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An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013

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Page 1: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

An Introduction to Rame Energy

Tim Adams, CEO, Rame Energy

Geneva, Zurich, Nov 2013

Page 2: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Company Background

» Projects

» Mining/Industry & Energy

» Independent Power Producer

» The Future

Page 3: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» 2002 - Formed to target UK offshore

wind industry

˃ Supplier of engineering and specialist

construction services

˃ Wind turbine installation vessel design

» 2005 - Offshore Wind Project: Sandbank

24, German Bight

» 2006 - Contracted by Barrick Gold to

develop Veladero high altitude,

utility grade wind project in Argentina

» 2006 - Established office in Chile

Page 4: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» 2006 Onwards – Renewable energy project pipeline

» 2009 – turbine design contract for Chinese State owned enterprise

» Worked extensively with mining and industrial clients in Chile, and

on power projects globally in Pakistan, Alaska, Texas, Montana,

Vietnam, Thailand, Indonesia

» Now transitioning into a power provider for heavy industry

Page 5: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» 40 employees between UK and Santiago

» UK – Corporate Headquarters, Engineering and Commercial

departments

» Chile – Engineering, Project Management, Operations & Maintenance

» Representative offices – Singapore, Ecuador, Texas

Rame Energy

Seawind International UK

Seawind Marine Seawind Marine

Services

Seawind Chile Holdings

Seawind Services SPVs

Page 6: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Full EPC services

» Power systems modelling and integration (hybrid)

» Project development, resource assessments, permitting,

» Logistics

» Generator design / modification

» Operating and maintenance services

Page 7: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Rame scope: Design, installation, O&M

» 2 MW asynchronous generator, 80m rotor diameter

» Integrated into mine diesel generation system

» Argentina, 4,300 m a.s.l – highest operating MW class unit

in the world

˃ Adapted for high altitude operation, air density and power

conversion, extreme environmental conditions

» Challenging logistics, limited construction window

» Turbine reliably delivers substantial diesel savings

Page 8: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Rame scope: environmental studies, permitting, technical

development, engineering, turbine supply,

commissioning, O&M

» 10 x 2 MW Units + 1 x 17 MW HFO

» Operational since 2009

» Rame provides on-going technical and maintenance

support

Page 9: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Rame scope: full EPC package

» Wind – diesel - hydro hybrid

» El Toqui Zinc Mine, Patagonia

» Detailed electrical design to integrate the turbines into an existing

diesel/hydro power grid

» Extremely remote – limited access

» Challenging environment – extreme wind speeds, short construction

window, complex logistics

Page 10: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Rame scope: feasibility study,

front-end engineering &

design

» Diesel – solar – waste heat

recovery hybrid plant

» 3 MW continuous, 4.5 MW

peak loads

» 2 MW photo-voltaic solar

energy array supply

» 1 MW waste heat recovery

plant

» Blended cost of energy:

$100/MWh

Page 11: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Wind resource measured 90 locations selected 23 over 1 GW

» Selected for high capacity factors

» 100 MW ready to build, 300 MW within 48 months

» Involved in 34% of Chile’s installed wind power capacity

» Spread throughout the country and electrical system to provide

optimal technical/commercial generating solutions

» Commenced solar development

» Peak shaving diesel plants

Page 12: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Energy shortages forecast 8,000

MW by 2020

» 98% of fossil fuels imported

» Demand driven by reducing hydro

power input & Increasing demand

from heavy industry

» Cut-off of LNG supplies

» Volatile spot market

» Pro-renewables legislation

» Ambitious renewables targets –

25% by 2024

» No feed-in tariff - unsubsidised

» Renewable certificates system

required by law to offset new

thermal capacity

Electricity Market by User 2012

Copper Industry’s Electricity Demand to 2020 in Chile

Page 13: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Energy cost is a very substantial portion of the operational cost of a

mine, typically 20-30%

» Intelligent integration of renewables can address both energy cost

and carbon footprint for mines

Page 14: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Industrial consumers cannot contract for energy blocks to meet all

their needs

» Resulting in exposure to spot market volatility and/or basic energy

shortfalls

» Constraints on expansion and new facilities, hard to predict future

operating costs

» Increasing reliance on high cost diesel generation

» Capital no longer available for non-core assets

» Creates the niche market for “Power Purchase Agreements”

» Intermittent sources attractive for partial supplies

» Power prices high

Page 15: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

8

27

12 8

0

10

20

30

40

50

60

Spot Price Diesel Solar Wind

$c/

kW

h

ENERGY PRICE COMPARISONS

lower upper

32

16

10

50

Page 16: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Selling power to off-grid consumers by integrating renewables to

displace diesel consumption under a PPA

» Hybridisation – combining thermal & renewable generation

» Selling power through the grid to consumers under a PPA

» Power trading from the spot market and power pools to consumers

» Trading of renewable certificates (required under law for new thermal

generators)

