Italian Pension Funds investing in infrastructure:Arpinge Spa

November 2017 2Company Profile

A pilot initiative inspired by international best practices, open to other investors whoshare the same values and objectives

CIPAG EPPI INARCASSANEW PARTNERS

are welcome

November 2017 3Company Profile

Private, yet institutional, investor in infrastructure Arpinge in brief

Investor/Promoter: Italian joint stock company established in late

2013 as an holding company

Structured and transparent decision-making process: Governance and management processes inspired by international best practices

Target: Investment in small and medium-sized infrastructure across the country

Development of sound and “eligible” projects: focus on key industrial

drivers, sound business models and good management

The management team: a qualified, cohesive team, with a mix of industrial and financial skills

Tried and tested innovative investments: Solid portfolio of investments and many new opportunities in pipeline

Impact investing and sound long term returns: focus on operating assets

with attention to “greenfield” to seek higher return

Attractive returns: Tight financial policy and primary focus on economic and financial returns

November 2017 4Company Profile

Market position

PLAYERS

> 1,000

0 - 200

200 – 1,000

SMALL/MEDIUM-SIZED NATIONAL PLAYERS

MAJOR GLOBAL PLAYERS

MAJOR NATIONAL PLAYERS

Arpinge market

segment

High-potential opportunities

Possible upsides in returns

Closing the deals can be more difficult and time consuming

Strategic, large-sized assets and networks of national interest

Greater co-investment opportunities

By definition part of the international market

A wide range of opportunities promoted by existing large players to be given a clear and unique strategy

Development of platforms and partnerships with major infrastructure players

MAIN CHARACTERISTICS:

• Arpinge has been established to fill a market gap in the small and medium-sized national infrastructure segment.

• Such infrastructure is more local in nature and is characterised by a higher GDP multiplier, but also complexities and a sensitive economy of scale!

• By definition, this market segment has seen smaller interest from foreign investors due to its size, complexity and local sensitivity.

INVESTMENT TICKET (€m)

November 2017 5Company Profile

10%

40%

30%

20%

Revolving Projects

Value-Added Projects

Greenfield Projects

Operating Projects

In line with the investment targets and in order to preserve significant diversification in the investments portfolio, Arpinge’s objective is to invest in Italy in the following fields:

IRR in line with the related risk profile: in term of asset, framework and sector

Initial Asset Allocation

(with no authorisation risks)

part of the assets already operative and generating

income, while the remainder need to be renewed

with investments that generate immediate income, and a way-

out of less than 5 years

WHICH INFRASTRUCTURE?

ACTIVE SECTORS

SECTORSUNDER ANALYSIS

In any case, medium-sized infrastructure in Italy, stand-alone ornetworked, especially under concession agreement. URBANinfrastructures is one of the main focus of the Company!

Type: Infrastructure already operational or in need of redevelopment/construction?

Both solutions have a precise asset allocation

Greenfield projects to seek profit and basic quality and operating projectsto acquire stable cash flows from the off

Parking & Urban Mobility

CleanEnergy

EnergyEfficiency

Social and healthcare

infrastructure

Transportinfrastructure

Energy grid

Energy recovery from primary and

secondary materials

INVESTMENTS, PIPELINE AND ASSET ALLOCATION

November 2017 8Company Profile

Search, selection and analysis

€8.8 bn

€1.3 bn

€273 m

€186 m

€153 m

EXAMINED411 Projects

PIPELINE106 Projects

NEGOTIATION28 Projects

APPROVED12 Projects

PORTFOLIO10 Projects

€2.6 bn

€0.7 bn

€159 m

€100 m

€84 m

ASSET VALUE(Enterprise Value)

EQUITY VALUE(Arpinge’s investment)

Eligibility rate

7%

Whereof

Whereof

Whereof

Whereof

November 2017 9Company Profile

Asset Allocation

Of the total value of the investment (asset value)

PORTFOLIO*

ASSET ALLOCATION

LOCATION

UNDER NEGOTIATION PIPELINE

(*) In the start-up phase, a priority has been given to the

operating assets

Value Added10%

Greenfield

29%Operating

61%

Value Added11%

Greenfield

44%

Operating45%

Greenfield

26%

Operating

74%

North

15%

Center

34%

South

51%

North35%

Center36%

South29%

North

57%

Center25%

South18%

November 2017 10Company Profile

Investment Trend

• The investment curve grows over time

•Usually, infrastructure funds have an investment periods between 4 and 6 years

• Arpinge’s activities are developed according to a trend in line with the usual marketdynamics

(*) In case of acquisition of a selected number of projects under negotiation. Since the list of opportunities grows

over time, this value is likely to rise.

