Bani, Dominican Republic 40 MW Solar Energy Project Sept 19, 2014xxxx

40 MW Solar Energy Project 40 MW Solar Energy Project Bani, Dominican RepublicBani, Dominican Republic

A ProposalA Proposal

Project PresentationProject Presentation

Table of ContentsItem No.

Particulars Page Nos.

1. Cover Page Page 1

2. Table of Contents 2

3. What is Solar Energy? 3

4. How much Solar Energy? 4

5. Radiant Energy 5 - 6

6. Advantage and Disadvantage 7

7. Project Description 8

8. Milan Farms Survey Plan 9 - 10

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8. Milan Farms Survey Plan 9 - 10

9. Why in Bani? Basic Information 11 - 12

10. Direct Normal Irradiation/Radiation Map - Annual 13 - 14

11. Energy Resources 15

12. Solar Irradiance 16

13. Sunrise, sunset, dawn and dusk times, tableSunrise, sunset, dawn and dusk times, table 17

14. Solar Energy and Surface Meteorology 18

15. Sun Path Diagram 19 - 20

16. Challenges and Opportunities 21 - 22

17. Project Finance Strategy 23 - 25

18. Consortium Members/Sequence of Events 26-27

19. References and Appreciations 28

20 Contact US 29

What is Solar Energy?What is Solar Energy?

Originates with the thermonuclear fusion reactions occurring in the sun.

Represents the entire Represents the entire electromagnetic radiation (visible light, infrared, ultraviolet, x-rays, and radio waves).

2 3

How much Solar Energy?How much Solar Energy?

The surface receives about 47% ofthe total solar energy that reachesthe Earth. Only this amount isusable.

The Sun is 93 million miles away.

The tiny fraction of the Sun’s energyThe tiny fraction of the Sun’s energyhits the Earth (~a hundredth of amillionth of a percent) is enough tomeet all our power needs and more.The sun provides more energy in anhour than the U.S. uses in a year.

We call the energy from the sun,Solar Energy.

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Radiant EnergyRadiant EnergyUnder extreme pressure, and atextremely high temperatures, nuclei ofatoms and their electrons can separate,forming plasma. In this extremely highenergy state, nuclei can get closeenough to each other to fuse. Whenthey fuse, they release tremendousamounts of energy. This is whatamounts of energy. This is whathappens in the sun’s core.

The energy produced by fusion can bereabsorbed by other nuclei and re-released in future fusion reactions.Energy released in the core of the suncan take thousands of years to find itsway to the surface of the sun.

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Radiant EnergyRadiant EnergyOnce the energy has left the sun, it isradiated as electromagnetic radiationtoward space at a speed of 300 millionmeters per second, or 186,000 miles persecond. At that speed, the energy needsonly 8 minutes to reach the outeratmosphere of the earth 93 million milesaway.

Once it reaches the earth, the incomingsolar radiation, or insulation, is absorbedand reflected. The greenhouse effect, anaturally-occurring phenomenon, allowsthe energy from the sun to remain trappednear the earth’s surface, keeping thetemperature of the earth in a comfortablerange at night. Without the greenhouseeffect, life on earth would be impossible.

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Advantages

All chemical and radioactive polluting byproducts of thethermonuclear reactions remain behind on the sun, while onlypure radiant energy reaches the Earth.

Energy reaching the earth is incredible. By one calculation, 30days of sunshine striking the Earth have the energy equivalent ofthe total of all the planet’s fossil fuels, both used and unused!the total of all the planet’s fossil fuels, both used and unused!

Disadvantages

Sun does not shine consistently. Solar energy is a diffuse source.To harness it, we must concentrate it into an amount and formthat we can use, such as heat and electricity. Addressed byapproaching the problem through: 1) collection, 2) conversion, 3)storage.

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40 MW Solar Energy Project40 MW Solar Energy ProjectBani, Dominican RepublicBani, Dominican Republic

Project DescriptionProject Description

Particulars DescriptionProject Location Bani, Dominican Republic

Installed Capacity 40MW

Technology Photovoltaic/Mono-Crystalline Silicon Panels/Single Axis Trackers/Lithium Ion Storage

Daily Storage Capacity +/- 20mW

Annual Production 75,000,000 kWh

Off Taker CDEEE (State Owned Electric Utility Company)Off Taker CDEEE (State Owned Electric Utility Company)

PPA Duration 20 Years

Purchase Price 19.75 US Cents/kWh

Annual Escalation US Inflation Rate

Project Footprint +/- 90 Hectares (Lease) Land Owner – Mr. Nagin Rana / Milan Farms, LLC

