The “Negris” Phenomenon – Keys to Running a Successful Indigenous Power Plant

Presentation to The CSL/FCMB 2011 Investors Conference by:

Alhaji Musa OjeifoGroup COO, Negris Group

September 2011Privileged and Strictly ConfidentialFor Discussion purposes only – Not For Distribution

Table of Contents

PagesI. Introduction to Negris Group 3II. Indigenous Power Plant Model 7III. Benefits of Negris IPP 11IV. Negris IPP Structure 15V. Projects 18VI. The Negris Advantage 24VII. Present/Future Growth 25

I. Introduction to Negris Group

Introduction to Negris Group

• Established since 1980, Negris prides itself as the foremost indigenous energy, oil, and gas service company in Nigeria

• Negris plays a leading role in both the Engineering, Procurement and Construction (EPC), and Total Asset Management of Turnkey Projects relating to Power

• Negris Limited and Energy Company of Nigeria PLC (ENCON) are business units of Negris Group which have specialized interests in the energy and manufacturing sectors of the Nigerian economy

Introduction to Negris Group

Our Mission: To provide services and products that enhance customers’ plants and facilities at optimum cost of ownership while remaining friendly to the environment

Our Vision: To maintain the leadership position as the foremost indigenous energy services provider

Introduction to Negris Group

NEGRIS INVESTMENTS LIMITED

NEGRIS LIMITED• Engineering, Procurement, Construction (EPC)• Operation & Maintenance (O&M)• Oil, Gas, and Energy Total Asset Management

Energy Company Nigeria PLC(ENCON PLC)

•Independent Power Producers

OKIPP Limited(formerly NNMC, Oku-Iboku)• Sales and Production of Newsprint and Allied products

II. Negris Power Plant Model

Build, Own, & Operate (BOO)

• Utilizing ENCON as a vehicle, Negris is able to build power plants using the most efficient and cost-effective technology to provide the power required by our customers

• The entire facilities required to provide power is owned by ENCON, while the customer’s responsibility is to pay for electricity off-take on a monthly basis

Build, Own, Operate, & Transfer (BOOT)

• This is similar to BOO above except that the contract of power supply includes the transfer of the generating facilities to the customer at a mutually agreed value at the end of the contract tenure

Acquire & Operate (A&O)

• ENCON acquires the existing power generation facility (diesel or gas-fired plant) of the customer at mutually agreed price and use same to meet its requirements

• Where improvement is required to increase the operational efficiency or output of the power facility we undertake same

•This scheme is ideal for companies who wish to outsource and focus their time and resources on their core-businesses

III. Benefits of ENCON IPP

Benefits of ENCON IPP

• Benefit of expertise of Negris in handling the latest technology for power generation

• Outsourcing allows management to apply its time and resources to its core business areas

• It releases capital that otherwise would have been tied down for other core business needs

Benefits of ENCON IPP

• It provides enormous cost-savings – usually, the savings become a source of finance for the entire business operations while significantly improving profitability and cash flow

• It creates a quasi off-balance sheet finance as the customer enjoys the use of capital intensive facility without actually owning or financing it

Benefits of ENCON IPP

• It therefore improves the business gearing while also increasing the capacity for debt capital for the core business

IV. ENCON IPP Structure

Negris IPP Structure

TURBINES / GAS ENGINES OEM.•OEM OF THE DUAL- FUEL GENSET•COMMISIONING OF THE PLANT•OVERHAUL SERVICES•SPECIALIST CALL -OUT

NATURAL GAS SUPPLIER

NEGRIS INVESTMENTS LTD

• PROJECT PROMOTER

ENERGY COMPANY NIGERIA PLC / SPV

•BUSINESS PERMIT•CONTRACT NEGOTIATION•PRE-CONSTRUCTION ACTIVITIES•FUEL GAS CONTRACT •REVENUE COLLECTION•LIQUID FUEL & GAS SUPPLYMANAGEMENT•SOURCING FUNDS FORPLANT DEVELOPMENT

POWER OFF-TAKER

NEGRIS LTD.•ENGINEERING DESIGN•PLANT INSTALLATION &CONSTRUCTION•OPERATION & MAINTENANCE

Negris IPP Structure

• The structure of our power development business is to establish Special Purpose Vehicles (SPVs) for each project under which project financing and other contractual obligations (such as engineering, procurement & construction, and operations & maintenance) are undertaken

V. Projects

Total Fina Elf, Port Harcourt Power Plant Upgrade

Shell Central Power Plant, Port Harcourt (BOT)

Existing Power Plants

12.5 MW LAFARGE WAPCOEWEKORO POWER LIMITED

30 MW RIVERS STATE POWER PLANT

10MW LAGOS IPP POWER PLANT6 MW UNILEVER POWER PLANT

Projects

• The Negris Group, through ENCON is shortlisted for some of the PHCN Generation and Distribution assets for privatization through competitive bidding

• We see the ongoing reforms in the electricity supply industry in Nigeria and the emerging opportunities as very inspiring and a key driver to our present repositioning strategy

Projects

Pre-development Activities have advanced in the following planned projects:

• Expansion of Ikorodu IPP to 150MW under the Federal Government/World Bank Partial Risk Guarantee (WBPRG) Arrangement

• 140MW simple cycle Turbine Plant at Ota, Ogun State (Expected under WBPRG)

• 144MW simple cycle Turbine Plant in Rivers State.• 66MW Captive plant for our recently acquired

Newsprint Mill at Oku-Iboku, Akwa Ibom State• A few other captive plants for industrial large

consumers of electricity.

The NEGRIS Advantage

The Negris head start in private power development is derived and leveraged from the following:

• Over 30 years experience in engineering services in power and related facilities in the oil and gas sector (EPCOM).

• Pool of highly competent technical and managerial skills

• Strong strategic alliances or partnership with reputable foreign players (e.g. Solar Turbines Inc.)

• Service and quality mindset over 2 decades of dealing with high profile customers, e.g. Shell, Chevron, Nigerian Agip Oil Company, etc.

Present/Future Growth

• We are currently building group wide capacity to undertake medium to large scale power projects in readiness for the emerging power market in Nigeria

Thanks