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1 Latest update: April 2015
Press Pack Building Energy
Contacts: Building Energy Publicis Consultants Italia
Maria Grazia Tiballi Barbara Rivolta
Tel. +39 02 49527730 Tel. +39 02 30353324
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Index
An Independent Power Producer (IPP) Operating on a Global Scale Page 3 The Market for Renewable Energy Sources Page 5
Development Strategies Page 7
The Group’s Operations Page 8
The Management Page 13
Key Information Page 15
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BUILDING ENERGY
An Independent Power Producer Operating on a Global Scale
Business
Type: IPP
and EPC
Building Energy is a leading international Independent Power Producer (IPP), acting as developer, EPC contractor and operator of renewable energy projects, operating in Italy and abroad. In Italy, the company has directly or indirectly developed and installed photovoltaic systems delivering over 150 MW of power. At the same time it has developed a strong international presence by expanding into international markets where renewable energy sources offer the greatest potential. Today, the pipeline has over 2000 MW worth of international projects under development.
Background The company was established in 2010 by its current management team in partnership with Siron group, a distributor of oil products. The managers have many years of experience with major multinationals in the energy and real estate sectors, where they have been responsible for planning and developing projects on a global scale.
Organization To date the group has over 130 employees located in the headquarters in Milan, other technical and commercial offices in Italy (Savona and Faenza) and the international offices in South Africa, the United States, Serbia, Japan, the United Arab Emirates and Panama.
Business
Model
Building Energy has developed its own distinctive business model which consists of managing every step of its projects directly, covering the entire life-cycle of its renewable power systems and installations. This model combines the technical engineering skills necessary for planning and commissioning a project, the financial know-how required to put the financial structure into place and the managerial skills required to guide the entire development process.
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Rapid
Growth
In the space of a few years Building Energy has achieved an impressive track record: • 230 MW total plants completed worldwide; • 110 MW of plants in operations; • 212 GWh annual global production; • 150 MW photovoltaic systems produced directly or indirectly in Italy; • 81 MW largest single PV project completed (Kathu - South Africa); • Development pipeline for a total of approximately 2000 MW from photovoltaic, mini-
hydroelectric, wind, and biomass technology in 24 countries worldwide.
Synergo Sgr On June 28th 2013 Building Energy finalized an agreement with the private equity fund
Synergo Sgr that invested around 20 million euro. After this operation, the fund owned 25% of equity stake of the company, while the rest of the shareholders were split between top management and the Siron group. On June 18th 2014 Building Energy further strengthened its share capital with the objective of creating the ideal conditions for the development of its business plan. The transaction entailed a capital increase fully subscribed by Synergo Sgr for an amount of €8.5 million corresponding to 7.2% of the share capital of the Company. The Sinergia II fund increased its stake in the capital stock of Building Energy S.p.A. from 25% to 32.2%. The funds deriving from the capital will help accelerate international growth and consolidate the development and investments objectives in plants for the production of energy from renewable sources for more than 100MW over the next two years, as well as enable the Company to raise additional funds, through the issuance of a bond currently under analysis with the support of Equita Sim.
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BUILDING ENERGY The Market for Renewable Energy Sources
Context The development of the energy sector worldwide is increasingly focused on environmental sustainability, which shapes both market regulation policies and operators’ investment choices.
EU Action In this context, the European Union has acted as a first mover with its progressive energy policies. In 2009, the European Commission approved the “20-20-20 Climate and Energy Package,” containing energy and environmental policy measures aimed at promoting energy efficiency, developing renewable energy sources, and achieving a reduction in climate-altering gas emissions by 2020. In order to meet their target of having 20% of all energy consumed in the EU come from renewable sources, the commission divided responsibility between member states. Italy is expected have 17% of its energy consumption come from renewable sources by 2020.
The Italian
Market
Due to favorable incentive programs in place in Italy until 2010, the renewable energy industry grew rapidly. In the period between 2011 and 2012, however, the regulatory situation was in disarray. A series of divergent industrial regulations and periods without legislative coverage led to unpredictability in the authorization stage for constructing power stations, and therefore difficulty in financing and finalizing projects. The Italian renewable energy incentive program approved in July 2012, Quinto Conto Energia, completely revised the regulatory framework for the industry, defining a system of incentives for the various types of renewable energy and the maximum amount of money available for each incentive.