Distance from Interconnect Less than 400 Meters

Engineering American Electronic Technologies, Inc. (NASDAQ:AETI)

Utility Inter-Connect ABB (NASDAQ:ABB)

Accountant/Legal/Construction /Federally Registered, Bonded Local Construction Firm

Insurance Reputable and rated insurance company

Project Cost Total US$64,400,000.00

Cost/Watt US$1.61

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Milan Farms Survey Plan in BaniMilan Farms Survey Plan in BaniTotal Land Area Owned – 1,900 acres (768.91 Hectares)

The Proposed Site - 90 Hectares

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Milan Farms Survey Plan in BaniMilan Farms Survey Plan in Bani

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Why in Bani?Why in Bani?Bani, Dominican RepublicBani, Dominican Republic

Basic InformationBasic InformationOverview:Country: Dominican RepublicContinent: AmericasSub-region: CaribbeanThe city of Bani is the capital of the Peraviaprovince; its residents also know it as the homeof poets. It’s only an hour’s drive west of SantoDomingo. The province’s population is relativelysmall with 169,865 people, and only 61,864 inthe Bani metro area.Distance to Santo Domingo – 65 kms.Municipal Districts – 9 Total Land Area – 642.75 sq. km. (248.15 sq. mi.)Latitude: +18.29 (18°17'24"N)Longitude: -70.33 (70°19'48"W)Time zone: UTC-4 hoursLocal time: 10:56:38 Altitude: ~50 mEnergy Production – 1,695 ktoe/yearEnergy Consumption – 5,855 ktoe/yearFeed-In-Tariff by Solar PV – 0.10 USD/kWh 2010

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Why in Bani?Bani, Dominican Republic

Basic Information (2)KTOE stands for Kilotonne of Oil Equivalent' toe ' means Tons of Oil Equivalent ktoe is equal to 1000 toe. 1 toe = 41.84 gigajoule

The following are the toe of certain fuels.

Gasoline 1Tonne = 1.08 toe Diesel Oil 1Tonne =1.01 toe Dual purpose Kerosene (DPK) 1Tonne = 1.04 toe Fuel oil 1Tonne = 0.96 toe

MW is the unit of power and MWh is the unit of energy. ktoe is the unit of energy and not power.

MWh stands for Megawatt hour and is a measure ofenergy that is often used to describe an amount ofelectricity. A typical family home would useapproximately 3 to 4 MWh of electricity a year.

An MW stands for megawatt and is equivalent toDual purpose Kerosene (DPK) 1Tonne = 1.04 toe Fuel oil 1Tonne = 0.96 toe Liquefied Petroleum Gas (LPG) 1Tonne = 1.08 toe Coal 1Tonne = 0.62 toe Bagasse 1Tonne = 0.16 toe Fuel Wood 1Tonne = 0.38 toe Charcoal 1Tonne = 0.74 toe

Hydro (primary) 1 GWh = 220 toe Electricity 1 GWh = 86 toe

The last one gives 86 toe = 10^9 Wh 1k toe = 1000 toe = [1/86]*10^12 Wh 1k toe = 0.011628 * 10^12 Wh 1k toe = 11628 10^6 Wh 1k toe = 11628 M Wh

Finally note that MWh is the unit of energy and notpower.

An MW stands for megawatt and is equivalent to1,000,000 watts.

If the energy production in the Dominican Republic is1,695 Ktoe/year this is equivalent to 11.6300000000MWh or 0.97 MW/12 Hours or 354 MW productionper year.

If the energy consumption is 5,855 Ktoe/year this isequivalent to 58.1500000000 MWh or 4.85 MW/12Hours or about 1,770 MW consumption per year.

MWh is a unit of energy whereas, MW is a unit ofpower. Energy and power are two words oftenconfusingly interchanged. Energy is the amount ofwork done, whereas power is the rate of doing work.

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Dominican Republic Dominican Republic Direct Normal Irradiation MapDirect Normal Irradiation Map

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Dominican Republic Direct Normal Radiation Direct Normal Radiation -- AnnualAnnual

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Dominican Republic Dominican Republic Energy ResourcesEnergy Resources

Resource Value Units15 Rank Period Source

Wind Potential

1,492 Area(km²) Class 3-7 Wind at 50m

57 1990 NREL

Solar Potential

151,187,496 MWh/year 121 2008 NREL

Coal Unavailable Million Short N/A 2008 EIACoal Reserves

Unavailable Million Short Tons

N/A 2008 EIA

Natural Gas Reserves

0 Cubic Meters (cu m)

185 2010 CIA World Fact Book

Oil Reserves 0 Barrels (bbl) 185 2010 CIA World Fact Book

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Dominican RepublicSolar IrradianceSolar Irradiance

Solar Irradiance is a measure of how much solarpower you are getting at your location. Thisirradiance varies throughout the year dependingon the seasons. It also varies throughout the day,depending on the position of the sun in the sky,and the weather.

