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Imagination at work.
2015
GE Energy Financial Services (EFS) Global Markets - Development
2
This is GE Capital
GE Energy Financial Services – at a glance
39% Thermal 36% Renewable 25% O&G, Midstream Based on March 2014 exposure
Across energy spectrum • Renewable/ thermal power
generation, oil & gas reserves, midstream
Across capital spectrum • Financing, investing
Across geographies • North America, Europe, Latin
America, Asia Pacific, India
Investing Segments & products
ü $16B assets ü 220 investments ü $25B in volume since 2004 ü 30-year track record
75% equity 25% debt
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This is GE Capital
GE Energy Financial Services - More than money Financial strength • Catalyst for GE’s core energy business • Excellent risk-adjusted returns • Long-term view • Long-lived, essential assets • Rigorous risk management • Investments throughout business cycles • GE’s strong balance sheet • Purchase, optimization & sale of assets
Expertise • 265 experts find opportunities, underwrite
and create customized deal structures • Portfolio managers make operational,
profitability improvements • Solid channels with banks and sponsors to
attract more capital • In-house technical know-how from GE’s
heritage to see value where others don’t
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This is GE Capital
Adding value: GE Capital/Industrial Collaboration
• Build on and support GE’s global footprint • Support GE’s equipment sales
• Collaborate with GE Global Research on low-cost transmission technology • Analyze market and gather competitor intelligence
• Develop forward view of fuel prices, new builds, retirements, reserve margins, load growth, electric prices
• Analyze technologies and environmental regulations
• Provide historic perspective on long-term cost/opportunities of ownership� • Advocate government policies
Key vertical Industrial heritage Capital & expertise Mid-market finance
Solve complex problems for mutual customers
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$10+ billion in cumulative global commitments
• ~$8 billion: Wind 184 projects ~12 GW
• >$1.7 billion: Solar 60 projects 1.4 GW
Products
• Structured partnership project equity • Development capital • Project debt
EFS Renewables
75% Wind
17% Solar
4% Hydro
4% Geothermal & Other
6 EFS Global Markets
27/11/15
Invested in Pattern Energy’s 218-MW Panhandle Wind Project in Carson County, TX; powered by 118 GE 1.85-MW turbines.
August 2013 October 2013
Expanded operating and owned Colorado Highlands Wind project to 91 MWs; powered by 56 GE 1.6-MW turbines
February 2014
Acquired two wind farm construction projects in Ireland with a total capacity of 51 MWs, from Element Power; powered by GE’s flagship 2.85-MW turbines
Invested in Starwood Energy’s 211-MW Stephens Ranch wind project, under construction near Lubbock, TX; powered by GE 1.7-MW turbines
January 2014
Select EFS wind investments
Invested in Invenergy’s 148.6-MW wind project in Mills County, TX; powered by GE 2.5-MW “brilliant” turbines
July 2013
Invested in Invenergy’s 200.6-MW Prairie Breeze Wind Energy Center near Lincoln, NE; powered by 118 GE 1.7-MW turbines
October 2013
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EFS Conventional power
Hold equity investments in power projects that we or third parties operate with a capacity to produce 30 gigawatts
Products • Project equity • Preferred project equity • Development capital • Project debt • Leasing
Assets • Gas/coal • Power generation • Power transmission • Contracted/ merchant • Operating/construction/development • Base/intermediate/peaking
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Select EFS power investments
September 2013
Anchored $561M senior secured credit facility for CPV’s 700-MW gas-fired power project in Woodbridge, NJ. Uses GE 7F-5 series gas turbine generators
Financed construction of 584-MW Nelson Energy Center in IL. Uses GE 7F gas turbines with GE services contract
December 2013
April 2014
Arranged $97.4M senior secured credit facility for Saguaro Power’s 105-MW GE-powered combined cycle cogeneration plant in NV
Provided $50M loan to support Rockland Capital, LLC’s acquisition of 484-MW gas-fired Elgin Energy Center in IL
January 2014
Refinanced 620-MW Grays Harbor Energy Center in WA. Uses two gas-fired GE Frame 7FA combustion turbines and one GE steam turbine generator
April 2014
Saguaro Power Company
August 2012
Arranged $107M refinancing for two gas-fired peaker plants in Illinois; managed by Tenaska Capital Management; use 12 GE 7EA gas turbines
EFS Global Markets - Development
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2014 S&P overview
GE in Development
Ø Expand sales
Ø Penetrate new markets
Ø Leverage our brand
Ø Enable NPIs
Why does GE engage in development?