Potential on Foreign
Markets
The recent regulatory instability and progressive reduction in incentive levels have led many Italian renewable energy producers to bolster their international expansion programs. These companies are diversifying into more advantageous foreign markets both within the EU (in countries which still have a large growth potential) and outside the EU (where public funding for the sector is more well-established).
East-Central Europe
The industry in Western Europe has reached a high level of maturity and growth potential, which is subject to the dynamics of the regulatory legislation and the sovereign debt crisis. However, in East-Central Europe the renewable energy industry is still a young market. There are considerable development opportunities thanks to generous policy incentives, streamlined authorization procedures, low industrial and labor costs, as well as access to European funding. Countries such as Serbia, Bulgaria, and Romania, which have favorable and stable incentive models, are of strategic importance.
Growth in South Africa
Since 2011, South Africa has been one of the most promising markets for renewable energy, thanks to many factors which have stimulated its rapid growth: • Moving away from a market historically focused on coal, South Africa has decided to risk
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investing in renewable energy in order to make its economic growth more sustainable. Its economy has grown by an average of 3% a year in the last two decades. • The demand for energy is constantly rising in correlation with the average standard of living, especially among the black population which still has limited access to electricity. • In 2011, the government launched a National Energy Plan with the objective of changing the energy balance within the country by 2030. The Plan aims to substantially increase available power while diversifying the country’s energy sources as much as possible. • The plan calls for the production of an additional 42 GW of power, of which 42% (almost 18 GW) will come from renewable sources. • The Renewable Energy Independent Power Producer Procurement Program (REIPPPP) was introduced as part of the National Energy Plan. The program provides a bidding system divided into separate rounds. Approximately 2.5 GW of power was awarded in the first two rounds. • The third round ended in May 2013, when the South African government announced the “preferred bidders”, that were the recipient of the incentives. Building Energy was awarded the commission for the realization of a biomass plant with the capacity of 17.5 MW.
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BUILDING ENERGY
Development Strategies
Strategic
Guidelines
Building Energy aims to establish itself in rapid-growth markets as an independent operator involved in the entire process of constructing renewable energy power systems. The company has gradually expanded its initial activities of developing solar parks as an engineering, procurement and construction contractor (EPC) in order to include total management of the system’s lifecycle (from preliminary feasibility analysis to the final testing, from the financial planning to the design, and from construction to ongoing management and maintenance). In some projects Building Energy acts as the direct investor, producing energy from its own solar parks, and effectively acting as an independent power producer (IPP).
Management’s
Expertise
Building Energy’s top management has in-depth knowledge of the industry, industrial operators, and financial backers interested in investing in these types of projects, such as funds specific to the energy sector, private equity investors, and international banks. This allows the group to efficiently manage definition of a project’s financial structure as financial sponsor.
Partnerships Building Energy’s international expansion takes advantage of strategic partnerships with leading local operators in the target markets. In South Africa, a joint venture was signed with WBHO, one of the country’s major general contractors, which has revenue of over 1.4 billion euro. Also in the United States the company operates with a local partner, ABM group, listed in New York Stock Exchange (ABM) and considered among the main suppliers of services and integrated solutions. Alongside its industrial partnerships, Building Energy has also developed constructive relationships with local and national authorities involved in socio-economic planning, in order to maximize the participation of government institutions, the efficiency of its projects, and the beneficial impact of the stimulus in the local area.
Financial
Results
During the 2012 financial year, Building Energy had revenue of approximately 30 million euro. Revenues in the year 2013 increased to 53 million euro, with earnings before interest, taxes, depreciation, and amortization (EBITDA) of 6.5 million euro, a net financial position of 5.1 million euro and a net worth of 33 million euro.
