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Sustainable Energy Investment Forum Webinar

September 2018

FINANCING ENERGY EFFICIENCY, THE INVESTORS' PERSPECTIVE

COMMERCIAL IN CONFIDENCE

2 • COMMERCIAL IN CONFIDENCE

WHO WE ARE

STORRUN WINDFARM| Jämtland, Sweden

SPECIALIST FUND MANAGER INVESTING RETIREMENT SAVINGS IN INFRASTRUCTURE

AND REAL ASSETS

OUR RESPONSIBLE INVESTMENT POLICY

Notes:

As at 30 June 2018

20 yrs

TRACK RECORD

OF INFRASTRUCTURE

INVESTING

PROVEN

€5.9bn

DIRECT

INFRASTRUCTURE

INVESTMENTS MADE

SINCE INCEPTION

SCALE

12

NUMBER OF

COUNTRIES WITH

INVESTMENTS

GLOBAL

92

INVESTMENTS

COMPLETED TO DATE

EXPERIENCED

OPERATES IN ACCORDANCE WITH THE UN GLOBAL

COMPACT’S 10 PRINCIPLES

OPERATES IN COMPLIANCE WITH THE INTERNATIONAL

FINANCE CORPORATION (IFC) PERFORMANCE

STANDARDS

SIGNATORY TO THE UNITED NATIONS PRINCIPLES FOR

RESPONSIBLE INVESTMENT (UNPRI)


SUSTAINABLE ENERGY INVESTMENTS EXPERIENCE

WE INVEST IN MID MARKET ASSETS AND BUSINESSES PROMOTING SUSTAINABILITY AND EFFICIENCY

DISTRICT HEATING ENERGY FROM WASTE SMART METERSCONNECTED LED STREET

LIGHTS

› Carbon reduction agenda

› Urbanisation

› Optimisation of heat supply

chain

› Population rise

› Circular economy

› Reduce landfill and trucking of

waste long distances

› Technological innovation

› Changing user needs

› Network optimisation

› Phase out of inefficient lamps

› Ageing infrastructure

› Smart City and Internet of

Thing connectivity

MA

RK

ET

DR

IVER

SP

OR

TFO

LIO

C

OM

PA

NY

Progetto

inNovalux


MACRO TRENDS IN INFRASTRUCTURE

Our cities are growing at an

unprecedented speed

Concerns over the price,

availability and sustainability

of increasing needs for energy

and resources

Population Rise And Urbanisation

Surging Demand For Energy And Resources

Increasing competition among

cities for people, businesses

and opportunities

Opportunities to improve

quality of life and allow more

efficient use of resources and

provision of services

Competition for People and Businesses

Growing Connectivity and Digitisation

CHALLENGES OPPORTUNITY

INFRASTRUCTURE OWNERS ARE FACED WITH SIGNIFICANT CHALLENGES AND RAPID CHANGE


FINANCING SUSTAINABILITY

THE SCALE OF INVESTMENT NEEDS TO REACH THE 2030 CLIMATE AND ENERGY TARGETS WILL INEVITABLY REQUIRE AN EXTENSIVE INVOLVEMENT OF THE PRIVATE SECTOR

UNLISTED INFRASTRUCTURE DRY POWDER BY GEOGRAPHIC FOCUS (USD BN) 2

Infrastructure Investors have

$160bn of dry-powder

Sources: : (1) European Investment Banks (2) Preqin

INVESTMENT NEEDS IN THE EU’S ENERGY SECTOR (€ BN)

Investment gap of €100bn

per year compared to

current investments


THE BENEFITS FOR THE END USERS

Sources: : McKinsey Global Institute, June 2018

THE TRANSITION TOWARDS LOW-CARBON AND MODERN INFRASTRUCTURES WILL CREATE A MORE EFFICIENT, RESPONSIVE AND SUSTAINABLE ECONOMY

