Geothermal Power Plant

Investment in Turkey

Project Finance Opportunity

Strictly Private & Confidential

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Turkish electricity market has shown great progress in line with the economic growth in the last decade, growing Turkish population,improving life standards and urbanization.

For the future, Turkish Electricity Transmission Company (“TEIAS”) foresees the need for further energy investments to avoidestimated supply gap in 2017 in their 2016-2020 capacity projections. This estimation is made with the assumption of the continuity ofthe same trend in electricity generation and consumption.

Distribution of Total Installed Power inTurkey

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Thermic Natural Gas Hydro Geothermal

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Market OverviewMarket Dynamics

▪ Power consumption in the ▪ Current dependency on imported electricity to meet thedemand will create the condition for energy investments

▪ Availability of various trading opportunity for electricity via bilateral, wholesale, retail sales

country increased 125%between 2000-2015, power consumption is expected toexpand by another 53% between 2016 and 2026 as new capacity is brought online.

▪ The fact that electricity consumption per capita in Turkeyis still well below the European countries giving insightsabout the future market potential of the Turkish electricitymarket

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Market OverviewMarket Dynamics

▪ Availability of cross border trade with neighboring countries

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The Turkish geothermal industry is the largest in Europe(in terms of installed capacity).

Geothermal potential in Turkey is relatively high onaccount of its position over shifting tectonic plates,specifically the Mediterranean volcanic belt (78% ofgeothermal potential is located in the Western Anatolian.

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Geothermal Energy in a Global Scale

In 2017, global total installed capacity has become 13,801MW.

Top 12 countries in terms of installed capacity and net electricity generation are United States, Indonesia, Philippines, Turkey, New Zealand, Italy, Mexico,Kenya, Iceland and Japan.

With the addition of two geothermal power plants, Turkey now has broken into the list of countries with more than 1,000 MW of installed geothermal power generation capacity. As a result the country will have a total installed capacity of 1,005 MW, making Turkey the fourth country in terms of installed capacityin the World.

Market OverviewGeothermal Energy in Turkey

Turkey is hoping to expand its domestic geothermal industry, for both heating and power production purposes.

Aydın Güriş Holding

Kız ıldere 2 Jeotermal Enerji Santrali

Aydın Güriş Holding

Aydın Kipaş Holding Enerji Grubu

Aydın Kipaş Holding

Ken Kipaş Jeotermal Santrali Aydın Kipaş Holding Enerji Grubu

Aydın Çevik Grup

Türkerler Alaşehir JES Türkerler Holding

Aydın Güriş Holding

Pamukören 3 JES Aydın Çelikler Enerji

Kız ıldere (Zorlu) JES

Gümüşköy Jeotermal Enerji Santrali Aydın

Aydın

Aydın Kipaş Holding

Çanakkale

Çanakkale

Akça Enerji

Afyonkarahisarİl Özel İdares i

Bereket Enerji Kız ıldere JES

Aydın

Aydın

Gürmen Group, Maspo Enerji

Aydın

Aydın Çelikler Enerji

Aydın

Pamukören 2 Jeotermal Enerji Santrali Aydın Çelikler Enerji

Özmen 1 Jeotermal Enerji Santrali Özmen Holding, Sis Enerji

Türkerler Alaşehir 2 JES Türkerler Holding

Aydın Kipaş Holding Enerji Grubu

Aydın Kipaş Holding Enerji Grubu

Enerjeo Kemaliye Enerji Üretim

Aydın

Alaşehir Jeotermal Enerji Santrali

Pamukören Jeotermal Santrali Aydın Çelikler Enerji

Kız ıldere 3 JES

Market OverviewOperational Geothermal Power Plants in Turkey

Market OverviewGeothermal Power Plant Investments in Turkey

Electricity production in Turkey is mostly based on fossil fuel power plants such as natural gas and coal-fired thermal power plantscausing huge energy imports and natural sustainability issues.

As a response to both of these problems, utilising the countrywide renewable energy capacity more is one of the Government’spolicy and several regulatory incentives and regulations have been put in place.

With favorable market and supporting policies and regulations for renewables dynamics in Turkey, promising technical capacities of the Project and access to suitable financing structures, the Company is the perfect fit for investors looking for Turkish geothermal electricity generation opportunities.

Prospects for further pricing and tax incentives in the sector

For geothermal investment applications submitted to the Energy Market Regulatory Authority (“EPDK”) until the end of 2020, the power purchase guarantee provided by the Government based on fixed feed-in tariff (“FIT”) of 10.5 US$ cent per kWh for a period of 10 years

Recent regulations for renewable electricity production in global standards

Market OverviewRenewables Policies and Regulations

▪ Maspo Energy (“the Company” or “Maspo”) is the subsidiary of Gurmen Group(“the Group”), one of the well-known business groups in Turkey.

Maspo was founded in 2010 to develop, build and operate geothermal power plant projects in Turkey.

The Group operates in the following sectors:

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Textiles

Construction & Real Estate Development

Energy & Mining

Agriculture and Livestock

▪ The Company won the tender of the General Directorate of Mineral Researchand Exploration (“MTA”) for the usage rights of the geothermal field in Manisa– Alasehir, Turkey for 30 years with a bidding amount of USD 52.5 million(excluding VAT) in October 2011.

Maspo has started utilising the geothermal capacity of the field by constructingthe geothermal power plants in a phase by phase manner to reach electricityproduction capacity of approximately 90 MW until October 2020(“the Project”).The first phase has started production in June 2017 with a capacity ofapproximately 10 MW. The Second phase with a capacity of 30 MW will startoperating in Q1-2019, followed by the third phase with the capacity of 50 MWby October 2020.

As of today, the Company holding the land concession license has conductedgeological and geophysical surveys, hydrothermal alteration studies, circulartests, interference tests and tracer tests and opened 5 more wells in addition tothe 5 wells opened previously by MTA for further assessments for sustainableelectricity generation. Among these 10 wells 6 of them are utilised for electricitygeneration for the 10 MW plant with 3 as production and 3 as reinjection wells.

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Project OverviewSponsor Company

The assessment studies conducted by local and international technical advisors suggest that the Project has many attractive technicalfeatures for the geothermal electricity production due to the tectonic and geological structure of the Project’s field in Manisa -Alasehir, Turkey.

▪ Located in one of the most attractive geothermal area in the region,

covering a 126.5 km2 area

▪ The largest reserved geothermal area for similar projects in Turkey

▪ Including the well with highest temperature (287 C at 2,720m depth in

February 2011) discovered so far in Turkey

▪ Electricity production has a potential of reaching minimum capacity of 140

MW up to 280 MW with conventional methods.

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First phase which has an installed capacity of 10MW has started operating on June 2017.

Second phase with an added capacity of 30 MW will start production on Q1-2019.

There is a further capacity potential with the use of new technological systems (Enhanced/

Engineered Geothermal System)

Project OverviewProject Capacity

The Project is suitable for different financing options by providing highly reliable cash flow

projections with the help of purchase guarantee based on fixed FIT on revenue side and the turnkey

EPC and O&M contracts on cost side.

Also, there will be no FX risk thanks to FIT defined on USD currency in

case the debt financing is provided in USD currency from local and

international financial institutions

Availability of non-recourse/limited recourse project finance loans with the aforementioned

reliable cash flow structure

Availability of financing from multilateral development banks such as IFC, EBRD, EIB etc. for

renewable power plant investments in Turkey

Participation of private equity funds in financing of renewable

energy investments in Turkey

Project OverviewFinancing Structures

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