact

Country dialogue

Regulatory framework / Policies Political risk mitigation

ESG Assessment

Dedicated resources SRI compliance

Climate Change Knowledge Pool

Historic project/country information Conferences & seminars

Support Knowledge Facilities

Fundraising: Public and private investors Deal Sourcing: > 40 offices in the region Execution: Team of 12* combined ADB/FM staff Monitoring: Unique risk mitigators Exit: Strong historic track record

InvestmentProgram

Returns > 10%**

Investors

*Note: Based on a $1B fund size**Note: The statement of target return amounts is not a representation that the fund will only make investments whose individual expected returns are in excess of the target return. No implication shall be drawn as to the advisability of investing in the fund.

Fund Manager

10

CONFIDENTIAL

PPP Fund re-engineered to match target investors needs and risk profiles ...

Long term capital protection and inflation hedge

Non correlation with financial markets

Clear structures and solid risk mitigation mechanisms

Strengthening of SRI, “impact investing“

Pension funds and SWF are looking for:

Natural Res.Infrastructure GreenTech

PPP Fund offers:

Investment drivers anchored in long term macro fundamentals and inescapable environmental constrains. Additional likely upside from future public/regulatory support

Renewable power and real assets may benefit from a variety of long-term contractual arrangements specifically designed to provide revenue certainty over 15-20 years with inflation protection

Private equity investments less vulnerable to equity markets and offer diversification value. Additionally high growth expected in Asian markets given lag to EUR/US

Partnership between reference player in the private equity industry and ADB unique risk mitigating instruments

Diversification across a wide range of sectors, geographic regions and investment structures within a rigorous investment process with multi-party, interdisciplinary due diligence and on-site monitoring

ADB champion of sustainable and triple bottom line investing with high environmental & sustainability investment standards

11

CONFIDENTIAL

… and to offer a new product specifically designed to minimize climate finance risks

PPP Fund

>10% ; 0.75%/7.5% Mix of sectors including infrastructure

within env. finance Global Inst. investors and DFI

Project Finance

Retu

rn

Risk_

_

+

+

Returns & Fees Sectors Typical Investors

6-12%; 1-2% Mostly infrastructure Local Financial Inst. and Dev.

Fin Inst. (DFI)

Private Equity

>20%; 2%/20% Niche or high potential but undercap. sectors

that could offer diversif. /arbitage opport. HNWI, Asset managers, SWF, Pensions, FoF

12

CONFIDENTIAL

Carbonmarkets

2

Carbontaxes

7

Generaltax revenues

NE

Offset markets and voluntary

3

Globalcapital

markets55+

Domesticpublic

budgetsNE

Bilateralagencies/

banks24

Multilateralagencies/

banks15

Public funding sources

42

Policy incentives

NE

Carbon Offset flows

3

Grants4

Concession loans

13

PPP Fund within climate change financeAllocation & Growth Potential2Effectiveness1InstrumentsSources

CP3 Space

Market rate loans

56

Equity18

üüü

üü

ü

ü

ü

ü

Private funding sources

55

Public money Offset money Private money

(1) Based on multiplier and refinancing effect (2) CAGR 2011-2016

Legend:

2%

10%

NE Not Estimated

Privatesector

finance55

Notes:

($, bn)

13

Source: Climate Policy Initiative (CPI) , ADB, 2011. Boxes and flows not drawn to scale

CONFIDENTIAL

PPP Fund: Differs from existing public sector facilities…

PPP Fund

Vehicle‘s suitability to addressmarket constraints

2

Knowledge and technology transfer

3

Reach

4

Returns

5

Scope

6

Leverage/Resource mobilization

1

Differentiator factors

Impact7

Deployment ratios below expectations due to market

conditions and disbursement criteria

Limited ability to attract new players to the region

Policy/regulatory work separated from investment opportunities; Limited reach beyond DFIs and government institutions

Primarily loans and grants, not reinvested into this space

Often capacity-building and investments in adaptation/mitigation areas

Marginal % of privatesector investors

Limited due to reach, scope, and lack of private sector leverage effect

Recognized by World Economic Forumas highly applicable to market conditions:one-stop shop for debt, equity and grants

Partnerships with best-in-practice fund managers and industry players to promote

FDI and knowledge/technology transfer

Financial facilities combined with policy dialogue that could effectively change investment environment in this

sector; Diverse set of investors, players and agencies operating under a common platform

Private equity, commercially-driven returns model with revolving effect

Pan-Asian, diversified strategy targets wide spectrum of infrastructure, technology, and nature-

based investments with positive climate impact

Leverages public fundingto mobilize private capital;

Targets multiper effect of >200x

Unique impact on job creation (>5,000 jobs/year),CO2 reductions (2.5M TCO2/year),

and technology transfer (90%)

14

Pure Public Sector Facilities

CONFIDENTIAL

The Climate PPP Fund concept

A vehicle that will mobilize capital at scale from global public and private sector investors …

1

Fund$1bn

Fund Investments Co-investments

… to invest in environmental finance in Asia …2

+

… designed to maximize impact and complement existing initiatives in this space.