Solar insolation is a measure of solar irradianceover of period of time – typically over the period ofa single day.a single day.

This irradiance calculator takes data collated overa 22 year period to provide monthly averageinsolation figures. This information is then used tocalculate the average daily power generation aphotovoltaic system will produce in any givenmonth.

The DR’s National Energy Commission leads byexample using Net Metering to reduce monthlybills. This solution also provides surplus renewableenergy to the grid, reducing the country’s totalamount of fossil fuel-based energy

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Sunrise, sunset, dawn and dusk times, tableSunrise, sunset, dawn and dusk times, table

Date Sunrise Sunset Length Change Dawn Dusk Length Change

Today 06:30 18:39 12:09 06:08 19:01 12:53

+1 day 06:30 18:38 12:08 00:01 shorter 06:08 10:00 12:52 00:01 shorter

+1 week 06:31 18:33 12:02 00:07 shorter 06:09 18:55 12:46 00:07 shorter

+2 weeks 06:32 18:27 11:55 00:14 shorter 06:11 18:49 12:38 00:15 shorter

+1 month 06:36 18:15 11:39 00:30 shorter 06:14 18:38 12:24 00:29 shorter

+2 months 06:50 18:03 11:13 00:56 shorter 06:27 18:27 12:00 00:53 shorter



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Why in Bani?Bani, Dominican Republic

Solar Energy and Surface MeteorologySolar Energy and Surface MeteorologyNote: These data were obtained from the NASA Langley Research Center Atmospheric Science Data Center

Variable I II III IV V VI VII VIII IX X XI XII

Insolation, kWh/m sq./day

3.94 4.56 5.29 5.66 5.58 5.67 5.57 5.30 4.98 4.60 4.10 3.79

Clearness, 0-1 0:51 0:53 0:54 0:54 0:52 0:52 0:52 0:50 0:50 0:51 0:52 0:51

Temperature, deg. C

23.95 23.99 24.38 25.02 25.52 25.80 25.81 25.96 25.88 25.64 25.23 24.47

Wind speed m/s 7.47 7.20 6.93 6.02 6.22 6.73 7.43 6.91 6.09 5.45 6.93 7.28

Precipitation, mm

39 31 34 46 164 152 111 145 138 161 66 34

Wet days, d 13.4 10.1 9.9 9.2 11.2 11.5 13.9 14.0 14.0 15.5 14.1 14.3

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Why in Bani?Why in Bani?Bani, Dominican Republic

Sun Path DiagramSun Path Diagram

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Sun Path DiagramSun Path Diagram

Legend:

Gray Color Gray Color – DarknessViolet Color – DawnViolet Color – DawnYellow Color Yellow Color – SunshineRed Color - Dusk

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Dominican RepublicChallenges and OpportunitiesChallenges and Opportunities

Solar Energy ProjectEnergy Profile: Legal Framework:A. DR island nation that imports 86% of its

combustibles for electric power generation;B. 3% of GDP in 2008 went to subsidize the losses

of the grid;C. Frequent blackouts/brownouts;D. Structural problems (Government middle man

between private generation and residential

Law 57-07 passed in May 2007 provides incentivesto public and private projects that demonstratefinancial, environmental, technical and physicalviability. This law expressly encourages theinstallation and exploitation of pre-approvedphotovoltaic systems with no restriction onproduction. Incentives include: between private generation and residential

use) (Capacity of the grid);E. Lots of illegal connections;F. low collection on bills.

Financial

Taking out a loan contributes to the viability of theproject. Assume banks allow for a five year debtterm at 10% interest. This assumption issupported by the fact that the debt servicecoverage ratio is greater than one for all casesmeaning, the revenue generated by the solarproject is great enough to cover the annual debt.

production. Incentives include:

A. Exemption of import duties for all equipmentnecessary to generate energy from renewablesource;

B. Exemption of ITBIS for certain equipmentexpressly listed in the law ;

C. 5% reduction on interest on foreign financing on renewable energy projects ;

D. A single tax credit of up to 75% on the cost ofcapital equipment used in pre-approved projects that change to or expand the use of renewable energy in residential, commercial, or industrial establishments. The tax credit is apportioned over a three- year period at the rate of one-third per year

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Dominican RepublicChallenges and Opportunities (2)

Environmental Design CriteriaThe 'Design Criteria' tab lists the target photovoltaic power-capacity (blue cells) for each of five design scenarios. These power-capacities are calculated according to the supply anddemand information on the 'Site Data' tab. The scenarios aredescribed by the following table:

Meteorological data including average solarinsolation for the city of Santo Domingo isprovided by Ret Screen[, a Canadian renewableenergy program. This data comes from groundmonitoring stations and/or from NASA's globalsatellite/analysis data.