ü Work with clients who lack sufficient development capital & expertise
ü Development based on GE technology
ü Help P&W penetrate new markets that lack development capacity/capability
ü Develop new partnerships with key prospective clients
ü Support the introduction of new technologies
ü Provide or find ‘seed’ capital
ü One of the world’s most recognised industrial brands
ü GE ‘halo’ effect
Global Approaches
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2014 S&P overview
Development Approach
Partnership
Alignment
Serious Upside
Speed matters
GE does not go alone in development; scale matters
We partner with companies that seek the same outcome as
us…with shared vision & monetisation events
Development risk is priced appropriate to risk being taken –
i.e., high risk must yield high potential return
Capital velocity is key; fail fast mentality with multiple off
ramps
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2014 S&P overview
ü Technology … global leader in generation technologies, including wind & gas turbines that can be brought to bear into partnerships
ü Engineering … world-class engineering talent
ü Commercial … access to 250+ structuring & underwriting experts in GE Capital Energy Financial Services
ü Development… experienced, global development team with proven track record, whose sole mission is to ensure project success
Development Value Add
Deep Bench… GE global expertise and capabilities
Networks Origination Credibility GE salesforce Global, yet local
Leverages GE’s footprint…
~ regional & local staff with strong
business and governmental networks
in place
~18 GW Projects
> 30 years experience ~ hundreds of staff around the world with a
pulse on developers
History of Projects & technology
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Governance
Sectors Ø Wind & gas turbines projects
Ø Selective oil & gas projects
Ø Distributed power and energy management projects
Geographic Focus
Repeatable & Scalable
Capital Allocation
Development Criteria Focused on key technologies
Global with key emerging markets focus
Ø Prioritizing GE Power & Water’s key strategic markets
Ø Exploring opportunities in new markets
Two Key Strategic approaches
Ø Diversified portfolio with a partner within a market; single projects only if large scale
Ø Diversify across markets with strategically important partners
Centralised decision making
Ø Rigor in capital allocation
Ø Measure capital efficiency of each investment and utilize deal score carding
Aligned interests w/ downside protection
Ø Generally 50% or minority positions
Ø Milestone-based funding with termination rights
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2014 S&P overview
GE development investment history ~18 GW
North America Europe
Asia
Africa
ANZ Latin America
Renewables Thermal (Operating MegaWatts)
3,848 5,982
2,385
Pre 2000 Post 2000
569
Pre 2000 Post 2000 1,500 1,975
Pre 2000 Post 2000
276 522
300
Pre 2000 Post 2000
50 90
Pre 2000 Post 2000
114
Pre 2000 Post 2000
98 406 490 764 1,181 2,393
1,500 1,005 1,395 321 115
'00 '01 '02 '03 '04 '05 '07 '08 '09 '10 '11
Post 2000 trending – initial investment date
15
2014 S&P overview
Current GE development pipeline ~12 GW
North America Europe Asia
Africa
ANZ Latin America
Wind
(MWs in development)
5000
250
(1) Committed portfolio (2) Potential pipeline ~10
GW 1950
1140*
0
100
1200 1000
500
Current Totals New Focus Areas
CCGT CCGT
Wind
EPT REN $1.8bn(1)
$1.7bn(2) PGP $3.0bn(1)
$1.2bn(2)
2000
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2014 S&P overview
Project Location MW Technology COD
Towantic New Haven County, CT
805 2x1 7HA.01 2018
Rattlesnake Den Glasscock County, TX
200 118X1.7-100 2015
Shore Middlesex County, NJ 710 2X1 7FA.05 2015
Sentinel Riverside County, CA 800 8X LMS 100 2013
Colusa Colusa County, CA 660 2X1 7FA 2010 Total 3,175
Case Study: Competitive Power Ventures (CPV)
CPV is a leading US electric power generation development and asset management company Global Infrastructure Partners is new capital provider Natural gas generation… ~8GW in development
~1.4GW in construction
~0.8GW in operation
ü JDA creates framework for co-developing projects; LLC
Agreement executed on a per project basis
ü GE 30-49% ownership
ü Work exclusively with GE identifying sites in defined
Target Regions
ü All projects to be exclusive to GE equipment & services
ü At Financial Close, parties share in development upside
0
5
10
15
GW
Renewables Natural Gas
CPV Projects Co developed with GE JV Concept
Key highlights
1
2
3
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2014 S&P overview
GE development: new initiatives in 2015
ü Co-development with leading IPPs
ü Co-financing with aligned partners
ü Increased co-operation with EPCs
ü Implement capital efficiency metrics to ensure only best of breed get funding
ü Enhance market-pricing discipline, reflecting scarcity & risk of development capital
ü Source capital from the most appropriate source … both internal and external
ü Secure investment options….and fail fast…
ü Industrial & Capital businesses to support key strategic imperatives
ü P&W emerging target markets
One Global Team aligned across …
New value-added partnerships… Enhance growth, manage risk & improve results
Enhance Financial Rigor… Improved capital allocation in a global context
ASEAN LATAM MENAT
Pricing
Allocation
Efficiency
Financing
Development
Operations
18
2014 S&P overview
EFS GM Development Global Contacts Divided into 3 business units: Global, US & SSA
LATAM/MENAT Leader Rembrandt Niessen m: +44 7930 408042 e: [email protected]
US Leader Tim Howell m: +1 203 249 5856 e: [email protected]
Sub-Saharan Africa Leader Vishal Agarwal m: +254 722 207 343 e: [email protected]
ASEAN Leader Frank Sine m: +66 81 832 3196 e: [email protected]
ANZ/Asia Leader Jason Willoughby m: +61 424 504 721 e: [email protected]
Global Development Leader John Bottomley m: +44 7920 757583 e: [email protected]