4

ClimateFund

Clean energy initiatives

… through an unique investment management platform that combines private operators and MDBs with equity, debt and grant facilities …

3

Fund Manager

15

CONFIDENTIAL

Contact information

Duarte Henriques da SilvaProject Coordinator/PPP FundPrivate Sector Operations DivisionCapital Markets and Financial SectorsAsian Development Bank6 ADB Avenue, Mandaluyong City1550 Philippines(p) +63 2 683 1829dhenriquesdasilva@adb.org

Brian LiuInvestment SpecialistPrivate Sector Operations DivisionCapital Markets and Financial SectorsAsian Development Bank6 ADB Avenue, Mandaluyong City1550 Philippines(p) +63 2 683 1765bliu@adb.org

16

CONFIDENTIAL

CustomizedInvestment

Strategy

• Maturing PE market well positioned for low carbon and resource efficiency

• Early mover advantage and window of opportunity for scaled investment

• Track record and sector exposure above benchmarks

• Public private partnership supported by environment finance reference investors

Compelling Investment Opportunity

Experienced Investment

Manager

• LP preference for scale diversification and SRI exposure

• Hybrid fund and co-investment approach

• Low correlation with financial markets and hedge on climate / fossil fuel risk

• Significant anchor commitments and strong alignment of interest

Unique Program Attributes

• Deep sector expertise

• Extensive local presence brings extraordinary sourcing and coverage

• Focus on optimizing risk-adjusted returns in emerging markets

• Unique ability to mitigate risk

• Efficient fee structure

• Stable, inflation protected revenues with substantial upside

• Robust macro drivers in sector and region

• Natural resource limitation

Return

Risk

Key takeaways

CP3

Fund Manager

17

CONFIDENTIAL

Climate PPP Fund expected development impactPublic Sector Loan Operations Private Sector Equity Operations Climate PPP Fund

Public sector avg catalytic effect Private sector avg catalytic effect Catalytic effect

Public sector operations Yearly private sector (PE) Op. impact Yearly Fund impact

NA 4,391 jobs / $472m paid taxes 5,000 jobs / $885m paid taxes

Public sector operations Total private sector portfolio Fund investments NA 72% 90%

Public sector yearly average Private sector yearly average Fund expected yearly average

18,560,131 3,268,145 2,500,000

Public sector track record Private sector track record FundAt entrance/investment relying in

most cases on 3rd parties implement.At entrance/investment relying in

most cases on 3rd parties implement.MDB in the drivers seat with direct impl. responsibilities on ESG issues

Average project Average project Fund

Total multiplier effect of $100m MDB Investment

Job creation (#) / Taxes generated ($m)

Technology & Skills Transfer (% inv. with + impact)

Greenhouse gas emission reduction (tCO2-eq/year)

Environment, Social and Governance (ESG) compliance

Foreign direct investment promotion (%)

Non Reg. Inv./FinanciersLocal investors

< 20% < 30% < 70%

18

CONFIDENTIAL

Climate PPP Fund expected development impact (cont.)

Public Sector Loan Operations Private Sector Equity Operations Climate PPP Fund

Average project Average project Fund

Mostly country focus Mostly country focus Regional, allows for divesification at scale

Average project Average project Fund

Climate change mitigation or adaptation Mostly renewable energy projects

In addition to RE/EE, introduction of a third pillar-nature based assets (sust.

agri, water, forestry, fisheries)-that reinforces SRI and mega trends inv. case

Public sector track record Private sector track record Structure & Implement. Arrange.

Medium Medium Wide platform of donors and PPP effect

Traditional Interventions Traditional Interventions Fund platform

Knowledge dissemination, technical assistance, policy dialogue and public

financing

Participation in projects originated by private sector operators. MDB

intervention mostly as financier

Combination of policy dialogue and grant, debt & equity facilities under the same platform to address market bottlenecks

Average project Average project Fund

Average project Average project Fund

IRR < 10% IRR > 8% IRR > 10%

Geo exposure & promotion of regional integration

Definition of space and exposure to new markets

Partnership bet. public& private op.& strengthening of donors'

collab. agenda

Scope of interventions and resources

Private investors participation (%)

Returns (%) / Revolving effect

Private sector Invest.DFIs & Public Invest.

< 40% < 60%< 10%

19

I. Concept

CONFIDENTIAL

CP3: Unique insight, expertise and investing capabilities

Background A leading global banking platform (est. 1856) with a customized PE fund investment team (est. 1999) An AAA-rated, Asia-focused multilateral development bank (est. 1966), with 67 member countries

Assets and Investors Approx. $28B of client commitments under management from institutional investors, financial institutions, family

offices and high net worth investors; 433 fund investments and 97 co-investments $17B in approved financing in 2010; $800M+ in private equity funds under management

Unique approach

Synergetic and complementary joint venture Customized strategy offering diversification at scale Global perspective and local execution Proprietary risk mitigating facilities and policy/regulatory expertise

Investment thesis Comprehensive Pan-Asia climate investing strategy across three sectors: (1) alternative energy generation, (2)

energy efficiency, (3) natural resources & environmental services

Sector exposure $1.3B in sector-relevant investments, via 35 co-investments and 30 fund investments $7.2B invested in 139 clean energy projects since 2003; several carbon funds totaling $300M

Support platform

Over 200 energy investment bankers, including 43 professionals in Asia Over 30 alternative energy analysts, including 10 in Asia Over 40 policy dialogue, environmental safeguards, and regulatory support experts Access to debt financing, concessional/grant financing, technical assistance facilities, and guarantees