25-80 litres

OF WATER

SAVED PER PERSON

PER DAY

WATER CONSERVATION

30-130 Kg/person

ANNUAL REDUCTION

IN UNRECYCLED

SOLID WASTE

WASTE REDUCTION

30-300 lives

SAVED EACH

YEAR IN A CITY OF

5 MILLION

HEALTHCARE

15-30 min

SHAVED

OFF THE DAILY

COMMUTE

MOBILITY

25%

INCREASE IN THE PERCEIVED LEVEL OF

CONNECTION BETWEEN RESIDENTS

AND LOCAL GOVERNMENTS

ENGAGEMENT AND COMMUNITY

10-15%

LOWER GREENHOUSE

GASES EMISSIONS

ENVIRONMENTAL

20-35%

FASTER EMERGENCY

RESPONSE TIMES

SAFETY

1-3%

REDUCTION IN

CITIZEN EXPENDITURES

COST OF LIVING

30-40%

FEWER CRIME

INCIDENTS

SECURITY

COMMERCIAL IN CONFIDENCE • 7

THE ROLE OF PRIVATE INSTITUTIONAL INVESTORS

SUCCESSFUL TRANSACTIONS ARE BASED ON AN OPTIMAL ALLOCATION OF RISKS AND RESPONSIBILITIES FOR THE DELIVERY, OPERATION, AND MAINTENANCE OF AN ASSET OVER THE LIFECYCLE OF THE PROJECT

END-USER / PUBLIC SECTOR DEVELOPER / KEY CONTRACTOR INSTITUTIONAL INVESTORS

PROJECT DELIVERY

GUARANTEED ENERGY SAVINGS AND

PERFORMANCE

TECHNOLOGICAL RISK

LONG-TERM LIQUIDITY AND FUNDING

COUNTERPARTY RISK (DELAYS OR DEFAULT

ON PAYMENTS)

SCALE-UP OF BUSINESSES / CAPITAL

RECYCLING

DEFAULT OF DEVELOPER / KEY CONTRACTOR

PROJECT DELIVERY

CONSOLIDATION OF PRIVATE FINANCING


PERFORMANCE

DEMAND AGGREGATION

DEFINE STANDARDS AND REGULATION

DISCRIMINATORY CHANGES IN LAW

ACCESS TO FUNDING

CONSOLIDATION OF PRIVATE FINANCING

INTERFACES WITH PUBLIC SECTOR ENTITIES

GO-TO-MARKET / TENDER

DESIGN AND CONSTRUCTION


PERFORMANCE


LONG TERM VALUE

› OVERCOME SHORT-TERM BIAS

› ENSURE RESILIENCE AND FLEXIBILITY

› CAPTURE A BROAD SET OF POSITIVE

EXTERNALITIES

UNLOCKING PRIVATE INVESTMENTS

SUSTAINABILITY PROJECTS CAN RAISE SOME CHALLENGES FOR TRADITIONAL FUNDING MODELS

DEMAND AGGREGATION

› ATTRACT THE REQUIRED EXPERTISE

› ECONOMIES OF SCALE

› LIQUIDITY OF THE INVESTMENT

STANDARDISATION

› STREAMLINE PROJECT REVIEWS AND

GO-TO-MARKET PHASE

› MINIMISE STRUCTURING AND SET-UP

COSTS

› FUTURE PROOF THE INVESTMENT


CASE STUDY – THE ITALIAN STREETLIGHTING SECTOR

Sources: : (1) CDP, “Rapporto sulla Finanza Locale”, August 2016 (2) EY, 2011

ITALY COUNTS C.10 MILLION STREET LIGHTING POINTS, 20% OF WHICH ARE NOT COMPLIANT WITH THE CURRENT REGULATION AND THE ENERGY EFFICIENCY TARGETS1

DISTRIBUTION OF ITALIAN MUNICIPALITIES2AVERAGE STREET LIGHTING POWER PER POLE IN THE EU1


Designed for small

ITALIAN MUNICIPALITIES

with less than 10,000 inhabitants

Planned and executed by

LEADING NATIONAL and

INTERNATIONAL COMPANIES

DOES NOT REQUIRE ANY PUBLIC

SUBSIDY nor additional costs for

the municipality

The project enables a sustainable

and modular growth towards a

DIGITAL ECONOMY

CASE STUDY – THE INNOVALUX PORTFOLIO

WHITEHELM IS PROVIDING FINANCIAL SUPPORT TO A PRIVATE CONSORTIUM FOR THE MODERNIZATION OF PUBLIC LIGHTING INFRASTRUCTURE, INCLUSIVE OF ELECTRICAL CABLING AND NEW DIGITAL SERVICES

