Jay Gallegos, CEO

Globeleq Mesoamerica Energy

> GME was established in 2004, focus in Central and South America and Mexico

> Operation wind parks:

23 MW operating in Costa Rica (Plantas Eólicas-PESRL)

102 MW operating in Honduras (Cerro de Hula) - expansion

44 MW operating in Nicaragua (Eolo) > Projects under development:

130 MW awarded in Costa Rica PESRL2 40 MW –Guatemala 900MW+ under study

Plantas Eólicas, SRL, Costa Rica

> 58 Kenetech turbines, 23 MW installed capacity

> Built in 1994, first utility scale wind farm in LatAm

> Kenetech (EPC Contractor & Operator) bankrupt before C.O.

> All Maintenance in-house

> Commercial Operation 1996, average availability 96%

> PPA with ICE (Costarican Public Utility)

> 51 Gamesa wind turbines, 102 MW

> PPA with Utility for 20 years

> First wind plant in Honduras

> Finance from US ExIm Bank and CABEI

> Construction in 11 months (10 sites)

> +300 landowners - Property entitlement and regularization

> More than 30 town hall meetings, c. 2000 Good Neighbor Agreements

> Expansion of 24 MW

Cerro de Hula, Honduras

> 22 Gamesa wind turbines, 44 MW

> PPA with private utility for 20 years

> Finance from FMO (Netherlands), German Development Bank (DEG), and Proparco (France)

> Construction started before financial close

> Construction in 7.5 months

Eolo Wind Plant, Nicaragua

> 50 MW awarded under BOT scheme

•Location in Liberia, Guanacaste •PPA with ICE for 20 years •Expected Commercial Operation for 2015

> 4 x 20 MW selected under BOO scheme

•2 projects located in Liberia, Guanacaste •2 projects located in Tilarán, Guanacaste •PPA with ICE for 20 years •Expected Commercial Operation for 2016

> PESRL Repowering

Wind Projects awarded in Costa Rica

> Around the world, developing countries are seeking to rapidly scale-up renewable energy investment. This shift to renewable energy is driven by a number of considerations:

De-risking Renewables

• Many developing countries are struggling to meet fast-growing energy demand

• About 1.3 billion people still lack access to electricity and 2.7 billion to modern energy services, with their human development held back through energy poverty

• Meanwhile, rising global fuel prices and resource scarcities are making developing countries increasingly vulnerable to oil prices. Over one-third of low-income countries already pay more than 10 percent of their gross domestic product (GDP) to secure their oil supply

• At the same time, the technology cost of renewable energy has been experiencing remarkably steady falls over the past decades

De-risking Renewables

• The difference in financing costs (debt and equity) dramatically affect the cost of renewable energy in developing countries

Source: UNDP

> The higher financing costs in developing countries reflect a number of perceived or actual informational, technical, regulatory, financial and administrative barriers and their associated investment risks. A country needs to provide potentially very high return rates to investors to succeed in attracting private investments.

> For wind power development if independent power producers (IPPs) face barriers in access to grids, lengthy and uncertain processes to issue permits, limited local supply of expertise or a lack of long-term price guarantees.

De-risking Renewables

> Rather than a problem of capital generation, the key challenge of funding the transition towards a low carbon energy system is to address existing investor risks that affect the financing costs and competitiveness of renewable energy in developing countries.

Source: UNDP

Resource Assessment

Some of the building blocks take much longer in the Region

Permits

Infrastructure

Land

Socialization – security

Environment

Off-Taker / Market

Interconnection Construction

Operation & Maintenance

Financing

Balance of Plant

Equipment

Legislation & Policies

> 10 MW wind projects

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Plantas Eólicas, Costa Rica (23 MW) C/O

MOVASA, Costa Rica (20 MW) C/O

AeroEnergía, Costa Rica (8 MW) C/O

Tejona, Costa Rica (20 MW) C/O

Amayo, Nicaragua (40 MW) C/O II (23 MW) C/O

PEG, Costa Rica (50 MW) C/O

Cerro de Hula, Honduras (102 MW) C/O CdH II

Coopesantos, Costa Rica (13 MW) C/O

Chiripa, Costa Rica (50 MW)

San Buenaventura, Costa Rica

Valle Central, Costa Rica (12 MW) C/O

Eolo, Nicaragua (44 MW) C/O

Blue Power, Nicaragua C/O

Las Sierras, Nicaragua

Santa Fé, Panama

Toabre, Panama

El Tesoro, Panama

Penonome, Panama

Buenos Aires, Guatemala

San Antonio, Guatemala

Piedras Blancas, Guatemala

“Before the Wedding” - Projects Take Time

> Honduras – Dealing with post COD Legal Adjustments

• Changes in distribution taxes directly must be dealt with through new legislation, evocation of Change in Law provisions in PPA or reduced project returns.

> Costa Rica -.Managing Tariff uncertainty

• Latent regulator ability to adjust tariff creates issues in financing and valuation.

> Nicaragua – Offtaker risk and uncertainty

• Changes in offtaker ownership structure • Dealing with offtakers running losses

“After the Wedding” Examples

> Key steps: Clear renewable targets set (requiring Bids or feed-in tariffs for long

term PPAs (Power Purchase Agreements) Streamlined & clear permitting process (Single Window) State backed payment guarantees Government needs to follow up on investment to help with

implementation of incentives, issues that arise (VAT, Customs, Indigenous Groups, Changes in Law, Problems with Regulators, posting of Payment Guarantees, etc.)

How to promote renewable energy

Thank you!

www.GlobeleqMesoamericaEnergy.com Tel: +506 2228-9300