Model Parameters and Sight Data Case Description

Equivalent PV Energy Production

1. Supply enough energy average daily 2nd tier

The flow of information begins on the 'ModelParameters' and 'Site Data' tabs. On the ModelParameters tab, the spreadsheet user may inputfinancial parameters (e.g., inflation and financingoptions), hardware specifications (e.g., efficienciesand costs), and options for the analysis (e.g.,whether to assume a pre-existing inverter andbattery bank). On the Site Data tab, supply anddemand for solar energy are listed for arepresentative year. Monthly demands are listed ina format as you might find on an energy-bill, whilesuppy is listed in terms of the available daily solarenergy per unit area during each month of atypical year.

1. Supply enough energy to meet average annual second tier demand.

average daily 2nd tier energy demand

2. Supply enough energy to such that second tier energy is never purchased

3 standard deviations above average daily 2nd tier demand

3. Supply as much energy as possible without ever exceeding demand

3 standard deviations below average daily demand

4. Supply enough energy to meet average daily demand

average daily demand

5. Supply enough energy to go off-grid

3 standard deviations above average daily demand

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Project Finance Strategy

The development of the 40 MW Solar Energy Project in Bani, DominicanRepublic requires three types of financing as follows:

1. Pre-Development Financing:

Funds needed to finance so called “soft cost” is called pre-development financing, It isestimated that of the total project cost of $64,400,000.00 the total pre-developmentfinancing needed will be about $1,610,000.00. Of this amount the initial fundrequirement is approximately $483,000.00. The balance of $1,127,000.00 will be neededrequirement is approximately $483,000.00. The balance of $1,127,000.00 will be neededin four (4) equal tranches. The first tranche in the amount of $281,750.00 should bemade available for release three (3) months from the date the $483,000.00 is released.Second, third and fourth tranche shall be made available for release every after three (3)months from the first tranche.

Pre-development period – 12 monthsTotal amount required - $1,610,000.00

Day One ----------90th day-------------180th day--------------270th day------------360th day$483,000.00 $281,750.00 $281,750.00 $281,250.00 $281,750.00

The project has acquired site control with Mr. Nagin Rana, Owner of Milan Farms, S.R.L., providing the land with a total requirement of about 90 hectares.

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Project Finance Strategy:Continuation (2)

2. Construction Finance:Construction finance means funding needed toconstruct the project. The project cost in theamount of $64,400,00.00 is divided into two(2) components as follows:

A. Local Component – Funds needed to pay for materials and services locallyacquired:

Item No.

Particulars Budgetary Cost

Estimates

A. DIRECT COSTS $55,706,000.00

A1. Pre-Development Costs (including government Permits and Licenses)

$1,610,000.00

A2. Local Component Costs: Materials/Labor Costs

$5,796,000.00

Amount needed - $16,100,000.00Less:Pre-development costs - $ 1,610,000.00Balance - $14,490,000.00

B. Foreign Component – Funds needed to import materials and equipments from suppliers and manufacturers overseas:

Amount needed - $48,300,000.00

Construction Period - Two (2) Years

NOTE: Land Costs not included in thispresentation.

Materials/Labor Costs

A3. Foreign Component Costs: Materials/

Equipments/Labor Costs

$48,300,000.00

B. INDIRECT COSTS $8,694,000.00

B1. Overhead and Supervision

$1,738,800.00

B2. Insurance Premiums and Bank Charges

$5,651,100.00

B3. Incidentals $1,304,100.00

C. TOTAL PROJECTCOSTS

$64,400,000.00

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Project Finance Strategycontinuation (3)continuation (3)

3. Permanent Financing or Mortgage Finance:

Construction can be financed in two ways. One way is to use two loans, a constructionloan for the period of construction, followed by a permanent loan from another lender,which pays off the construction loan.

To finance the construction, the proposal is to secure a combination of equity and debt.The equity portion which will be equivalent to the amount allocated under localcomponent in the amount of $16,100,000.00 will be raised through sales of shares ofcomponent in the amount of $16,100,000.00 will be raised through sales of shares ofstocks, via the issuance of Private Placement Memorandum (PPM).