100%

PRIVATE FUNDING

ARRANGED BY WHITEHELM

EQUITY PARTNERSHIP

€10m

PER CLUSTER OF

MUNICIPALITIES

MINIMUM INVESTMENT

15-20 YRS

PAYBACK OF THE

INVESTMENT IN LINE

WITH THE LIFE OF THE

PROJECT

LONG-TERM


THANK YOU

MATTEO ANDREOLETTI

Head of Infrastructure Equity Europe and North America

Tel: +44 207 183 6120

E: [email protected]

CONTACT DETAILS


Whitehelm consists of the following companies; Whitehelm Capital Pty Ltd (ACN 008 636 717), Australian Financial Services Licence 244434; and Whitehelm CapitalLimited, authorised and regulated by the Financial Conduct Authority (FCA) FRN 599417, Registered No 06035691 and Registered Office: 15th Floor, City Tower, 40Basinghall Street, London EC2V 5DE (together, ‘Whitehelm’).This document has been issued and approved by Whitehelm for information purposes only without regard to any particular user’s investment objectives, financialsituation, or means and Whitehelm is not soliciting any action based upon it. This material is not to be construed as a recommendation, or an offer to buy or sell, or thesolicitation of an offer to buy or sell any security, financial product, instrument, asset or business as described herein and shall not form the basis of any contract. Anyinformation contained herein is directed at Eligible Market Counterparties and Professional Clients only. It is not directed at, or intended for Retail Clients as defined bythe FCA.

This document contains commercial-in-confidence information and should not be disclosed to any party. The forecasts and investment analysis contained within thedocument are preliminary and our professional assessment based on available historical data (the accuracy of which has not been independently verified byWhitehelm) but, by their nature, cannot be guaranteed and should not be relied on as an indication of future performance. Actual results could vary from theanticipated performance referred to herein, and such variations that may arise could be material. This document has been prepared by Whitehelm solely forinformation purposes from data supplied by other parties and includes certain statements, estimates and projections provided by persons other than Whitehelm and isbeing furnished through Whitehelm solely for information purposes to assist the recipient in deciding whether to proceed with further analysis of the matters describedherein. In furnishing this information, Whitehelm undertakes no obligation to provide the recipient with access to any additional information or to update or correct theinformation provided herein. Except as provided for in a written agreement between the parties, neither the receipt of this information by any person, nor anyinformation contained herein constitutes, or shall be relied upon as constituting, the giving of investment advice by Whitehelm to any such person.

Opinions expressed in this document are based on assumptions and contingencies mentioned in this document that involve known and unknown risks anduncertainties and other factors which are beyond the control of Whitehelm. Our opinions may change without notice. To the extent permitted by law, Whitehelm andits officers, employees, agents, associates, and advisers accept no liability whatsoever to any third party in relation to any matter arising from this document.

US INVESTORS

This document does not contain or constitute, and should not be construed as, an offer to sell or the solicitation of an offer to buy securities in the United States. Thesecurities referred to herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or any U.S.state securities law. The securities may not be offered or sold within the United States or to, or for the account or benefit of, any U.S. Person (as such terms are definedin Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.Any failure to comply with these restrictions is a violation of U.S. federal or applicable state securities laws.

The securities have not been recommended by, and this document has not been filed or registered with, any United States federal or state securities commission,including, but not limited to, the United States Securities and Exchange Commission or any United States or other statutory or regulatory authority. Furthermore, theforegoing authorities have not passed upon the merits, confirmed the accuracy or determined the adequacy of this document or the information contained herein.Any representation to the contrary is a criminal offence.

UNITED KINGDOM AND THE REST OF THE EUROPEAN ECONOMIC AREA

Neither this presentation not any accompanying letter or any other document have been delivered for approval to the Financial Conduct Authority in the UnitedKingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000 (FSMA)) has been published or is intended to bepublished in respect of the securities. Accordingly, the securities may not be offered or sold in the United Kingdom by means of this document, or accompanying letteror any other document except to persons who are qualified individuals within the meaning of section 86(7) of FSMA.

DISCLAIMER


DISCLAIMER

LONDON15th Floor, City Tower

40 Basinghall Street

London EC2V 5DE UK

+44 207 183 6120

CANBERRALevel 1

39 Brisbane Avenue

Barton ACT 2600

+61 2 6273 1222

SYDNEYLevel 12, Aurora Place

88 Phillip Street

Sydney NSW 2000

+61 2 9220 0600

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