Investment team Dedicated execution team supported by full fledged platform – 10+ nationalities – 10+ languages Expertise in clean technology, private equity, environmental finance, and project finance

Sourcing and monitoring Extensive local presence, exceptional networks, and proprietary databases to deliver unique knowledge/deal flow Proprietary monitoring system that provides 24/7 web-based access to portfolio information and reports

21

CONFIDENTIAL

The ADB/FM partnership: Synergetic and complementary, combining extensive local presence and sector expertise

Jakarta

Taipei

Manila

Pakistan

New Delhi

Bangkok

Singapore

Hong Kong

Kuala Lumpur

Beijing

Guangzhou

Shanghai

Bangalore

KolkataMumbai

Chennai

HyderabadPune

TokyoSeoul

Labuan

Jakarta

Taipei

Manila*

Pakistan

New Delhi

Bangkok

Singapore

Kuala Lumpur

Guangzhou

Shanghai

Bangalore

KolkataMumbai

Chennai

HyderabadPune

Tokyo

Labuan

Kabul

Baku

YerevanTbilisi

Almaty

Astana

Bishkek

Dushanbe

Tashkent

Ashgabat

Ulaanbaatar

Beijing

Colombo

Vientiane

Hanoi

Phnom PenhPhnom Penh

Kathmandu

Dhaka

Port MoresbyPort MoresbyDiliDili

FM Offices

ADB Offices

* ADB HQ

The Asian Development Bank features a network of over 2,800 employees operating in more than 29 countries and a track record of $7.2 billion invested in 139 clean energy projects since 2003.

The Fund Manager capitalizes on global opportunities through its network of over 50,000 employees operating in more than 50 countries. The bank has a significant presence in Asia, with 21 office locations in 10 countries and approximately 3,400 professionals across the Continent.

22

CONFIDENTIAL

Strategy: Designed to maximize upside of the investment case and leverage on market trends

Source: Investment Environment and Government Policy for Climate Change Adaptation and Mitigation Funds, John Sawdon, 2011, ADB, E&Y 2007 and 2011

Policy Support

E&Y Private EquityAttractiveness

EM Index 2009-10

E&Y Renewable Energy Attractiveness

World Index 20111st 3rd NA NA NA NA NA

High

3rd 6th 1st 17th 23rd 5th 22nd

Legend: Low

Focus on countries with favorable investment conditions…

…within a conservative investment strategy…

30% allocation targeting leading fund managers

70% allocation alongside leading fund managers in portfolio companies

The Fund does not anticipate using leverage, but underlying funds and portfolio companies will

IPO on global exchanges, M&A to strategic buyers, secondary sale to financial investors

Non-control fund investments

Non-control co-investments

Leverage

Exit Strategy

FundInvestments

Co-Investments

Total

…through a well diversified set of investment vehicles*…

Source: CFIG and ADB, 2011

Infrastructure PrivateEquity Total Target

# deals

Asian Solar Energy Initiative 9,500*Small Wind Initiative/Quantum Leap in Wind 1,000*Clean Energy Financing Partnership Facility 250Asia Pacific Carbon Fund 150Future Carbon Fund 115Asia Climate Change & Clean Energy Venture Cap Initiative 100Climate Change Fund 40Carbon Capture & Storage Fund 20

20% 10% 30% 10-15

40% 30% 70% 25-35

60% 40% 100% 35-50

…that will benefit from ADB-managed debt/grant facilities.

Facility Name Amount($, mn)

* Including co-financing. Source: ADB, 2011

*Note: This sample investment strategy is presented for illustrative purposes only and is based on a number of assumptions regarding available investments that may not provide to be correct in the future.

23

CONFIDENTIAL

No. of deals Target returnTarget Size

Portfolio construction and target returns

Co-Investments

Funds

Joint Ventures

Target experienced GPs with track record in the region in low carbon sectors

Attract global managers with Asia teams to establish sector-focus funds

Seed platforms in Asia with global managers entering sector and region

Diverse portfolio of mature infrastructure technologies at utility-scale with contracted cash flows and government incentives

Buyouts in industrials with rapid growth in low carbon sectors

Growth investments in companies with significant revenue, bottom-line traction and margin improvement opportunities

Fund manager relationships Renewables equipment manufacturers Engineering-procurement-construction ADB/FM existing portfolios

Investment strategy

10-15

15-20%

~450mn

25-35~1,050mn

24

CONFIDENTIAL

Well-defined deal sourcing strategy

Deal sourcing abilities CP3 2013 Pipeline

Network& platform

Funds invested/to invest

Co-investments withcorporates /

industry players

Joint Ventures withregional players

ü ü

ü ü

ü ü ü

ü ü ü

Funds Co-Investments

Sources1

6 Funds

pre-selected

12 Co-Investments

pre-selected

Fund Manager

üü

ü

ü

üNote: 1) An additional source of deals not captured here are the large volume of unsolicited investment opportunities from managers interested in establishing a relationship with either ADB or the FM.

