Energy Savings Opportunity

• Electricity rates in the Philippines are second highest in Asia (Singapore is highest)

• 40 – 60% of energy costs at most industrial plants in Philippines come from electric motors

• 50%+ electricity wasted on motor systems due to: Inefficient ‘induction motor’ technology Inefficient Drive systems Power Anomalies Lack of maintenance (only ‘fixed when broken’)

2

Motor System Inefficiencies

3

Induction Motor

Power Anomalies

DriveSystem

Energy Efficiency Solutions

• Replace Induction Motors (IM) with Permanent Magnet Synchronous Motors (PMSM), Super Premium, or IE4 Efficiency Class.

• Correct Power Anomalies• Refurbish and recalibrate Drive System

4

Motor Electrical Losses

5

PMSM: Rotor loss & rotor iron loss are eliminated = energy savings

Efficiency is equivalent to IE3 or NEMA Premium

PMSM

Motor Savings (7200 operating hours/year)

6

Existing power drawn

Rewound Motor

Rewound + EMDS

Upgrade to HEM

HEM + EMDS

0

20000

40000

60000

80000

100000

120000

140000

160000

kWhr, 45kW

kWH

rs

26%41%

61%

Other Technologies

7

• Eliminate Power Anomalies

• Improve Drive System efficiency

Under an Energy Savings Performance Contract (ESPC)

What is ESPC?

• Develops, finances and implements end-use energy efficiency projects (EEPs) at energy consuming facilities (Hosts) and risks payment for its services on actual savings performance of the EEPs.

9

A performance-based contract with an Energy Services Company (ESCO) that:

ESPC Illustration

E + O&M

E + O&M E + O&M

HOST Profit

ESA ServicesFinancingDebt Servicing

HOSTProfit

E+O&MCost Savings

Hos

t Cas

h flo

wBefore During After

ESCO “Turnkey” Services

• Investment Grade Energy Audit (IGA)

• Comprehensive Engineering Design

• Project Financing

• Complete Installation and Commissioning

• Long-term Performance Guarantees

• Savings Measurement &Verification (IPMVP)

• Ongoing Equipment Maintenance

11

Who is Machine HealthCareTM?

• MHC is a local ESCO that implements and funds new energy-efficient industrial motor systems under the ESCO Shared Savings model.

• Under Shared Savings, MHC provides 100% of all upfront capital cost for it to implement the Motor Systems in exchange for receiving a majority of the Savings over the specified ESPC term.

Host approves Project Concept

Host approves Project Concept

MHC Develops initial“Project Concept” Proposal

MHC Develops initial“Project Concept” Proposal

No HostPayment

Host signs LOU for MHC to conduct IGA with agreed “Minimum Criteria” as basis for “IGA Fee”

Host signs LOU for MHC to conduct IGA with agreed “Minimum Criteria” as basis for “IGA Fee”

IGA completed that meets“Minimum Criteria”

IGA completed that meets“Minimum Criteria”

MHC Begins Project InstallationMHC Begins Project Installation

NO

YES

Host signs ESA with MHCto implement Project per IGA

Host signs ESA with MHCto implement Project per IGA

YES

NO

Host PaysIGA Fee

No HostPayment

NO

YES

MHC Project Development Process

YES

MHC MANAGEMENT TEAM

LEONARDO A. DAYON• President, Machine HealthCare• Founder, ALPS Maintaineering Services, Inc.• Professional Electrical Engineer

JESSIE L. TODOC• Project Manager, Machine HealthCare• Registered Electrical Engineer• MBA

14

MHC Principals

Thomas K. Dreessen • Formed ESCOs in 10 Countries & developed EEPs in 24 Countries • Financed over $200 million of “savings-based” EEPs including the first ones in eastern Europe in 1995• Created SPC “paid-from-savings” structure and debt guarantee mechanisms for EE financings in Mexico• Created/conducted EE loan training program Mexican banks• Past President of US National Association of ESCOs• Past Board Member & Chairman of International Committee for

the Alliance to Save Energy• Chairman of Evaluation Efficiency Organization (“EVO”)• BBA - Accounting; MBA and a Certified Public Accountant

Bruce K. Colburn, Ph.D., P.E.• 30+ years of experience in energy engineering and development of EEPs for ESCOs• Involved in developing over $300 million of EEPs including:

- $ 10 Million project Brazil Aluminum plant

- Design of $12 million ESCO project at Russian Steel Mill

- Implementing a $4 Million ESCO project @ GE Aircraft.• Former principal for 13 years of Texas Energy Engineers• Member of U. S. Association of Energy Engineers• Ph.D. - Electrical Engineering

MHC Principals

MHC Core Strengths

• Management Team with deep experience in local motor implementation combined with international ESCO, project finance and industrial EEP expertise

• Unique financial and industrial technical know-how;• Access to best-in-class international and domestic

technologies that deliver most cost-effective energy efficieincy solutions;

• Access to cost effective capital for funding EEPs on a Shared Savings basis.

17

Host Benefits from ESPC

• Positive Cash Flow: No upfront capital to develop/implement EEP; Savings payments from current operating costs

• Ownership transferred to Host at end of ESPC Term

• No development or implementation costs or risks

• Savings are Measured & Verified per IPMVP• Improved competitiveness and “green” footprint