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BUILDING ENERGY The Group’s Operations
The Group’s Operations in Italy
Building Energy has, directly or indirectly, installed photovoltaic systems delivering a total capacity of approximately 150 MW on the roofs of buildings and on the ground. Of its fifteen total solar park projects, most are concentrated in the regions of Lazio, Lombardy, Emilia Romagna, and Le Marche, but they can also be found in Sardinia and Calabria. Among all of the above, the following projects are particularly notable: • 85 MW installed at Montalto di Castro (VT) in 2009-2010 as general contractor; • 24 MW installed at Canino (VT) in 2010 as sub-main contractor; • 6 MW installed at Germania (Puglia) in 2011; • 9 MW installed in Italy between 2011 and 2012, as project developer and EPC contractor, owned by Building Energy and in operation at the moment.
The Group’s
Operations
Abroad
Building Energy demonstrated its international calling by moving into rapid-growth markets that have launched structured multi-year development programs in the renewable energy sector, such as Africa, the United States, Central America, the ME.NA region (Middle East, North Africa), Japan, Sri Lanka and the Balkans.
Africa South Africa: The Kathu Project
Building Energy is present in Africa through its office in Cape Town, which managed and coordinated the development and realization of more than 30 projects in South Africa and central Africa. Operations in South Africa began with Building Energy’s participation in the first round of bidding in the government’s auction-style incentive program.
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In December 2011, Building Energy won the contract for the construction and installation of an 81 MW photovoltaic project in Kathu in the Northern Cape. It is now the biggest solar park on the continent. In November 2012, Building Energy signed an implementation agreement with the South
African Department of Energy and a project financing agreement with the Rand Merchant
Bank for the amount of almost 280 million euro.
In a joint venture with its local partner WBHO, Building Energy is also responsible for
construction of the installation – which has been operating since August 2014 – and its
subsequent management for a period of 20 years.
South Africa: The Mkuze Project
In October 2013 Navosync (Pty) Ltd, a fully owned subsidiary of Building Energy Spa, was awarded the commission for the construction - in the area of Mkuze, Kwala Zulu Province - of a biomass plant with a capacity of 15 MW, the first and largest biomass plant in Africa. It is the first biomass power station selected by the South African government among over 90 candidate projects by international players, as part of the third round of an incentive program of energy production from renewable resources. According to the project, presented by Building Energy in partnership with Charl Senekal Trust (CST), South Africa’s main sugar producer, the plant will be fueled by the combustion
of sugar cane tops, with 360,000 tons of finished product from a plantation of 3,500
hectares. Building Energy will be a shareholder of this project, with a number of local investors including CSST, H1 Holdings, and Mkuze Local Community Trust, whereas Rand Merchant Bank will be the Mandate Lead Arranger for the Project Finance of around 1 Billion Rand (about 72 million euro). Construction is scheduled to begin in mid 2015 and will involve around 100 local technicians, whereas 240 more will work in the departments connected to the plant after the activation, expected in mid 2017.
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Zambia:
The Luapula
Province
Project
Uganda:
The Tororo
Project
Track-record
in Africa
In December 2013 Building Energy announced the appointment as preferred bidder of 4
photovoltaic plants totalling 20 MW in Luapula Province, in the East of the country. The
project will be financed under a project financing scheme and is expected to become
operational in early 2016.
In December 2014, Building Energy announced the construction of a 10 MW photovoltaic
plant in Tororo, in Eastern Uganda. The project will be financed through the Get Fit program,
promoted by the Government of Uganda with KFW, an institution aiming at helping African
countries to grow and fight poverty by supporting renewable energy projects. The plant is
expected to generate 17 GWh every year, in order to satisfy the energy needs of 2,500
families.
Based on the expertise and knowledge of the South African market acquired over the course
of these major projects, Building Energy intends to take on more opportunities emerging in
South Africa and its neighboring countries. Besides Kathu and Mkuze, Building Energy presented 13 projects for the renewable energy development and production program for small-scale plants in South Africa. Each project has the capacity of 5MW, for a total of 42MW. New projects are also in development in Mozambique, Cameroon, Namibia, Botswana, Zambia, Uganda, Kenya and Lesotho.