Page 17: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

Supply

Rame generates power

at the lowest possible

cost utilising the best

technology and the best

project selected from its

mature development

pipeline

Demand

Rame sells power to

large industrial

consumers with a high

price threshold driven by

their dependence on

sourcing energy in a

volatile market

Average Cost

8 – 14 cents kwh

Average Selling Price

10 – 24 cents kwh

Project

IRR

20%+

Rame Profit

Opportunity

Match customers power

needs to internally

created power

generation

developments

» Customer driven, not project led

» Maximization of power sale margin

» Fully integrated project development & delivery revenue

» Unsubsidised, commercially driven, private power sales

Page 18: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» International Mining Companies e.g. Barrick

» Blue-chip industrial companies

» Backlog of power needs (PPAs) 250 MW of power to supply

Page 19: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

Four projects totalling up to 100 MW

Raki / Huajache (15 MW) Construction Start Q4 2013 Punta Chome (9 MW) Construction Start Q1 2014

Albatros (45 MW) Construction Start Q3 2014 Pampa Blanca (39 MW) Construction Start Q2 2014

» Monitoring since June 2009

» Land purchased

» Wind measurements and yields calculated by

independent consultancy GL-Garrad Hassan

» Environmental permits granted

» 10 year escalating PPA in place with Akzo Nobel

» Santander 80% equity partner

» Full EPC by Vestas 5 x 3 MW

• Recording wind data since 2006

• Land purchased

• Wind measurements and yields calculated by independent consultancy GL-Garrad Hassan

• Environmental permits for 6 turbine locations obtained

• 10 year escalating PPA in place with Akzo Nobel

• Santander 80% equity partner

• Full EPC by Vestas 5 x 1.8 MW

• Adjacent to Anglo American mining project Mantos

Blancos

• MOU with Anglo American in 2010 for use of land and

connection to substation

• 3 meteorological masts on site to determine wind

climate

• PPA with Anglo American

• EPC negotiation ongoing with Nordex

• Monitoring wind climate since 2010

• Preliminary energy yield analysis complete

• Permitting nearing completion

• PPA terms agreed with Antuko power pool

• Preliminary engineering complete

Page 20: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

5 5

20 20

75

100

0

10

20

30

40

50

60

70

80

90

100

Total Construction

Cost

Bank Project Debt

Financing

Santander

Construction

Bridge Equity

Rame Initial Equity Santander

Refinanced with

Macquarie

Mezzanine Facility

Perc

en

tag

e (

%) Equity during construction

80% 20%

Rame Equity

100%

Completion Construction Phase

» Rame’s innovative financing structure allows for 100% ownership of

assets for 5% equity investment

Page 21: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

Phase 3

Phase 2 Phase 1

Rame 20% Equity Rame 100%

SPV Senior Debt

76%

Santander 80% Equity

Macquarie Equity Facility

Senior Debt

Rame 51%

Institutional Buyer 49%

SPV

SPV

Senior Debt

Page 22: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Build a portfolio of wholly owned generating power assets with

project returns in excess of 20%

» Post construction refinancing producing long term generating yields

of interest to pension funds and insurance companies looking for

stable cash flows

» Sell down 49% stake in project equities to these parties on a 8-9%

yield

» Refinance mezzanine facilities to lower cost of capital, retain control of

the generating asset, consolidate the balance sheet

Page 23: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

1.00

1.44

2.45

0.00

0.50

1.00

1.50

2.00

2.50

3.00

Construction 0 months Completion 9 months Sell Down 24 months

Valu

e o

f $1 In

vest

ed

$1.00 $1.44 $2.45

» Typical investment value growth through project capital deployment

Page 24: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

» Proven, profitable, debt free business with established relationships

with mining and heavy industry in Latin America, particularly Chile

» Focused on high yielding energy projects

» First 24 MW projects financed and construction contracts being

executed

» Bank Equity and debt facilities in place

» Company completed all pre-IPO preparations for target admission to

AIM in London end 2013

» Closing private pre-IPO rights issue offering up to 50% return to

forecast price at admission

Page 25: An Introduction to Rame Energy - Academy & Finance · An Introduction to Rame Energy Tim Adams, CEO, Rame Energy Geneva, Zurich, Nov 2013 » Company Background ... » Representative

Tim Adams: Chief Executive Officer

Email: [email protected]

Phone: +44 (0) 7966 900 442