123

94

51

34

3

75

34

116

11

20152014

0

Forecast 2018*

Forecast 2017*

2016

Commitments

Investments

Allocation @Oct-2017Cumulative Arpinge’s investments and commitments (€m)

PV

Energy Efficiency

Wind

Hydro

Car parks

17%

42%9%

17%

15%

153 M€Asset Value

24%

30%16%

4%

26%86 M€

Equity Value67M€ already

invested

ORGANISATIONAL STRUCTURE

November 2017 12Company Profile

Group Structure

Project company – Clean Energy (Solar PV)

LEGENDA

Project company - Clean Energy (Wind)

Project company – Clean Energy (Hydro)

Project company – Energy Efficiency

Holding

Subholding

Project company – Parking and Urban Mobility

ARPINGE SPA

AEER Srl

Albamar Srl100%

GESPAR SPA100%

PNE2 Srl

GFG Solar Srl

Ecosaving Srl

Burgentia En. Srl

EOS Energia Srl

100%

100%

100%

100%

60%

58%

Energia Pulita Srl100%

100%DP Energia Srl

Lageri Srl70%

100%RP Energy Srl

November 2017 13Company Profile

Board of Statutory AuditorsThe Board of Statutory Auditors supervises compliance withthe law and the Articles of Association, in accordance withthe principles of proper and careful administration andparticularly the adequacy of the organisational,administrative and accounting system adopted by thecompany and its actual operation.

Arpinge was established with governance principles inspired by the best international experience and the criteria typicallyapplied to companies, subject to regulation and supervision, operating in the asset management sector. The company’smain credentials include: independence in the management sphere, full transparency and traceability of decision-makingprocesses, analyses and decisions marked by professionalism and consensus, and structured control mechanisms.

Board of DirectorsThe company is managed by a Board of Directors comprisingfour directors, including the Chairman. The Board of Directorsdetermines the objectives and general strategies for thecompany’s management, investment policies and sectoralpriorities and approves investment and disinvestmentoperations.

Cristiano Cremoli

Chairman

Claudio Guanetti

Director

Federico Merola

Managing Director

New Director to be charged

Pier Giorgio Cempella

Chairman

Giuseppe Grazia

Standing Auditor

Massimo Cavallari

Standing Auditor

Governance

November 2017 14Company Profile

Supervisory Body

The Supervisory Body is an independent and autonomous body which supervises the correct application of theOrganisation, Management and Control Model pursuant to Italian Legislative Decree 231/2001, governing the company’sliability for offences committed in its interests by senior management or employees, and oversees its application.

Auditing FirmThe responsibility for auditing its accounts is entrusted, for the first three-year period, to KPMG.

Giovanni Canepa

Independent Member

Marco Cecchi de’ Rossi

Independent Member

The Managing Director, 2 Senior Partners and Proposer Partnerare members of the Investments Committee, along with:

Investments CommitteeThe Investments Committee comprises the Managing Director,Senior Partners, Proposer Partner and two independent members,selected on grounds of proven experience in the infrastructureand/or real estate sectors.

It is a technical body with an advisory function, which issues areasoned opinion on each investment decision examined by Arpinge.In particular, the Investments Committee conducts joint, technicalassessments of conformity between the operations and theinvestment and management policies and strategies defined by theCompany’s Board of Directors, taking into account the differentrisk/attention areas pertaining to the management choices.