Europe
The Balkans Serbia: The Krusevac Project
In Europe Building Energy has a total of 26 MW of plants in operations. Moreover, the company also has a pipeline of 66 MW of photovoltaic systems, 3 MW of hydroelectric plants and 47 MW of biomass plants. Building Energy Balkan has recently opened its headquarter in Belgrade, from which the development and realization of all the projects in the Balkan area will be managed and coordinated. The first project Building Energy will develop in the Balkans is a 4 MWe and 16 MWt biomass plant in Krusevac, Serbia, generating 32 GWhe and 70 GWht per year. The 20-million-euro project will be sustained thanks to an agreement with the municipality of Krusevac. The plant will be fuelled by woodchips from Serbian woods, while the energy produced will be sold to the local thermal power station to supply the nearby villages. The plant will bring about 40 new job positions, besides other jobs coming from satellite activities, such as transportation of combustible substances to the plant.
North America
Building Energy is present in North America with its offices in Washington, D.C. from which its projects in the United States are managed and coordinated.
Building Energy’s strategy involves careful, constant monitoring of opportunities in other
markets, paying close attention to regulatory legislation, electricity prices, and development
costs. Projects of crucial strategic importance are currently in the preliminary assessment
stage in the United States.
At the end of 2012 Building Energy entered a partnership with Distributed Sun LLC, a US-
based company involved in business intelligence, advising and financing services for the
energy market. The partnership will allow Building Energy to benefit from Distributed Sun’s
broad platform of projects, portfolios, and services. In March 2013 Building Energy signed an
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agreement with Optimum Renewables for the development of a wind farm pipeline in Iowa,
for a total capacity of around 50 MW.
ABM Partnership C4C Partnership
The partnership agreement signed on May 2013 with ABM is of strategic importance. The US group is listed in the New York Stock Exchange (ABM) and has over $ 4.8 million revenues and 110.000 employees. ABM is among the main facility management operators in the world and the agreement will allow Building Energy to leverage the positioning and stability of its partner to suggest the development of photovoltaic plants and related energy services to the group’s wide client portfolio of over 20,000. In March 2015 Building Energy signed an important knowledge partnership with the World Bank’s Connect4Climate network, the global community launched in 2011 by the World Bank Group and the Italian Ministry of Environment, Land and Sea to raise global awareness on climate change issues. In April 2015 the company will take part in the Global Citizen 2015 Earth Day at the National Mall in Washington, D.C., a massive event that attracts global policy makers, finance ministers, environment and development NGOs, industry executives, and high-profile artists as well as a crowd of tens of thousands. Thanks to Building Energy, for the first time the Earth Day will be partially powered with clean energy, produced in a temporary photovoltaic plant (Building Energy Smart Systems Unit) which will be developed on a 300 m2 area and will contribute to reduce by 208 kgs the CO2 emissions of the event.
The First US Project in Baltimore
Few months after the joint venture agreement with ABM and its entrance in the US market, Building Energy designed and installed a photovoltaic system in Baltimore, Maryland. The system, among the largest projects in the Baltimore metropolitan area, was commissioned by the local utility Washington Gas Energy System and was installed on an area owned by Glen Meadows Retirement Company, a company that manages several healthcare facilities in Baltimore. The energy produced, 1.5 million KW per year, will be used by the local community and by the Glen Meadows Retirement Company nursing home centers.
Cornell University Project The Ellis Tract and Geneva Projects The North Kingstown Project Central America
In October 2014, Building Energy, in partnership with Distributed Sun and ABM, launched production for Cornell University’s solar farm, a 2MW array on eleven acres of Cornell property in the Town of Lansing. Building Energy and Distributed Sun installed 6,778 solar photovoltaic panels on a 10-acre Cornell property site adjacent to the Ithaca Tompkins Regional Airport. The solar photovoltaic panel array is Cornell’s first large-scale solar project and will have an installed capacity of 2.067 MW (DC) or 1.76 MW (AC), and will produce 2,388,357 kWh in year one. This is equal to reducing annual greenhouse gas emissions from 347 passenger vehicles, or offsetting CO2 emissions from electricity use from 277 homes for one year. In September 2014, Building Energy and its development partner Distributed Sun, were awarded a State incentive under NYSERDA program 2956, for a total 11 MW DC (8 MW AC) over two sites in Tompkins and Seneca Counties, NY. Cornell University will be the off-taker for both projects, as part of the university’s continued efforts to reduce its carbon footprint. Construction on the new projects is scheduled to start in early summer 2015. In December 2014, Building Energy, in partnership with Sage Stone was awarded a 15-y power purchase agreement with National Grid for a 1.25 MW DC rooftop project, as part of the utility’s solar enrolment program. The project may be subject to further expansion up to 4 MW DC upon adoption of the Renewable Energy Growth program, scheduled for April 2015. Building Energy is also present in Central America, in Panama. The company’s presence in Central America aims at evaluating further development opportunities in the area.