25

CONFIDENTIAL

CP3 fund and co-investment focus list An initial focus list of fund investments and co-investments for CP3 is as follows:

(all figures in USD million)

Potential fund investments Timing Committment Geography Primary StrategyAsia Growth Fund 2013 $25 Asia/Regional Growth/BuyoutGlobal Renewable Fund 2013 $40 China Growth/BuyoutAsia Mezzanine Fund 2013 $25 Asia/Regional MezzanineAsia Infrastructure Fund 2013 $30 Asia/Regional Energy InfrastructureRegional Renewable Fund 2013 $25 Vietnam/Cambodia/Laos GrowthChina Renewables and Cleantech Fund 2013 $25 China Growth

Potential co-investments Timing Committment Geography Type of businessProject Dragon 2012/2013 $25 China HydroProject Suriya 2012/2013 $30 Thailand SolarProject Tiger 2012/2013 $15 Southeast Asia Energy storage & handlingProject Elephant 2012/2013 $6 India Building management servicesProject Wind 2012/2013 $12 China WindProject Rose 2012/2013 $25 China Sustainable AgricultureProject Power 2012/2013 $25 India Wind, small hydroProject Renewables 2012/2013 $12 China Wind, solarProject Hydro 2012/2013 $12 Caucasus HydroProject Tree 2012/2013 $12 Southeast Asia ForestryProject Green 2012/2013 $12 India Wind, small hydro

26

CONFIDENTIAL

Terms

Target Fund Size U$ 1.5 billion

Anchor Investors [GBP 60 million] (UK DFID)* [U$100 million] (ADB)* 3% of the total commitments, up to $50 million (Fund Manager)

Term Twelve (12) years including five (5) years for investment

Target Returns 15-20% per annum**

Hurdle Rate 8% per annum

Management Fees Performance Fees

0.65% for fund investments, 1.15% for co-investments 5.0% for fund investments, 10.0% for co-investments

Potential Investors Pension funds, sovereign wealth funds, foundations, family offices, and other institutional private sector investors

Minimum Subscription U$25 million

Fund legal structure Cayman-exempted limited partnership***

Anticipated First Close Q1 2013 (TBD)

Anticipated Final Close Q1 2014 (TBD)

* Subject to approval** The statement of target return amounts is not a representation that the fund will only make investments whose individual expected returns are in excess of the target return. Return targets are included herein for the sole purpose of illustration and do not reflect any management fees, carried interest, taxes, transaction costs in connection with the disposition of unrealized investments, and other expenses borne by investors, which in the aggregate may be substantial. No implication shall be drawn as to the advisability of investing in the fund.*** CP3 may create additional jurisdictions to accommodate some investor’s preferences.Note: This summary of selected terms and conditions is qualified in its entirety by reference to the program's operative documents as finalized by FM, ADB and the client.

27

II. CP3 within current climate change finance

CONFIDENTIAL

(1) CAGR 2011-2016

Allocation & Growth Potential1InstrumentsSources

Public money Offset money Private moneyLegend: NE Not Estimated

Private funding sources

~55

Carbonmarkets

2

Carbontaxes

7

Generaltax revenues

NE

Offset markets and voluntary

3

Globalcapital

markets55+

Domesticpublic

budgetsNE

Bilateralagencies/

banks24

Multilateralagencies/

banks15

Public funding sources

~42

Policy incentives

NE

Carbon Offset flows

3

Grants4

Concession loans

13

Market rate loans

56

Equity18

2%

10%

Privatesector

finance55

Notes:

($, bn)

Source: Climate Policy Initiative (CPI) , ADB, 2011. Boxes and flows not drawn to scale

Climate change finance market

29

CONFIDENTIAL

CP3 sits in a narrow universe for public-private capital focused on climate-related investing1

Public sector funding2

Number of facilities: 50+

Average size: ~$300 million

Players: Managed mostly by MDBs and other development agencies

Growth prospects: Limited

Private sector funding2,3

Number of funds: 75+

Average size: ~$200 million

Players: Managed by fund managers mostly in the private equity space

Growth prospects: Significant, particularlywith new incentives/instruments

Notes: (1) Data is based on best available information as provided by Preqin, climatefundsupdate.org, ADB, and World Bank. (2) Data refers to facilities/funds with exposure to Asia. (3) This information includes Private Equity Funds that are both closed and currently raising capital.

30

CP3

CONFIDENTIAL

Facility name1 Year Administrator2 Size ($, mn)

Facilitytype Sector Funding Returns Asia

focus

Asia Climate Change & Clean Energy VC Initiative 2010 ADB 100 Equity/Grant Clean Energy Public Commercial 100%

Clean Energy Financing Partnership Facility 2007 ADB 250 Grant Clean Energy Public Non-commercial 100%

Clean Technology Fund 2008 World Bank 4,433 Debt/Grant Cleantech/Carbon Public Non-commercial 30%

Climate Change Fund 2010 Govt. of Indonesia 18 Grant Adaptation/Mitigation Public Non-commercial 100%

Forest Investment Program 2009 World Bank 599 Debt/Grant Mitigation/Forestry Public Non-commercial <10%

Global Climate Partnership Fund 2010 KfW 500 Equity/Grant Mitigation Public Commercial <40%

Global Energy Efficiency and Renewable Energy Fund 2008 EIB 170 Equity/Grant RE3 Public Commercial <30%

IFC Climate Catalyst Fund 2011 IFC AMC 500 Equity Climate change Public/Private Commercial 50%

