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ABENGOA YIELD ABENGOA YIELD First Quarter 2015 Earnings Presentation May, 2015

Transcript of Presentación de PowerPoint - Atlantica Yield · ABENGOA YIELD This presentation and the...

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ABENGOA YIELD

ABENGOA YIELD

First Quarter 2015 Earnings Presentation May, 2015

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ABENGOA YIELD

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This presentation contains forward-looking statements. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this

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negative of such terms or other similar expressions or terminology. Such statements reflect the current views of the Company with respect to future events and are subject to risks, uncertainties and

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light of these risks, uncertainties and assumptions, the events or circumstances referred to in the forward-looking statements may not occur. None of the future projections, expectations, estimates or

prospects in this presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections,

expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the presentation.

Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied

by such forward-looking statements, including, among others: changes in general economic, political, governmental and business conditions globally and in the countries in which the Company does

business; decreases in government expenditure budgets, reductions in government subsidies or adverse changes in laws affecting the Company’s businesses and growth plan; challenges in achieving

growth and making acquisitions; inability to identify and/or consummate future acquisitions; legal challenges to regulations, subsidies and incentives that support renewable energy sources; extensive

governmental regulation in a number of different jurisdictions; changes in prices, including increases in the cost of energy, natural gas, oil and other operating costs; counterparty credit risk and failure of

counterparties to the Company’s offtake agreements to fulfill their obligations; inability to replace expiring or terminated offtake agreements with similar agreements; new technology or changes in industry

standards; inability to manage exposure to credit, interest rate, exchange rate, supply and commodity price risks; reliance on third-party contractors and suppliers; failure to maintain safe work

environments; insufficient insurance coverage and increases in insurance cost; litigation and other legal proceedings; reputational risk; revocation or termination of the Company’s concession agreements;

variations in market electricity prices; unexpected loss of senior management and key personnel; changes to our relationship with Abengoa, S.A.; weather conditions; failure of newly constructed assets to

perform as expected; failure to receive dividends from assets; changes in our tax position; unanticipated outages at our generation facilities; the condition of capital markets generally and our ability to

access capital markets; adverse results in current and future litigation and our ability to maintain and grow our quarterly dividends. Furthermore, any dividends are subject to available capital, market

conditions, and compliance with associated laws and regulations. These factors should be considered in conjuction with information regarding risks and uncertainties that may affect the Company’s results

included in the Company’s filings with the U.S. Securities and Exchange Commission at www.sec.gov.

Abengoa Yield undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or developments or otherwise.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed,

estimated, expected or targeted.

This presentation includes certain non-GAAP (Generally Accepted Accounting Principles) financial measures which have not been subject to a financial audit for any period.

The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to verification, completion and change without notice.

No representation or warranty, express or implied, is given or will be given by or on behalf of Citigroup Global Markets Inc. or Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “Placing Agents”) or

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be accepted by the Placing Agents in relation to such information or opinions or any other matter in connection with this presentation or its contents or otherwise arising in connection therewith.

Disclaimer

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Agenda

Q1 2015 Results 1

New drop-down Acquisition from Abengoa 2

Updated Guidance 3

Q&A 4

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Highlights

Solid cash available for distribution for the period

(Amounts in $M) 3 months March 15

3 months March 14

% Variation

Revenue 118.3 63.8 85.4%

Further Adjusted EBITDA inc. unconsolidated affiliates

(*) 105.2 51.1 105.7%

CAFD 38.5 - n/a

(*) Further Adjusted EBITDA includes dividend from preferred equity investment in Brazil and our share in EBITDA of unconsolidated affiliates.

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Segment information

Good results across all our geographies and business segments

(Amounts in $M) North America South America EMEA

March 15 March 14 ∆ March 15 March 14 ∆ March 15 March 14 ∆

Revenue 55.9 42.8 30.5% 24.4 14.3 71.0% 38.0 6.7 466.8%

Further Adjusted EBITDA inc. unconsolidated affiliates

50.9 37.2 37.0% 25.0 11.0 127.3% 29.2 2.9 891.9%

(Amounts in $M) Renewables Conventional Transmission Water

March 15

March 14

∆ March

15 March

14 ∆

March 15

March 14

∆ March

15 March

14 ∆

Revenue 63.7 20.8 206.4% 31.3 28.8 8.9% 19.2 14.3 34.3% 4.1 - n.m.

Further Adjusted EBITDA inc. unconsol. affiliates

52.8 16.6 218.3% 27.0 23.5 14.9% 20.5 11.1 85.1% 4.9 - n.m.