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Panama: The Tocumen Project
Building Energy’s main project in Panama is a 45 MW photovoltaic plant in Tocumen, developed in partnership with PSEP (Panama Solar Energy Providers). The company will act as IPP and EPC contractor of the project. The company obtained a provisional license in October 2014, while it is currently in the financial close stage. The plant construction is expected to start in the first half of 2015. The energy produced in the plant will be sold in the free energy market.
ME.NA
Egypt:
The Aswan
Project
Building Energy is present in the Middle East with recently inaugurated offices in Dubai, from
which it manages and coordinates projects for North Africa as well.
In recent years the ME.NA region has gone through a historic development, in which world
leader gas and oil producers have acknowledged the need and opportunity of starting to
move the production mix towards renewable energies. Today, every ME.NA country has
declared official objectives for the production of 50 GW of solar and wind energy, to be
reached within 2020.
In other countries of the ME.NA region, like Egypt, Building Energy is the leader in a short-
list consortium for the development of a photovoltaic system made of ten 2 MW plants for a
total capacity of 20 MW, that will be installed in Kom Ombo, in the South of the country.
In Jordan the company was selected to develop a 50 MW power project in the North of the
country, as part of the second round for the renewable energy production program. In March
2014, Building Energy signed an agreement protocol with the Ministry of Energy and Mineral
Resources (MEMR) and identified the energy production site. The project will be developed
in collaboration with a local partner, Archirodon, who is one of the main general contractors
specialized in infrastructures and industrial plants projects, with over 55 years of experience
and presence in the Middle-Eastern countries. The technical and financial proposal was
presented in the summer 2014.
Building Energy is also shortlisted for other large scale PV projects in Egypt and Jordan and work on a pipeline of projects in countries like Saudi Arabia, Qatar and the UAE.
In January 2015, Building Energy qualified for a project under the newly established Egyptian feed-in-tariff (FIT). Under this scheme, a project of up to 50MW will be built on an build own operate basis (BOO) and sell electricity to the national utility of Egypt. The project is expected to be operational in 2016.
Japan After the environmental issues derived from the nuclear plant accidents, the Japanese government decided to reduce the nuclear energy production adopting a policy that aims to increase the construction of renewable energy plants. In the future, Japan’s diversification of energy will include a renewable energy quote which is destined to increase up to 35% and reach a total capacity of installed photovoltaic system of 55 GWp by 2030. For Building Energy, Japan represents an interesting market in which to invest and in this perspective it has opened its new offices in Tokyo.
Ernst & Young Report
Ernst & Young regularly publishes a report on the global ranking of the most attractive markets
for investments in clean energy, known as the country attractiveness indices (CAI).
The February 2014 report confirms the primary importance of the markets in which Building
Energy operates, underlining the growing position of the South African and Japanese markets
and the continued strength of more mature markets such as Italy, Romania and the US, which
still occupy positions of primary significance.
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Global
Presence
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BUILDING ENERGY
The Management
The Group’s
Top Brass
Fabrizio Zago – CEO
Founding member of Building Energy, Fabrizio Zago has consolidated experience in the real estate investment sector and in business management of many companies. From 1997 to 2007 he realized many real estate initiatives in Italy and abroad first as CEO at Promo Immobiliare and, from 2003 to 2007, as CEO at GHV S.p.A. In 2002 he started working in the energy market as co-founder of iLight S.p.A. He acquired great experience in the sector until 2009 when, following a thorough and careful analysis of the renewable energy market, he identified some of the most skilled managers in the industry and decided to start Building Energy. Gianluca Bandini – Chairman Businessman with consolidated experience in the renewable energy sector, Gianluca Bandini entered the photovoltaic market in 2002 as founder and shareholder of SolarSolutions. Later on, he was General Manager at SunPower Italia from 2008 to 2010, and then became CEO at Energifera, high-efficiency micro cogenerators producer. Today he is partner of Siron and Chairman of Building Energy.