Governance

November 2017 15Company Profile

Organisational Structure

STAF

F

BOARD OF DIRECTORS

BOARD OF STATUTORY

AUDITORS

SUPERVISORYBODY

MANAGINGDIRECTOR

Federico Merola

INVESTMENTSCOMMITTEE

SECRETERIATV. BartoliD.Mercuri

STAF

F

Pier Giorgio Cempella Chairman

Massimo Cavallari Standing Auditor

Giuseppe Grazia Standing Auditor

INFORMATION TECHNOLOGY

LEGAL AND CORPORATE

ACCOUNTS AND PERSONNEL ADMINISTRATION

Single-member body

Managing Director, Senior Partner and Proposer Partner, together with:Giovanni Canepa Independent MemberMarco Cecchi de’ Rossi Independent Member

Cristiano Cremoli Chairman

Federico Merola Managing Director

Claudio Guanetti Director

New Director to be charged

Tania Sanna

ADMINISTRATIVE HEAD & OFFICE MANAGER

INVE

STM

ENTS

TE

AM

Egidio Labanca

ANALYST

SP

DEVE

LOPM

ENT

MAN

AGEM

ENT

Elisabetta Costa

INTERNAL AUDIT

Valerio Fiorentino

SENIOR PARTNER

Paolo Martone

SENIOR PARTNER

INTERNAL AUDIT

PROJ

ECT

MAN

AGEM

ENT Raffaele Pizzorusso

ENERGY SECTOR

Alessandro Labellarte

PARKING SECTOR

Resources in the workforces of subsidiaries

Auditing Firm: KPMG

A.Cavalli(Gespar)

PORT

FOLI

OM

ANAG

EMEN

T

Luciano Iannuzzo

PARTNERPLANNING AND CONTROL

ANALYSTLuigi Cupelli

SENIOR ANALYST

Marco Pignoloni

ANALISTA SENIOR

CONTABILE

Angela Carelli

ANALISTA SENIORSENIOR

ACCOUNTANT

Giuliano Villanova

November 2017 16Company Profile

Management Team

Expertise in origination and deal execution gained through 15 years of activities in the real estate and energy sectors, added to considerable experience in credit risk assessment for industrial projects.

Management responsibilities in listed industrial and real estate holding companies.

Formerly Managing Director at Realty Vailog and Alerion Industries, head of corporate rating at Italrating, loan officer at IMI.

Director of CIPAG since 2013 and Director of Arpinge since 2017.

President of the Board of Surveyors and Graduate Surveyors of the Province of Milan since 2012.

Has worked in construction since 1986, mainly in urban planning/construction for the development of real estate and due diligence initiatives.

Formerly, member of the Countryside Committee of the Municipality of Milan and the Public Works Committee of the Lombardy Region.

Adjunct Professor at the LUISS Business School and visiting professor of International Finance within the Master’s Course in Economy and Management (LUISS). Member of the Board of Directors of SACE SpA.

Over 25 years’ experience in infrastructure (and real estate) investments, as well as in structuring companies and alternative investment funds.

Some of his previous roles include: General Manager of ANCE, Senior Partner at F2i SGR, Director of BNP Paribas REIM SGR and Invimit SGR (MEF); Director of FIMIT SGR, Executive in PFD at MCC and Schroeder.

Over 16 years’ experience in the development of real estate projects.

Development Manager for highly-complex projects, promoted by leading Italian and international investors, such as Hines, Doughty Hanson, Fimitand BNP, with the support of banks, public institutions and international institutional investors.

Head of economic/financial investment results, coordination of project teams, technical, legal and tax consultants, procurement, monitoring, stakeholders’ relations stakeholders, risk management and leasing/sales.

Cristiano Cremoli - Chairman Federico Merola – CEO

Valerio Fiorentino – Senior Partner Paolo Martone – Senior Partner

Over 20 years experience in project finance in the infrastructure and energy sectors, supervision in the contract/due diligence phase

Previous experience in the Api Group and financial institutions (BNP Paribas, Unicredit, MCC): Most recently, head of Structured Finance and Management of subsidiaries of the Api Group; previously Loan officer at MCC in project finance/project bond/export credit.

Elisabetta Costa - Partner

Experience in assessing investment andacquisition operations in the power & gasand renewables sectors, accrued through13 years spent at Capgemini, ERG and Api.

Has held executive positions in Api Group

Formerly head of the Energy Management andRegulation and Market (power & gas) departmentsfor the Api Group and the Strategic Planningdepartment for Api Nòva Energia.

Egidio Labanca – Partner & CEO AEER

Over 15 years’ spent at F2i, Simest,ANAS and Accenture

Previous experience in assessing infrastructureinvestments in Italy and abroad and managementin gas, motorways, airports, water, renewables,WtE, TLC and logical networks sectors.