Indonesia Clean Technology Fund 2009 CTF Partners 250 Equity Cleantech/RE Public Commercial 100%

International Climate and Forest Initiative 2008 Govt. of Norway 517 Debt/Grant Mitigation/Forestry Public Non-commercial <50%

Least Developed Countries Fund 2002 GEF 415 Grant Adaptation Public Non-commercial <30%

Pilot Program for Climate Resilience 2008 World Bank 982 Grant Adaptation Public Non-commercial 30%

Scaling Up Renewable Energy in Low Income Countries 2009 World Bank 352 Debt/Grant Mitigation Public Non-commercial 30%

SDIC Innovation (Beijing) Investment Fund 2009 SDIC 95 Equity Cleantech/RE SOE4/Private Commercial 100%

Climate Public Private Partnership (CP3) Fund 2012 ADB and Fund Manager 1,500 Debt/Equity

Guarantee/GrantTechnology, infrastructure, and nature-based assets in climate change space

Public/Private Commercial 100%

Main public sector climate change facilities

Notes: (1) Data is based on best available information as provided by Preqin, climatefundsupdate.org, ADB and World Bank. This is a selected list of public facilities most comparable to the CP3 platform. The full list is provided as an excel attachment. 2) ADB = Asian Development Bank; CTF = Clean Technology Fund; EIB = European Investment Bank; GEF = Global Environment Facility; IFC AMC = International Finance Corporation Asset Management Company; KfW = (German Development Bank); SDIC = State Development and Investment Corp. (3) RE = Renewable Energy. (4) SOE = State-owned Enterprise

31

CONFIDENTIAL

CP3: Differs from existing public sector facilities…CP3

Vehicle‘s suitability to addressmarket constraints

2

Knowledge and technology transfer

3

Reach

4

Returns

5

Scope

6

Leverage/Resource mobilization

1

Differentiator factors

Impact7

Deployment ratios below expectations due to market

conditions and disbursement criteria

Limited ability to attract new players to the region

Policy/regulatory work separated from investment opportunities; Limited reach beyond DFIs and government institutions

Primarily loans and grants, not reinvested into this space

Often capacity-building and investments in adaptation/mitigation areas

Marginal % of privatesector investors

Limited due to reach, scope, and lack of private sector leverage effect

Recognized by World Economic Forumas highly applicable to market conditions:one-stop shop for debt, equity and grants

Partnerships with best-in-practice fund managers and industry players to promote

FDI and knowledge/technology transfer

Financial facilities combined with policy dialogue that could effectively change investment environment in this

sector; Diverse set of investors, players and agencies operating under a common platform

Private equity, commercially-driven returns model with revolving effect

Pan-Asian, diversified strategy targets wide spectrum of infrastructure, technology, and nature-

based investments with positive climate impact

Leverages public fundingto mobilize private capital;

Targets multiper effect of >200x

Unique impact on job creation (>5,000 jobs/year),CO2 reductions (2.5M TCO2/year),

and technology transfer (90%)

32

Pure Public Sector Facilities

CONFIDENTIAL

Donor Country1 Australia Germany Japan United Kingdom

Initiative International Forest Carbon Initiative

International Climate Initiative Fast Start Finance International Climate Fund

AdministratorAustralia’s Department of

Climate Change / AusAID

Germany’s Federal Ministry for the Environment2

Japan’s Ministry of Finance UK Treasury, DFID, DECC, DEFRA, FCO and others3

Year of launch 2007 2008 2010 2011

Pledge size ($, million) 225 800 15,000 4,590

Funding Public Public Public and private Public

Facility type Grant Debt/Equity4/Grant Debt/Equity/Grant Equity/Grant

Delivery method Funds Direct and via funds Direct and via funds Direct and via funds

Focus on Asia (%) >80 30 N/A N/A

CP3 applicable? Yes Yes Yes Yes ($100M earmarked)

…and offers tax-payers an efficient vehicle to tackle climate change challenges at scale

Notes: (1) Data provided is based on best available information, as provided by climatefundsupdate.org, ADB and World Bank. This is a selected list of bilateral public initiatives targeting climate change. (2) The International Climate Initiative is administered by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) of the German government. (3) The International Climate Fund will be managed by a cross-departmental team with representation from the Department for International Development (DFID), the Department for Environment and Climate Change (DECC), the finance ministry (Her Majesty’s Treasury), The Department for Environment, Food and Rural Affairs (DEFRA), and the Foreign and Commonwealth Office (FCO). (4) In addition to debt and grant facilities, the International Climate Initiative where appropriate, via ‘project-based contributions’ to international funds (climatefundsupdates.org).