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ABENGOA YIELD Key operational metrics

3 months March 15

3 months March 14

Renewable GWh

Produced 319.0 129.4

Conventional

GWh Produced 627.9 585.3

Electric Availability 101.7% 99.6%

Transmission Availability 99.9% 100.0%

Water Availability 96.8% -

Operational performance in line with expectations

6

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ABENGOA YIELD Mojave

280 MW gross, 250 MW net Mojave desert, California

Finished construction in November 2014

Ramp up as planned

Reaching 250 MW net capacity daily

7h 8h 9h 10h 11h 12h 1h 2h 3h 4h 5h 6h 7h

300 MW

200

100

Mojave performance update

7

Real day generation profile

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ABENGOA YIELD Cash Flow

Solid cash generation profile in our assets

Q1 2015

3m

Further Adjusted EBITDA inc. unconsolidated affiliates

105.2

Share in EBITDA of unconsolidated affiliates

(5.5)

Interest paid (18.1)

Variations in working capital (4.0)

Increase in ST financial investments (16.7)

Other non monetary adjustments (23.5)

Operating Cash Flow 37.4

Investing Cash Flow (91.2)

Financing Cash Flow (1) (18.6)

Net change in Cash (72.4)

(1) Includes payment of quarterly dividend.

(Amounts in $M)

8

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Conservative leverage at holding level

(1) Excludes accrued interest of $6.6M. (2) Based on debt as of March 31, 2015 and CAFD guidance for the year 2015.

As of March 15

Corporate Cash at Holding level ($M) 84.9

Net Corporate Debt at Holding level ($M) (1) 291.2

Net project finance debt of operating subsidiaries ($M)

3,614.1

Net Corporate Debt / CAFD pre corporate debt service (2) 1.8

Net Corporate Debt / CAFD pre corporate debt service Target

<3

Financing

9

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ABENGOA YIELD

Q2 2014 pro-rata

Q3 2014

Q4 2014

Q1 2015

Q1 dividend

Dividend increase to 0.34$ per share

0.0370

0.2592 0.2592

0.34 (1)

31% increase versus previous quarter

dividend and versus IPO guidance

Dollars per share

(1) Approved by the Board of Directors on May 8, 2015. Dividend per share guidance for the year 2015 provided in the Third Quarter 2014 Earnings Presentation of $1.60, consisting of $0.34 per share for Q1 and Q2 and $0.46 for Q3 and Q4.

IPO guidance

10

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ABENGOA YIELD

Honaine (26%) Skikda (34%)

Helioenergy 1/2 (30%)

Shams (20%)

ATN2 (40%)

2/3 of second drop-down executed

$9M incremental CAFD before finance expenses related to acquisition financing

$94M purchase price paid already

Shams and ATN2 pending closing

Second drop-down

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Agenda

Updated Guidance 3

Q&A 4

Q1 2015 Results 1

New drop-down Acquisition from Abengoa 2

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ABENGOA YIELD Third drop-down

Remaining 70% in Helioenergy (100 MW)

250 MW solar: Helios and Solnovas

Strong track record, between 2 and 5 years in operation

5 year dollarized assets through planned currency swap with Abengoa

Kaxu (51%), 100 MW solar

Contract signed with Abengoa, subject to obtainment of waivers where required and entry into definitive documentation

$63M run-rate incremental CAFD before finance expenses related to acquisition financing, CAFD yield 9.4%

$669M purchase price. Financing already secured with $670M proceeds from capital increase priced at $33.14 per share, pursuant to a private placement resulting in 20,212,260 new shares issued

Call Option signed with Abengoa in December exercised

Transaction approved by the Boards of Directors of ABY and Abengoa

$669M acquisition from Abengoa of 450 MW renewable energy assets with significant accretion already financed

13 Note: assuming a € - US$ exchange rate of €1.00=$1.09

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ABENGOA YIELD Helios, Solnovas and remaining

70% of Helioenergy 1/2

14

Helios (100 MW), Solnovas (150 MW) and remaining 70% of Helioenergy 1/2 (100 MW)

Good track record demonstrated: in commercial operation since 2010 and 2012 using parabolic trough technology identical to the existing assets

Management and operational synergies with existing solar assets in Spain

20, 22 and 23 years regulated revenue. Kingdom of Spain rating BBB (S&P), Baa2 (Moody’s), BBB+ (Fitch)