Fabrizio Brocchieri – Chief Financial Officer Manager with more than 12 years of experience in Investment Banking gained by working with prestigious financial institutions in Milan and London. He managed Project Financing and Merger & Acquisition transactions for utilities, energy and telecommunication companies. Before entering Building Energy he held the position of financial Advisor, dealing with structured financial and shareholding solutions for medium-size companies. Before that, he worked in the Corporate finance department at Pricewaterhouse Coopers.
Alessandro Bragantini – Chief Operating Officier
Founding member of Building Energy and manager with 20 years of experience in the Engeneering & Contracting sector, developed by working for 10 years in the traditional energy field and 5 years in the photovoltaic energy field. Before entering Building Energy he was Operations Director for Europe, Middle East and Africa at SunPower. Before that, he was Project Management Director at Italimpianti (Impregilo Group). During his career he was Project Director at Alstom Power and Sales
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& Tendering, Vice President at ABB SaeSadelmi for the ME.NA region and Project Manager and Project Engineer at Tecnimont (Montedison Group).
Europe Sergio Benocci – Managing Director Europe and Asia Manager and businessman with more than 10 years of experience in the energy market. Sergio Benocci was Managing Director of the Editorial Group ItMedia (Sole 24 Ore Group) from 1999 to 2001. Later on, he entered the energy sector founding iLight, society in which he held the position of Commercial Director. Now he is Managing Director at Building Energy, with the responsibility for the business in the European and Asian regions.
Africa
Matteo Brambilla – Managing Director Africa Manager with consolidated experience in the traditional and renewable energy sector. After holding positions of increasing responsibility in TT Holding, Italtel, Prada and General Motors, Matteo Brambilla started working in the energy market as CFO of Infrastrutture S.p.A. In 2011, he entered Building Energy to hold the Managing Director position with the responsibility for the business in the Southern and Central African region.
United States Andrea Braccialarghe – Managing Director USA
Manager with significant experience in the photovoltaic sector, Andrea Braccialarghe was for four years the Commercial and Branch Director of the Utilities Division and Power Plants of Sun Power a company specialized in the production of solar cells and panels, managing the development of over 160 MW of photovoltaic systems in Italy. Before that, he worked in the Shell group and as Sales Director in the Cooling Technology division for the America company SPX, where he guided the development of the Italian, Northern African and Middle Eastern markets.
Middle East and North Africa Balkans
Cornelius Matthes – Managing Director Middle East and North Africa Responsible for the Dubai offices, opened in February 2014, Matthes has consolidated experiences gained working for the industrial consortium Dii/DEsertec. The Manager entered Building Energy to develop the energy sector potential in the Middle East.
Paolo Rossi – Managing Director Balkans
Rossi has 12 years of experience as Project Manager in
International Events, Exhibitions and Fairs and 4 years of
experience in the renewable energy sector as Developer,
Asset and Property Manager. In the latest years Rossi has
developed deep knowledge of the renewable energy
market of the Balkan area.
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BUILDING ENERGY
Key Information
Company headquarters: Via Tortona 15, 20144 Milan - Italy
Business type: Independent producer of power from renewable sources
Chairman: Gianluca Bandini
CEO: Fabrizio Zago
Year established: 2010
Global presence: Italy, South Africa and Subsaharian Africa, USA, Central America, Balkans, Japan, Sri Lanka, ME.NA region.
Installed capacity: 150 MW of photovoltaic systems installed in Italy; 81 MW of photovoltaic systems completed in South Africa
Pipeline capacity under development
Over 2 GW from photovoltaic, mini-hydroelectric, wind and biomass technologies
2012 revenues:
Approx. 30 million euro
2013 revenues: 53 million euro
Employees: Over 130
Website: www.buildingenergy.it