33

CONFIDENTIAL

Equis

Abundance

Element CLSA

Ever-bright

Macquarie

Prax

NatureElements

AIF Capital

Sect

or a

nd R

egio

nal E

xpos

ure

Track Record and Support Platform_

_

+

+

Robeco

Sindi-catum

TsingCEF

Inter-Vest

Berk-eley

SouthRiver

Westly

Capital Dynamics

LEGEND

1B

Mostly private investors

Raising funds

700M

400M

100M

KTBiDTech

Public-Private investorsSAIL

Keystone

JP MorganAsia Infra

& Resources

AquaInt’l

VantagePoint

SBIChallengerMitsui

AloeEnviroFund

StandardCharteredIL&FS Asia

Infra

ADB/Fund ManagerCP3

Source: Preqin, Company Reports, ADB, 2011

34

Main private sector climate change funds

CONFIDENTIAL

Pure Private Sector Facilities

Risk-mitigation

2

Environmental, Socialand Governance

3

Deal sourcing and track record

4

Diversification

5

Fee structure

6

Size and opportunity

1

Differentiator factors

CP3: Differs from existing private sector funds…

Unmitigated exposure to political and regulatory risk

Not core business;Typically dependent on third parties

Mostly new players with local presence limited to 1 or 2 markets

Limited either by scale (fund size)or by scope (geography/sector)

Traditional 2/20 fee structure

Average $200 million;Anchored on powerful macro

drivers in sector and region

Private sector diligence/execution, combined with unique set of risk-mitigating facilities (guarantees, b-

loans, grants), and access to policy makers

Reference institution in ESG compliance; Vehicle SRI1 compliant

Combined ADB/FM team augments traditional deal-sourcing across the whole region;

>10 years track record in this space

Diversification at scale across sectors, regions, and investment vehicles

Competitive fee structurebelow market rates and significant

anchor committments

Up to $1,500 million; Window of opportunity for scaled investment platform

35

Notes: (1) SRI = Socially Responsible Investing

CP3

CONFIDENTIAL

... and was re-engineered to match target investor’s needs and risk profiles

Long term capital protection and inflation hedge

Non correlation with financial markets

Clear structures and solid risk mitigation mechanisms

Strengthening of SRI*, “impact investing“

Pension funds and SWF are looking for:

Natural Res.Infrastructure GreenTech

CP3 offers:

Investment drivers anchored in long term macro fundamentals and inescapable environmental constrains. Additional likely upside from future public/regulatory support

Renewable power and real assets may benefit from a variety of long-term contractual arrangements specifically designed to provide revenue certainty over 15-20 years with inflation protection

Private equity investments less vulnerable to equity markets and offer diversification value. Additionally high growth expected in Asian markets given lag to EUR/US

Partnership between reference player in the private equity industry and ADB unique risk mitigating instruments

Diversification across a wide range of sectors, geographic regions and investment structures within a rigorous investment process with multi-party, interdisciplinary due diligence and on-site monitoring

ADB champion of sustainable and triple bottom line investing with high environmental & sustainability investment standards

*Note: SRI = Socially Responsible Investing

36

III. CP3 platform

CONFIDENTIAL

Full fledged, triple-bottom line platform in enviro. financePartners

+

Debt

Grant

Project finance Guarantees

Dedicated TA Other climate

change related facilities managed by ADB

+Support Financial Facilities

High Develop. Impact

Country dialogue

Regulatory framework Political risk mitigation

ESG Assessment

Dedicated resources SRI compliance

Climate Change Knowledge Pool

Historic project/country information Conferences & seminars

Support Knowledge Facilities

*Note: Based on a $1.5Bfund size**Note: The statement of target return amounts is not a representation that the fund will only make investments whose individual expected returns are in excess of the target return. Return targets are included herein for the sole purpose of illustration and do not reflect any management fees, carried interest, taxes, transaction costs in connection with the disposition of unrealized investments, and other expenses borne by investors, which in the aggregate may be substantial. No implication shall be drawn as to the advisability of investing in the fund.

Fundraising: Public and private investors Deal Sourcing: > 40 offices in the region Execution: Team of 12* combined ADB/FM staff Monitoring: Unique risk mitigators Exit: Strong historic track record

InvestmentProgram

Returns 15-20%**

Investors

Fund Manager

38

CONFIDENTIAL

CP3 will provide deal sourcing opportunities for existing facilities

… leverage additional resources / cofinancing

opportunities

… benefit from knowledge/policy

dialogue

Technical Assiatance Project Development Facility

2012+ 30Clean energy & environ. finance

Asian Solar Energy Initiative 2010-2013 500/9000* Solar Carbon Capture and Storage Fund 2009+ 20 Carbon Capture Asia Climate Change & Clean Energy VC 2010-2018 9/100** Clean Energy Low Carbon Technology Exchange 2010-2013 8 Solar/Wind/EE Small Wind Init./Quantum Leap in Wind 2009-2015 4/1000* Wind Asia Pacific Carbon Fund 2007+ 150 Carbon Clean Energy Fin. Partnership Facil. 2007+ 250 Clean Energy Future Carbon Fund 2008-2015 115 Carbon

ADB funds Climate Change Fund 2008+ 40 Climate Change Energy for All Initiatives 2008-2015 N/A Access to Energy Asian Clean Energy Forum 2006+ N/A Clean Energy Apac Clean Energy Governance & Regul. 2010+ N/A Clean Energy

Policy/ Knowledge

Note: (*) Denotes total investments including co-financing, (**) Denotes equity investment in facility

CP3 Specific

Aggr

egati

ng M

arke

t/Te

chno

logy

Tra

nsfe

r Donor funds mgd

by ADB

ADB funds

Inno

vativ

e Fi

nanc

e

Donor funds

managed by ADB

Technical Assistance Facilities

Name PeriodAmount($ mn)

