POLARIS INFRASTRUCTURE INC.TSX : PIF

JUNE 2018WWW.POLARISINFRASTRUCTURE.COM

IMPORTANT NOTICE

This Presentation includes general background information with respect Polaris

Infrastructure Inc. (“Polaris”) and does not purport to be complete. It has been

prepared solely for informational purposes and is not to be considered a solicitation or

an offer to buy or sell any securities and should not be treated as investment advice.

The information contained in this Presentation is confidential and the property of

Polaris. It is made available strictly for the purposes referred to above. This

Presentation must not be disclosed, copied, published, reproduced or distributed in

whole or in part at any time without the prior written consent of Polaris and, by

accepting this Presentation, you agree not to do so. You also agree to return any

written copy of this Presentation to Polaris at the request of Polaris.

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POLARIS

INFRASTRUCTURE

OVERVIEW

SNAPSHOT

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Own and operate San Jacinto Geothermal power plant in Nicaragua

PPA with national grid – contractual price per MWh, with annual

escalator, to 2029

Recapitalized in May 2015

“Fixed” balance sheet

New Management and Board

Cash flow positive; init iated US$0.10 quarterly dividend in Q2 2016;

currently paying U$0.15 quarterly dividend (50% growth in 2 years)

Strong organic cash flow growth expected in next 12-18 months

CAPITAL MARKETS SNAPSHOT

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* Int raday as of June 7 , 2018

S y m b o l : P I F

Price* (C$):

C$15.44

Shares Outstanding (FD):

15.7 mm

Market Cap. (C$):

242 mm

Market Cap (US$):

187 mm

Cash On Hand –Mar 31 (US$):

35 mm

Debt – Mar 31 (US$):

168 mm

Enterprise Value (US$):

320 mm

Trailing EBITDA (US$):

~ 50 mm

EV/EBITDA:

~ 6.4x

Dividend (US$):

$0.60

Dividend Yield:5.0%

CONTINUED IMPROVEMENT IN

FINANCIAL METRICS

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EXECUTION & DELIVERY

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EBITDA ↑Growth of $24M (67%)

Debt ↓Repaid $33.7M

Dividends ↑Paid out $17.9M

Growth at San Jacinto project…

Return to Shareholders…

Strengthening balance sheet

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Abil i ty to raise

dividend based

on both growth

in cash f low

and/or payout

rat io

DIVIDEND GROWTH COMMITMENT

* Calculated using management's estimated sustaining capital expenditure; adjustedto reflect impact of downtime for turbine maintenance for Q2/17 and Q2/18

Short-term goal

of U$1.00/year

SAN JACINTO

GEOTHERMAL PLANT

PROJECT OVERVIEW

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72 MW capacity turbines – both onl ine s ince January 2013

PPA in US$ for up to 72MW net, to 2029

US$126/MWh in 2018 with 3% per annum pr ice escalator for 5 years;

1 .5% per annum thereafter ( to 2029)

13 production wel ls with productive capacity of approximately:

550-600 tph of steam and

1,800-2,000 tph of hot brine.

Current steam can result in power capacity of approx. 68-72 MW

(net of ~5 MW internal consumption)

7 Injection wells re -inject the hot br ine into the reservoir to create

a “closed loop” – renewable energy in l i teral sense

Plant re-certif ied for CO 2 credits - ~250,000 tons per year avai lable

SAN JACINTO

DRILLING PROGRAM

2017/2018 DRILLING PROGRAM

Three new productions wells

SJ 4-2: ~1.5 MW

SJ 12-4: ~4 to 6 MW

SJ 12-5: ~ 8 to 12 MW

One new injection well

SJ 11-2

Selected infrastructure investments:

Dri l l ing pads

New separation stat ion

Well connection piping etc.

Total project budget ~$30MM

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Pending

update….

IMPACT OF DRILLING INVESTMENT

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$22 mil l ion (46%)

increase in

Revenue

$24 mil l ion (147%)

increase in

Discret ionary

Cash Flow

* D i s c r e t i o n a r y C a s h F l o w = E B I T D A l e s s F i n a n c e c o s t s a n d S u s t a i n i n g c a p e x

FUTURE GROWTH

OPTIONS

FUTURE GROWTH OPTIONS

Acquisitions / Project Development

Continued San Jacinto project growth

Binary Unit

Carbon Credits

Develop Western Sector

Casita – San Cristobal Geothermal Field

Development Project

Expect World Bank funding ($40 -45 mil l ion)

Target approval Q3 2018

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ACQUISITIONS/DEVELOPMENT

Grid in Central America is small/fragmented and has a

signif icant number of renewable projects

Numerous – 25-100 MW projects in the region

Large power companies and infrastructure funds not act ive

Owners are small companies and / or high net worth

individuals

Implication is that:

Good targets for acquisit ions without signif icant competit ion

Much higher IRR projects avai lable to develop (i .e. 12-18%

IRR vs. 8-12% in North America)

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BINARY UNIT

Separate generating unit – generates power from hot geothermal f lu ids (brine) before reinject ing

Low r isk means of generating addit ional power

No explorat ion risk

Low technical r isk

Competit ive nature of OEM market wi l l result in attract ive pricing

Design f inal ized and EPC quotes received

Total cost of approximately $30 mil l ion

Est imate addit ional 8 – 10 MW

Equates to approx. $6 – 8 mil l ion addit ional cash f low

Approx. 4-5 year payback

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NEAR TERM GROWTH IMPACT

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Possible further

growth in 2019

based upon

investment in

binary unit or

strategic M&A

(without rais ing

capital)

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NICARAGUA OVERVIEW

Daniel Ortega President – elected in 2007

▪ Ortega won national election in November 2016

Highest growth rate in central America

“Left Leaning ” pol it ical ly but open economically

Polaris project is a showcase project for the country

One of the largest fore ign investments in country to date

Renewable energy

World Bank and other g lobal development banks as lenders

RESEARCH ANALYST COVERAGE

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* as of June 6, 2018

SAN JACINTO PHOTOS

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