China Wind Power Investor Presentation September 2010
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China Wind Power International Corp. is developing wind power projects in Heilongjiang Province, China to capitalize on growing demand for renewable energy. Their current portfolio includes 546 MW over 5 phases, with Phase 1 already in commercial production. The presentation outlines China's commitment to wind power, the company's exclusive rights in Du Mon County, guaranteed power purchase agreements, and projected returns of 12-14% IRR. Management is experienced in wind power development and financial operations in China.
China Wind Power Investor Presentation September 2010
- 1. Investor Presentation Investor Presentation September 2010 September 2010 TSX-V: CNW TSX-V: CNW
- 2. Forward-looking statements This presentation contains “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements may include financial and other projections, as well as statements regarding future plans, objectives or economic performance, or the assumption underlying any of the foregoing. Forward-looking information involves significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking statements and accordingly, should not be read as guarantees of future performance or results. Accordingly, investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertakes no obligation to update any forward-looking statement or statements to reflect information, events, results, circumstances or otherwise after the date on which such statement is made or to reflect the occurrence of unanticipated events, except as required by law, including securities laws. 2
- 3. About China Wind Power International Corp. China Wind is uniquely positioned to capitalize on the growing demand for wind energy in China •3 3
- 4. A tremendous opportunity for following four main reasons: Demand China Exclusivity Du Mon County Guaranteed Power Purchase Agreement Profitable 12-14% IRR, and higher for future projects •4 4
- 5. China Overview • Rapid industrialization • Looming energy shortage • Facing one of the world’s biggest environmental crisis 5 Source: IEA
- 6. China’s commitment to wind power 2008 2009 2010 2020 12.0 GW 25.8 GW 40 GW 100 GW China: 4th 2009 2nd today 1st tomorrow 6
- 7. We make it, they take it Guaranteed demand • National Renewable Energy Law, effective January 2006 • Grid is obligated to purchase all output! for China Wind • Heilongjiang Provincial Power Grid must buy our electricity 7
- 8. Our current focus: Heilongjiang Province Beijing Exclusive rights to Shanghai Wind Power Generation Du Mon County, Heilongjiang Heilonjoang Province Population: ~38 million Annual electricity use by 2010*: 74 million MWh 8 * forecast 8
- 9. Favourable location Power Grid <2km Beijing Shanghai Wind Speed 70m: 6.9-7.5 m/s Well Located • Flat, solid ground • Easy access with roads and highways 9
- 10. Our portfolio 546 MW over 5 development phases: Beijing Shanghai Included in power grid master plan Longer-term potential for building out 1,150 MW 10
- 11. China Wind — Phase 1 Phase 1: 49 MW Phase 2: 49.5 MW Phases 3-5: 448.5 MW Status Turbines Financing Completed Commenced 26% 34 turbines equity commercial producing Production 74% power Dec. 2009 debt 360M RMB (US$53M) of debt. Interest rate: 5.94% 67 GWh generated by end of June 2010. 11
- 12. China Wind — Phase 2 Phase 1: 49 MW Phase 2: 49.5 MW Phases 3-5: 448.5 MW Status Turbines Financing Completed 15 35.15% Construction installed, equity half way 20 on 65.85% completed order bank* 330 million RMB bank loan has been approved at a variable Interest rate. 12
- 13. Turbine Overview: Phase 1 and 2 DW1.0/56 HFDY1500/77 DT-1500 Two-Bladed Directly Driven Doubly Fed 4 30 Phase 1 Phase 1 Phase 2 6 10 19 Phase 2 (Installed) (10 installed) 56% of all globally installed wind power equipment is manufactured in China (2007) 13