Focus Areas

Ability of CP3 to …

Source: ADB, 2011

39

CONFIDENTIAL

Investors Partners in the CP3 network

Joint fundraising activities

2

Access to ADB risk-mitigating instruments, as well as debt

and grant products

3

Access to ADB policy dialogue and climate change-related

initiatives

4

Logistical support through network of 24 offices in the

region

5

Mentioning of CP3 in Fund Manager’s marketing materials

6

Access to co-investment opportunities

1

CP3 Platform

The CP3 advantage to investors, investees, and partners

40

Investees

Yes To be negotiatedYes

Yes To be negotiatedTo be negotiated

Yes YesYes

Yes YesYes

Yes To be negotiatedTo be negotiated

Yes To be negotiatedYes

CONFIDENTIAL

CP3 platform aims to achieve partnerships with industry players

Corporate Partners

CP3 Investment Program

Major Japan-based industrial

conglomerate

Chinesephotovoltaicmanufacturer

Danishwind turbinemanufacturer

Germanelectronics

multinational

India’s largestpower utility

company

Major Korea-based industrial

conglomerate

Major USA-based industrial

conglomerate

Venture-stageclean energy

firms

Direct/Co-InvestmentsFunds Corporate

Joint Ventures

Investment opportunities in Asia

Risk sharing opportunities

Access new set of investors

Ability to globalize portfolio

Access government institutions and regulators

Access CS and ADB debt and grant facilities

Strategic advantage for corporates

New deal-sourcing pillar

Partnership with industry leaders

Access new industry developments

Facilitate technology transfer to Asia

Value addition to CP3

41

IV. Development impact

CONFIDENTIAL

With a multiplier effect more powerful than other ADB inv., CP3 leverages > resources into this space

Loan

ADB Loan

Total debt component

(US$m)

100 300 400

Total resources

(debt+ equity)

4.0xMultiplier effect

100

25x

400

2,500

Traditional LP Investment

ADB Equity

Total equity Investment

Total resources

(debt+ equity)

Multiplier effect

21,875

219x

CP3

100

1,500

ADB Equity

Total resources

(debt+ equity)

CP3 Size

Multiplier effect

43

CONFIDENTIAL

CP3 expected development impactPublic Sector Loan Operations Private Sector Equity Operations CP3

Public sector avg catalytic effect Private sector avg catalytic effect CP3 catalytic effect

Public sector operations Yearly private sector (PE) Op. impact Yearly CP3 impact

NA 4,391 jobs / $472m paid taxes 5,000 jobs / $885m paid taxes

Public sector operations Total private sector portfolio CP3 investments NA 72% 90%

Public sector yearly average Private sector yearly average CP3 expected yearly average

18,560,131 3,268,145 2,500,000

Public sector track record Private sector track record CP3At entrance/investment relying in

most cases on 3rd parties implement.At entrance/investment relying in

most cases on 3rd parties implement.MDB in the drivers seat with direct impl. responsibilities on ESG issues

Average project Average project CP3

Total multiplier effect of $100m MDB Investment

Job creation (#) / Taxes generated ($m)

Technology & Skills Transfer (% inv. with + impact)

Greenhouse gas emission reduction (tCO2-eq/year)

Environment, Social and Governance (ESG) compliance

Foreign direct investment promotion (%)

Non Reg. Inv./FinanciersLocal investors

< 20% < 30% < 70%

44

CONFIDENTIAL

CP3 expected development impact (cont.)Public Sector Loan Operations Private Sector Equity Operations CP3

Average project Average project CP3

Mostly country focus Mostly country focus Regional, allows for diversification at scale

Average project Average project CP3

Climate change mitigation or adaptation Mostly renewable energy projects

In addition to RE/EE, introduction of a third pillar-nature based assets (sust.

agri, water, forestry, fisheries)-that reinforces SRI and mega trends inv. case

Public sector track record Private sector track record CP3 structure & Implement. Arrange.

Medium Medium Wide platform of donors and PPP effect

Traditional Interventions Traditional Interventions CP3 platform

Knowledge dissemination, technical assistance, policy dialogue and public

financing

Participation in projects originated by private sector operators. MDB

intervention mostly as financier

Combination of policy dialogue and grant, debt & equity facilities under the same platform to address market bottlenecks

Average project Average project CP3

Average project Average project CP3

IRR < 10% IRR > 8% IRR > 10%

Geo exposure & promotion of regional integration

Definition of space and exposure to new markets

Partnership bet. public& private op.& strengthening of donors'

collab. agenda

Scope of interventions and resources

Private investors participation (%)

Returns (%) / Revolving effect

Private sector Invest.DFIs & Public Invest.

< 40% < 60%< 10%

45

Annex 1: ADB Credentials

CONFIDENTIAL

243

550

512

1,053

Equity

Guarantees

Co-Financing

Loans

220

396

4382006 2007 2008 2009 2010

Loans 7264 9516 9899 13216 11462

Co-Financing 970 534 1275 3418 3669

TAs, Grants, Guarantees 895 961 896 1452 2139

Equity 231 80 103 220 243

1,0005,0009,000

13,00017,000

ADB’s financial capacity and clean energy exposureADB approved $17.51 billion worth

of transactions in 2010……of which $2.36 billion was deployed in

non-sovereign investments.