Previously on the Boards of various subsidiaries inthe portfolio of F2i

Luciano Iannuzzo - Partner and Head of Planning and Control

November 2017 17Company Profile

Management Team

Marco Pignoloni – Senior Analyst Luigi Cupelli - Analyst

At Arpinge since September 2015, with expertise in the financial evaluation, mainly in the renewable and energy efficiency sectors.

Formerly Investment Analyst at Joule Assets Inc, Project Finance Analyst at Sinergia Sistemi - Fondamenta Group - and in the Business Development Department at the Hanergy Group.

At Arpinge since June 2016; formerly Financial Analyst at TernaSpA, in the Strategy & Business Development department, where he handled the assessment of investments in the Group’s non-regulated activities, chiefly in the Power and TLC sectors.

Gained experience in M&A operations and the structuring of investments in energy infrastructure in Italy and abroad.

Alessandro Labellarte – Project Manager

At AEER since July 2017. Previously Head of Special Projects atGreen Network SpA, with the responsibility to develop and manage the RES portfolio, and with the role of "energymanagement expert" for the E.S.Co. Branch of the company.

Multi-year experience as project manager in the power generation from renewable sources and energy efficiencysectors.

Raffaele Pizzorusso – Project Manager

ACCO

UNTI

NG

At Arpinge since November 2015. Previously held the role of Head of the Middle-Office at F2i Sgr, handling the accounting/administrative management of managed funds, relations with the Control and Supervisory Authorities and the settlement of investments and relations with Investors.

Tania Sanna – Head of Administration

PROJ

ECT

MAN

AGEM

ENT

At Arpinge since March 2017. Over 15 years’ experience in the concessions sector and the assessment of infrastructure investments, five of which were spent at Banca IMI, in particular motorways, parking and public transport, in Italy and abroad.

Within the Saba Group, the European leader in car park management, held both operating and management roles and various positions at subsidiaries or affiliated companies.

ANAL

YST

In Arpinge since november 2017, was previously senior auditor inone of the Big Four auditing firms and then worked in a companyspecialized in photovoltaic fields carrying out the projectfinancing process.

Dr. Giuliano Villanova – Senior Accountant

Investments

November 2017 19Company Profile

30%

24%16%

4%

26%

Energy EfficiencyParking & Urban Mobility Clean Energy

Portfolio - October 2017

• Share of Arpinge’s equity by sector, net of liquidity(2017 figures);

• Values refer to projects in portfolio;

• Considering the pipeline on-going, a significantgrowth is expected in the parking and mobility sector;

• Other sectors in the analysis phase.

Wind

Solar

Parking

Hydroelectric

EnergyEfficiency

Investments Portfolio

86 M€Equity Value

(67M€ alreadyinvested)

November 2017 20Company Profile

Projects in the Portfolio – Parking & Urban Mobility

Gespar SpA

≈ 3,600 car spaces

In portfolio since 2016

≈ €2 m in turnover

7 car parks

November 2017 21Company Profile

Solar

Assets: 6 plantsTotal Power: 10.2 MWLocation: Abruzzo/MarcheStatus: OperatingAcquisition date: 2015-2016-2017Asset Life: 25 years

Hydro

Assets: 1 plantPower: 2.8 MWLocation: BasilicataStatus: Under constructionAcquisition date: since 2016Asset Life: 30+30 years

Wind

Assets: 2+1 plantsPower: 34 MW (operating)

9 MW (development)Location: Basilicata / SicilyAcquisition date : 2016-2017Asset Life: 30 years

Projects in the Portfolio – Clean Energy

November 2017 22Company Profile

FreeConad SpA

13 Conad stores

In portfolio since 2015

≈ €25 m capex

Projects in the Portfolio – Energy Efficiency

An Italian energy efficiency pilot project innovative in terms of its contractual company/finance structure, as well as the

combination of redevelopment and energy efficiency activities.

EPC CONTRACTOR

O&M CONTRACTOR

OUTLETS

ProjectFinancing

O&M Contract

EPC Contract

58%

Ecosaving Srl

Patronage

Fee

Service Contract

40% 2%

November 2017 23Company Profile

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