- 14. Phase 2: project timeline Q1/09 Q3/09 Q4/09 Q3/10 Q4/10 Construction Equity Turbines Debt Construction commenced financing installation financing completed commenced. approved All foundations completed 14
- 15. China Wind — Phases 3 to 5 Phase 1: 49 MW Phase 2: 49.5 MW Phases 3-5: 448.5 MW Status Turbines Financing (targeted) 30% Phase 3 Phase 4 & 5 equity close to get feasibility 299 turbines final studies planned 70% approval underway debt Phase 3 projects (198MW) will be financed using EPC Contract. 15
- 16. Phases 3 to 5: project timelines Phase 3 Phase 4 Phase 5 （Sino-Denmark) ~100MW ~150MW 198 MW Q4/11 Q4/12 Q3/13 Construction Construction Construction completed completed completed Q1/11 Q1/12 Q3/12 Construction Construction Construction commences commences commences Construction phase ~ 12 months •16 16
- 17. Financial Results for Phase I Revenue Adjusted EBITDA (millions) (millions) $1.2 $1.2 $0.8 $0.6 $0.5 $0.5 Q3/FY10 Q4/FY10 Q1/FY11 Q3/FY10 Q4/FY10 Q1/FY11 • Phase I Commercial production begun in Q4 FY2010. • Adjusted EBITDA excludes stock-based compensation 17
- 18. Business model: costs and revenues* Total ~49M Project Cost Total Revenue for 49MW (including installation) Phase 1 & 2 * Phase 3 ** Electricity Production • Production: 110,743 MWh/yr Turbines/towers: US $53.6M US $46.8M • Power Price: US$89/MWh Construction: US $13.1M US $10.5M • Revenue: US$8.5M /yr • 20 Years PPA Interest: US $4.1M US $2.9M Other: US $2.2M US $4.2M * Based on 20 years average for the Phase I (49MW) or II (49.5MW). ** Based on 20 years average for Total: US $73.0M US $64.4M (~12% lower) one 49.5 MW wind farm of the Phase 3 (total 4 wind farms, 198MW). 18
- 19. Targeted project economics for Phase I & II * (20 year average) Installed capacity 49MW Capacity factor 26.31% Revenue: wind power US $8.5M Revenue: carbon credits US $1.8M Total revenue US $10.4M EBITDA US $8.3M Total profit after tax US $3.2M Annual cash flow to equity US $3.9M Capital cost/MW Levered equity IRR US $1.5 million 12-14% 19 * Based on average 49 MW project for Phase I and II.
- 20. Recent Milestones • Completed construction of Phase 1 • Commenced commercial production • Generated more than 67 GWh to date • Total sales of $1.2 million for Q1 FY2011 • EBITDA* of $598,000 for Q1 FY2011 • Approval of Grid connection for Phase 3. *Excludes stock compensation charges 20
- 21. Management and Board of Directors Jun Liu Chief Executive Officer and Director • 20 years of experience including executive positions with subsidiary companies of Daqing Petroleum Administration Bureau, China National Petroleum Corp. Wendell Zhang Chief Financial Officer • 9 years public accounting experience with Ernst & Young China and Canada. Walter Huang Senior Vice President and Director • Co-founder and partner of a U.S. investment firm and many years of investment and financial industry experience, especially in China. Zhijie Song Chief Engineer • 30 years experience in the power industry and has held a variety of technical executive positions. 21
- 22. Management and Board of Directors Honliang Xu Independent Director • Chairman of the Board of China Fulin Wind Power Development Corp. Linda Dundas Independent director • Risk Management and Financial Sector Regulation Expert with Royal Bank of Canada。 Joshua Gerstein Independent Director • Merchant banker with Cervello Capital 22
- 23. Demand China Exclusivity Du Mon County Guaranteed Power Purchase Agreement Profitable 12-14% IRR 23
- 24. Walter Huang Walter Huang Senior Vice President Senior Vice President (+86) 13918002882 (China) (+86) 13918002882 (China) (+1) 847-323-7226 (US) (+1) 847-323-7226 (US) • • [email protected] [email protected] • www.ChinaWindPowerInternational.com • www.ChinaWindPowerInternational.com twitter.com/ChinaWindPower twitter.com/ChinaWindPower