ADB made $4.8 billion worth of clean energyInvestments in 2008-2010…

…resulting in significant clean energy outputsthroughout the Asia region.

71 million tonsCO2/year abated

112 TWH-equivalent

saved

14GWInstalled

generatingcapacity from

renewable energy

$, millions2010: $2,358

2009: $1,054*

$, millions

*2009 figure does not include ADB’s Trade Finance Program

1,234

192

318

1,674

638

206

556Energy Efficiency

Clean Energy

Cleaner Fuel

Hydro

Wind

Solar

Other$, millions

RenewableEnergy

47

CONFIDENTIAL

ADB’s Private Equity Fund business

Source: Asia Private Equity Review, EMPEA, Preqin, ADB, 2011a) Preqin Performance Indicators (net IRR) based on a pool of 251 Asian (excl Japan & Korea) funds with vintage years 2001-2009b) Value-weighted pooled net IRR of active ADB fund investments with vintage years 2001-2009

Current portfolio totals > 40 funds amounting to > $850m widely distributed across the continent …

SME

Restructuring

Infrastructure

Environment

… focusing on sectors with growth potential and development impact …

Avg. yearly investments and market share Performance

12.0%a)

11.6%b)

… ADB has played an evolving industry incubator role and its performance has been

in line with the market

2001-04 2005-07 2008-10Support Consolidate Further

early stage relationships w/ expansion to industry promising frontier mkts &

players sectors

0.5% 0.5% 0.6%

48

CONFIDENTIAL

ADB’s Private Equity Funds and portfolio companies

Investments in over 40 funds, resulting in over $850 million in committed capital…

…providing capital to over 400 portfolio companies throughout the Asia region.

49

CONFIDENTIAL

Tombstone of ADB clean energy investmentsSolar Wind Hydro

Water Transport Waste To Energy

Energy Efficiency Cleaner Fuel Clean Energy Fund

Thailand: Bangchak Solar Power

THB 4.2 billion

2010

India: Tata Power Wind Energy Financing

INR 2.05 billion

2007

Regional: Clean Energy PE/VC Funds Initiatives

$100 million

2010

PRC: Municipal Natural Gas Infrastructure

$200 million

2010

PRC: Songhua River Basin Water Pollution Control

$10 million EquityCNY 250 million Loan

CNY 100 million B Loan2010

India: Himachal Pradesh Clean Energy Development Program

$800 million

2008

PRC: Lanzhou Sustainable Urban Transport

$150 million

2009

PRC: Everbright Environmental Energy Limited

$100 million loan$100 million B Loan

2009

Azerbaijan: Garadagh Cement Expansion and Energy Efficiency

$27 million

2010

50

CONFIDENTIAL

Company

ADB direct equity investment in climate change

51

Sector Country Equity investment ($, mn) IRR1 Exit strategy

Company A

Company B

Company C

Company D

Company E

Company F

Energy(Cleaner fuel)

Energy(Cleaner fuel)

Energy(Cleaner fuel)

Energy (Supply side energy efficiency)

Energy (Hydro)

Environmental protection

India

India

China

Pakistan

China

China

9.2

2.6

24.0

2.8

16.8

9.1

43%

6%

18%

18%

12%

10%

Exchange / Block sale

IPO pending

Exchange / Block sale

IPO / Trade sale / Put

option

IPO / Trade sale / Put

option

IPO / Trade sale / Put

option* Unrealized IRR Based on ADB estimate, including guaranteed IRR under the put option.

The investment case: Why are LPs so interested?

CONFIDENTIAL 53

Market snapshot: Asia driving global growth

Europe

North America

Asia & Oceania

Middle East & Africa

South America

Source: Bloomberg New Energy Finance, UNEP, ADB, 2011

New clean energy investments per year($bn)

CONFIDENTIAL

Investors perspective: Keen to invest in the space, particularly long term institutional investors

54

Breakdown of cleantech funds by firm HQ

Source: Prequin, 2011Expected timeframe for next commitment to a cleantech fund

Source: Prequin’s survey of 100 limited partners conducted in December 2010.

Most attractive regions for cleantech invest. opport. in 2011

Asia North America

Europe Greater China

South America

Australasia

Pro

po

rtio

n o

f R

esp

on

den

ts

MENA Africa

Source: Prequin’s survey of 100 limited partners conducted in December 2010.

Breakdown of cleantech investors by type

Proportion of Investors

Source: Prequin, 2011

Source: Prequin, 2011

CONFIDENTIAL 55

Understanding their motivations: Investment case anchored on powerful long term economic drivers …

Environmental Constraints

2%

-3% -32%

Population at risk by sea rise

CO2 emissions

Water per capita

Forest Area

-5%

28%-2%

Avg Animal Protein, Paper and Wood consumption

1.0x 26.9x3.4x

12% 40%14%

0% -19%1%

Note: Data refers to ∆ % between 2010 and 2020, except for GDP (2010-16) and deforestation (1990-2005)Source: World Bank, Asian Development Bank, OECD, IEA, World Forests Report

Investment case drivers US Europe Asia

Long Term Macro Trends

GDP per Capita

Population

Energy demand

Urbanization

28% 21% 84%

8% 1% 11%

-6% -6% 8%

3% 1% 48%

(Data refers to ∆ % between 2010 and 2020)