5 years CAFD in U.S.$ considering the proposed currency swap

Project finance in place for each asset

Three Solar Complexes Located in the South of Spain with proven track record and operational synergies, managing euro exposure

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ABENGOA YIELD Kaxu

15

51% in a 100 MW solar plant in the Kalahari Desert in South Africa

Solar irradiation higher than in the U.S. Southwest

Very strong local partner, IDC (fully owned by the South African government)

20 year power purchase agreement with Eskom with Department of Energy’s guarantee (BBB-, Baa2, BBB)

Project finance in place

Commercial operation reached in Q1 2015

A 100 MW solar plant in a very high radiation area with an ideal local partner

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ABENGOA YIELD Currency hedge

16

Third drop-down assets acquired in

Spain

Existing assets in Spain

Kaxu (South Africa)

Operating currency Coverage

Euro 5 years hedged

Euro 5 years hedged

Rand Local inflation price adjustment

mechanism in the PPA 7% of portfolio1

No Euro exposure after this transaction for 5 years

(1) Based on 2016 CAFD pro forma of the acquisition of third drop-down assets.

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ABENGOA YIELD Rationale for currency swap

of European assets

17

Increase in exposure to European assets without Euro exposure in a moment with regulatory certainty and marked up-tick in interest by international and strategic investors

Currency swap with Abengoa is a very efficient structure:

No use of banking / credit lines

Natural hedge with a counterparty that operates in Euro but receives U.S.$ from ABY

All existing and new drop-down assets with CAFD in €

Spot on date of acquisition

5 years

Each quarter with distributions from Euro denominated assets

Scope

Exchange rate

Term

Delivery

ABY re-affirms commitment to maintain >90% US$ CAFD

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ABENGOA YIELD

Sector

Geography

Portfolio overview after drop-down 2 and 3

18

Currency 1

91% of long term interest rate exposure fixed or covered

<1% commodity exposure

RoW

North America

South America

Europe

Water

Transmission

Conventional

Renewable

66% 15%

16% 3%

44%

27%

19%

10%

93% US$

7%

Other

Highly diversified portfolio in dollars with limited interest rate and commodity exposure

(1) Including the effect of the currency swap to be signed with Abengoa. Note: all amounts based on 2016 CAFD pro forma of third drop-down from Abengoa.

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ABENGOA YIELD

(1) Based on Moody’s rating. Offtakers for Quadra 1&2, Honaine and Skikda are unrated. Offtaker for ATN and ATS is the Ministry of Energy of the Government of Peru and for Spanish assets is the Government of Spain.

(2) Weighted by 2016 CAFD pro forma of third asset drop-down.

High Quality Offtakers(1)

Investment grade counterparties

# of assets by offtaker rating

Weighted(2) average

remaining life: 23 years

Long-Term Contracts Remaining Contract Terms (years) as of December 31, 2014

Assets with unrated off-takers represent less than

4% of the CAFD

19

Stable cash flows from long-dated contracts with investment grade off-takers

Long contracts with credit worthy counterparties providing stable and predictable cash flows

18

19

19

20

20

20

20

20

22

22

23

23

23

23

25

26

29

29

ACT

PS 10/20

Palmatir

Skikda

Quadra 1&2

Kaxu

Cadonal

Solnova 1/3/4

Solacor 1/2

Helios 1/2

Honaine

Palmucho

Helioenergy 1/2

Solaben 2/3

Mojave

ATN

Solana

ATS

A3: 5

N/A: 3

Baa2: 10

Low dependence on natural resources

61% Availability-

based

39% Production-

based

61% of total expected CAFD

expected to come from assets with

contracts based on availability

and not on production

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20

Agenda

Q&A 4

Q1 2015 Results 1

New drop-down Acquisition from Abengoa 2

Updated Guidance 3

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ABENGOA YIELD Updated dividend guidance

Increase in our Dividend per Share expected by up to 9% in 2016 with respect to previous guidance as a result of the third acquisition

from Abengoa

2015 E 2016 E

142 170-178

1.60 1.92-2.00

1.60 2.10-2.15

Current DPS guidance ($)

New revised DPS guidance ($)

8-9% increase in DPS

guidance for 2016

30-34% growth in DPS

expected in 2016 vs 2015

Current CAFD* guidance (M$)

(*) Reflects expected CAFD after interest on corporate debt at the holding level company incurred to finance the acquisitions. 21