On the other hand, the foreign component in the amount of $48,300,000.00 will beraised through a loan via a combination of Export Credit and loan from a bank.

A bank in the Dominican Republic that is said to be providing permanent financing forrenewable energy is a government bank known as BHD Bank. This bank has a specialfinancing arrangements with some multilateral financing institutions, that makes BHD asconduit in providing funding for renewable energy projects in the Dominican Republic.

Moreover, other banks in the Region that has special funding for renewable energyprojects are Corporacion Andena de Fomento (CAF) and Central American Bank forEconomic Integration.

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Consortium MembersMembers of the Consortium as of October 21, 2014:

1. Milan Farms, SRLThe company owns about 1,900 acres of land in Bani, Santo Domingo. About 35% of the total land areais planted to Mangoes and Plantain. The website is: www.milanfarmsusa.com

2. Caribbean Greenhouse, CxAThe Owner is a former Minister of Agriculture in the Dominican Republic and recently the Administrator ofMERCADOM, a government owned over US$110 Million farmers market facilities, until he resigned lastSeptember, 2014 to focus on his own company in Moca, Dominican Republic where the company owns28,000 square meters of Greenhouses where they raise tomatoes and peppers. Besides this, they ownthe largest Coffee Mills and Coffee Plantation in the country.

3. Grupo Cobra, a member company of ACS of Spain3. Grupo Cobra, a member company of ACS of SpainThe company is the World’s leading Infrastructure and Concessions Developer. A member of the ACSGroup, and ranks number one for 2013 by ENR with a revenue of over $42.7 Billion. Grupo Cobra isprobably the world’s largest energy development company having done several renewable energyprojects all over the world. The website is: www.grupocobra.com.

4. Global First Financial Partners, Inc. (GFFP)It is a Delaware Company, engaged in the business of project development and project finance. It hasbeen involved with a number of infrastructure and real estate projects in its capacity as financialengineer. The website is: www.globalfirstfinancial.net.

5. Value Creation-Alternative (VC-A)VC-A, www.vc-alternative.com, is a strategy and corporate advisory company specialized in helping companies develop their business, either organically or through acquisitions. Founded in 2002, the company has developed a worldwide network of more than 1,000 seasoned professionals with more than 45,000 contacts and have collectively advised M&A projects worth in excess of US$100B.

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Sequence of EventsItem No.

Activities Remarks

1. Submission of Proposal to the Government under the Build-Operate-and-Own (BOO)

2. Preparation of Pre-Development works including creation of a Special Purpose Entity (SPE) that will

own the Project

3. Selection and Appointments of Project Development Consultants, engineers and Architectural FirmsConsultants, engineers and Architectural Firms

4. Negotiations with Investors/Creditors/Export Credit Agency and other Financing Institutions/Land

Owner

5. Drafting and Executions of Contracts and PPAs with the Government

6. Bidding and Awarding of Contracts to various Companies

7. Project Execution

8. Maintenance and Operation

9. “Ownership” of the Project to be sold to the Government or to private interest group

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References and Appreciations:This “Project Presentation” is intended forpresentation to potential investors and strategicpartners of Milan Farms. The objective is todevelop a 40MW Solar Energy Project in theproperty owned by Mr. Nagin Rana in Bani,Dominican Republic.

A “comprehensive project feasibility studies”will be done as soon as potential participants in thisProject have been identified and all the Parties haveexecuted a Memorandum of Understanding(MOU).

Moreover, this document was made possiblethrough the support of Mr. Nagin Rana and otherpartners of Mr. Fernando M. Sopot.

Likewise, the author has recognized the importanceof reference materials used in this document suchas but not limited to NASA Public Informationdocuments, the U.S. Department of Energy’s SolarDevelopment and appropedia.org. This “document”is subject to change without prior notice.

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Contact Us:This Project Presentation is prepared for:

Milan Farms, S.R.L.U.S.A. Office:

32 Passaic Street, Garfield, New Jersey 07026P: 1.201.370.5760 : 1.973.458.0066W: www.milanfarmsusa.comE: [email protected] Republic Office:

28, Residential Artemia, Unit 2B, Las Casicago,Santo Domingo, Dominican RepublicP: 1.809.850.7608

Attention: Mr. Nagin Rana

Owner

Fernando M. SopotPresident

Global First Financial Partners, Inc.108 Orchard Terrace, Union

New Jersey 07083

P: 1.908.463.9417

E: [email protected]: www.globalfirstfinancial.net

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Bani, Dominican Republic 40 MW Solar Energy Project Sept 19, 2014xxxx