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ABENGOA YIELD

2016E IPO* 2016

2015 IPO 2015 2020

Mid term guidance

1.60

2.10-2.15 +X

%

18% 2015 vs 15-IPO

Current ROFO agreement with Abengoa

Abengoa developing new assets will increase further the pipeline of projects

Potential third party acquisitions

Dividend per share

> + 20% yearly

1.36

(*) Estimated on the basis of IPO guidance of 1.69 for the twelve months ending on June 30, 2016

+X% +30-34% 2016 vs 15

30-34% yearly DPS growth expected in 2016 and 12-15% yearly growth targeted beyond 2016, resulting in >20% since IPO

+X% +12-15%

yearly

1.70

22

Dollars per share

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ABENGOA YIELD

Potential growth sources over the next few years

San Antonio (SAWS)

Wind

Photovoltaics

3 conventional assets with large synergies with existing asset: A3T, A4T, Norte 3

Zapotillo

Other opportunities in different sectors

Atacama 1

Atacama 2

Peru

Brazil

Chile

US Renewables & Water Mexico

Transmission lines South America Chile Solar

23

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ABENGOA YIELD ROFO assets under operation or

construction

Sector Asset Stake Country Estimated CAFD run rate (M$)

Tenes 51% Algeria

~ 20-30 Nungua 56% Ghana Agadir 51% Morocco SAWS (San Antonio) 100% US Zapotillo 100% Mexico

A3T 100% Mexico

~ 110-115 A4T 100% Mexico Norte 3 100% Mexico SPP1 51% Algeria Leasing Nicefield 100% Uruguay

ATN2 40% Peru

~ 80-85 ATE XVI-XXI 100% Brazil ATE XXII-XXIV 100% Brazil ATN 3 40% Peru

Solaben 1/6 100% Spain

~ 110-130

Spain PV >90% Spain Khi 51% South Africa Ashalim 50% Israel Atacama I 100% Chile Atacama II 100% Chile Xina 40% South Africa

Total ~ 310-360

More than US$300M estimated in CAFD after the third drop-down w/o assets under development by Abengoa

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ABENGOA YIELD In Summary

Acquisition of solar assets ($669M) with long tenors (22 years average) and US$ cash flows

1

Consistent with initial IPO investment thesis

Increases US$ currency in portfolio up to 93%1

Third drop-down in less than one year: proves that the Abengoa /ABY relationship works

2

Long-term visibility on potential ROFOs from Abengoa

Abengoa’s JV with EIG (Abengoa Project Warehouse 1) provides additional firepower

Solid trading

3

Q1 results ahead of IPO forecasts

Mojave operating at full capacity

Attractive acquisition yield of 9.4%, implying a significant DPS accretion

4

Revised 2016 DPS guidance from US$1.92-2.0 to US$ 2.10-2.15 per share

Growth catalysts

5

Ample debt capacity for acquisitions: below 1.6x net debt/CAFD proforma vs cap at 3.0x

Credit rating coming in short term

Estimated US$ 310-360 M of CAFD visibility in potential new drop-downs

3rd party acquisitions in US$

(1) Considering 5 year currency swap to be signed with Abengoa. 25

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26

Agenda

Q1 2015 Results 1

Updated Guidance 3

New drop-down Acquisition from Abengoa 2

Q&A 4

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ABENGOA YIELD Appendix

27

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ABENGOA YIELD

(1) On September 30, 2013, Liberty Interactive Corporation agreed to invest $300M in Class A membership interests in exchange for a share of the dividends and the taxable loss generated by Solana. (2) Reflects the counterparty’s issuer credit ratings issued by Standard & Poor’s Ratings Services, or S&P, Moody’s Investors Service Inc., or Moody’s, and Fitch Ratings Ltd, or Fitch, respectively. (3) USD denominated but payable in local currency. (4) Refers to the credit rating of Uruguay, as UTE is unrated. (5) During the initial 5-year period, we have the right to receive, in four quarterly installments, a preferred dividend of $18.4 million per year.

Asset Type Gross Capacity Offtaker Rating(2)

Renewable Energy

Years Contract

Left

Solana

Mojave

Solaben 2/3

APS A-/A3/BBB+

PG&E BBB/A3/BBB+

Kingdom of Spain

BBB/Baa2/BBB+

Palmucho

Quadra 1&2 Sierra Gorda Not rated

Endesa Chile BBB+/Baa2/BBB+

Peru BBB+/A3/BBB+

Palmatir UTE BBB-/Baa2/BBB- (4)

Status

Operation

Operation

Operation

Operation

Operation

Operation Electric Transmission

Conventional Power

ATS

Economic Stake

100%(1)

100%

100%

100%

100%

100%

Location

USA (Arizona)

USA (California)

Spain

Chile

Chile

Peru

Uruguay

Currency

USD

USD

Euro

USD

USD

USD

USD

ACT Pemex BBB+/A3/BBB+ Operation 100% Mexico USD (3)

Preferred Instrument -

N/A; cash account & dividend

subordination Brazil USD

Exchangeable Preferred Equity in ACBH

Operation

(3)

280 MW

280 MW

2x50 MW

81 miles

6 miles

569 miles

50 MW

300 MW

$18.4M

p.a.(5)

29

25

23

20

23

29

19

18

-

Cadonal 50 MW UTE BBB-/Baa2/BBB- (4) 20 Uruguay USD Operation 100%

Solacor 1/2 BBB/Baa2/BBB+ 74% Spain Euro

PS 10/20 Euro Spain BBB/Baa2/BBB+ 100%

2x50 MW

31 MW

22

19

Operation

Operation

Kingdom of Spain

Kingdom of Spain

Water Skikda Sonatrach & ADE Not rated Operation 34% Algeria USD (3) 3.5 Mft3/day 20

Honaine Sonatrach & ADE Not rated Operation 26% Algeria USD (3) 7 Mft3/day 23

ATN Peru BBB+/A3/BBB+ Operation 100% Peru USD (3)

362 miles 26

(3)

(3)

Helioenergy 1/2 Euro Spain BBB/Baa2/BBB+ 30% 2x50 MW 23 Operation Kingdom of Spain

70%

Diversified asset portfolio both by business sector and by geography

Sizeable and diversified asset portfolio

28

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ABENGOA YIELD

Capacity 250 MW

Country Spain

Shareholding Abengoa (100%)

COD 2010 Solnovas, 2012 Helios

Offtake

Structure 25 years regulated revenue from state-owned regulators (CNMC)

Currency Euro (dollarized through separate agreement)

Off-taker Kingdom of Spain

Off-taker rating BBB (S&P) / Baa2 (Moody’s) / BBB+ (Fitch)

Revenue Fixed payment based on capacity + variable payment based on net

electricity produced

O&M

Term 20 years

Contractor Abengoa

Project Finance Solnovas

Term 22 years

Amount Solnova 1: €202.8 M as of December 31, 2014

Solnova 3: €197.1 M as of December 31, 2014

Solnova 4: €185.6 M as of December 31, 2014

Cost Solnova 1: Euribor +1.25%; 80% hedged (100% Swap at 4.76%)

Solnova 3: Euribor +1.15%; 80% hedged (30% Swap at 4.34%,

70% Cap at 4.65%)

Solnova 4: Euribor +1.60%; 80% hedged (100% Swap at 4.87%)

Project Finance Helios

Term 20 years

Amount Helios 1: €139.7 M as of December 31, 2014

Helios 2: €140.8 M as of December 31, 2014

Cost Euribor +3.50% until October, 2016; Euribor + 3,75% until October

2018, Euribor 4,25 of 75% hedged (100% Swap at 3.85%)

Assets Overview Description

Assets Location

Solnova 1/3/4 is a 150 MW solar complex, located in the municipality of Sanlucar la Mayor, Spain

Helios 1/2 is a 100 MW solar complex, located in Ciudad Real, Spain

Helios and Solnovas

Solnova 1/3/4

Helios 1/2

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ABENGOA YIELD

Capacity 100 MW Solar parabolic trough

Country South Africa

Shareholding Abengoa Solar South Africa (51%); IDC (29%); BEE Community

Trust (20%)

COD Q1 2015

PPA Take or Pay contract

Term 20 years from COD (extendible)

Currency ZAR

Off-taker Eskom Holdings with DoE guarantee

Off-taker rating Moody´s (Baa2)/ S&P (BBB-)/ Fitch (BBB)

EPC Provider Abengoa

O&M

Term 20 years

Contractor Abengoa

Project Finance

Term 18 years

Amount ZAR 5,860 M (~ $486 M)

Cost - Start date: 12/15/15

- End date: 12/15/30

- Rate: ~11% (considering hedge)

100 MW solar parabolic through with storage capacity up to 3 hours, located in Pofadder (South Africa)

Financing agreement for 18 year loan signed on 2012

In commercial operation since Q1 2015 (March)

Kaxu

Kaxu

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Assets Overview Description

Assets Location