Corporate and Investment Banking Global Power and Utilities

Corporate and Investment Banking | Global Power and Utilities October 4, 2016 Financing Renewable Energy LAC CORE Michael Eckhart Global Head of Environmental Finance Citigroup, Inc.

’s Deep Alternative Energy Expertise Citi has developed industry leading global alternative energy capabilities with a broad range and depth of expertise and execution capability. Breadth of Citi Alternative Energy Expertise Global Presence · Top M&A advisory practice – Experience across technologies – Global team with cross-border expertise – Advised on largest U. S. M&A transactions · Premier equity distribution platform – Private placements – Initial public offerings – Follow-ons – Convertibles London Hong Kong Mumbai Sao Paulo · Established project financing franchise – Greenfield and brownfield situations – Portfolio or single asset transactions – Acquisition financings and recapitalizations – Lead arranger of largest U. S. wind and solar project financings to date · Tax equity investment capabilities – Tax equity partnerships – Leveraged leases · Strong commodities hedging team 1 New York San Francisco Sydney 2016 Sale of 49% Stake in Wind Portfolio to Advisor to EDP 2016 2015 2014 Sale of 50% interest in Burbo Bank Extension wind project Sale to $420 mm IPO $250 mm Sale of Solar Portfolio to Advisor to Dong Energy Sole Advisor to Terra. Gen Active Bookrunner and Structuring Agent Sole Advisor to Capital Dynamics

Global Leadership in Renewable Energy Citi is a consistent leader in Renewable Energy transactions across sectors, geographies and products. 2016 Europe US Sale of 49% stake in onshore wind portfolio to $95 mm Senior Secured Notes for Solar Portfolio Joint Lead Placement Agent US $2. 2 bn acquisition of Vivint Solar Sale to Energy Capital Partners Joint Financial Advisor Active Bookrunner and Structuring Agent 2015 Sole Advisor to En. BW 2015 Advisor to Dong Energy 2015 US U. K. Sale of 49. 9% interest in Baltic 2 offshore windfarm U. K. Sale of 50% interest in Burbo Bank Extension wind project Advisor to EDP 2015 2016 Advisor to Solairedirect 2015 $218 mm Senior Secured Notes for Solar Portfolio $500 mm Project. Co Term Loan A Joint Bookrunner, Mandated Lead Arranger Joint Lead Placement Agent US 2015 Left Lead Joint Bookrunner 2 $159 mm Senior Secured Notes for Solar Portfolio $675 mm IPO Active Bookrunner and Structuring Agent Joint Lead Placement Agent 2015 US $394 mm Construction Loan, $73 mm Letter of Credit Facilities for South Plains II Wind Project Lead Arranger and Sole Bookrunner 2015 201 US US US $420 mm IPO $670 mm PIPE $1 bn Warehouse Facility $200 mm IPO Active Bookrunner and Structuring Agent Lead Placement Agemt $200 mm Warehouse Facility for Residential Solar Joint Bookrunner Sole Advisor 2015 US US US $351 mm Follow-On Offering $800 mm High Yield Senior Notes $328 Follow-On Offering $405 mm Follow-on offering Joint Bookrunner Active Bookrunner Joint Bookrunner 2015 2014 US € 285 mm Senior Secured Notes to finance two Spanish Solar CSP Plants $350 mm Joint Bookrunner Placement Agent PIPE US $1, 550 mm Bridge, $575 mm Term Loan, & $450 mm Revolver for acquisition of First Wind Joint Lead Arranger, Joint Bookrunner, and Co-Syndication Agent 2015 US US Not Disclosed Sole Advisor Joint Investor 2014 U. K. Sale of a 25% interest in London Array offshore wind farm to Sole Advisor to Dong Energy 2015 Spain 201 $492 mm IPO US $2 bn acquisition of Invenergy Portfolio Active Bookrunner amd Structuring Agent Joint Financial Advisor and Lead Structuring Agent $4. 3 bn Acquisition of Pass Through Lease 2014 U. S Co-Placement Agent US 201 $300 mm Senior Unsecured Notes for Invenergy Wind Portfolio acquisition Lead Left Bookrunner US € 970 mm Senior Secured Notes issuance to refinance a 288 MW offshore wind project 2015 US US$325 mm Series B bond offering and US$320 mm LCs for 579 MW Solar Star project 2015 US $246 mm Construction Loan, $210 mm Tax Equity Commitment and Energy Hedge for Mariah Wind Project 2015 France € 200 mm Sale of 95% stake to 2016 2014 US Global US $255 mm Senior Unsecured Notes Sale of Hanwha Q CELLS to Hanwha Solar. One Lead Advisor to Hanwha Q CELLS $250 mm sale of solar portfolio to Terra. Form Power Joint Bookrunner Sole Advisor

Financing Renewable Energy Requires Continuous Innovation Three of Citi’s transactions were awarded Deal of the Year by Environmental Finance. 3 Bio-Energy Deal of the Year IPO of the Year Energy Efficiency Deal of the Year 2015 U. S. $200 million IPO $420 million IPO $50 million Energy Efficiency Loan Warehouse Joint Bookrunner and Structuring Agent Sole Underwriter

Clean Energy Industry Drivers Paris COP 21 Global Emissions Goal RE Costs have Decreased Rapidly Gt of CO 2 Levelized Cost of Energy ($ / MWh) Historical and projected emissions 40 Gt by 2030 to be consistent with a 2 o. C goal Trajectory range to achieve impact during second half of the century Key Themes · Paris Climate Agreement Growth in New Investment in Clean Energy $ in billions $329 · Clean energy system costs · Growth of capital investment $62 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 · Staged for global success Source (top right): Lazard LCOE Analysis Version 9. 0 (November 2015). Presented on an unsubsidized basis. Represents LCOE in the U. S. Source (bottom right and left): Bloomberg New Energy Finance. 5

Financing Renewables is About Risk Management Utility Ownership Presents Major Implications for Risk Assessment and Mitigation OEDC BRICS IOU Utility Gov’t Coop MDB / DFI Projects IPP Least 11 Most Developing Countries

Competing in the Global Clean Energy Market · Concentration of resources in a region – Acquisition plus development – Local partners, relationships and execution – Focus and scale: cannot spread nickels all over the world · Supply chain management for simplicity and lowest cost – Systems: lowest cost and highest quality – EPC and O&M: multi-project contracts and incentives – Financing: seeking lowest cost, longest tenor · Capital and financing strategy: – Equity: corporate balance sheet and/or partners – Debt capital – banks, institutional investors, capital markets – Portfolio management – yieldco, securitization, green bonds 12

Renewable Energy Technology Markets · Solar PV: booming market, over-capacity, prices dropping · Wind: LCOE in steady decline to 4¢ - 6¢/k. Wh · CSP: stalling except MENA and China (? ) · Geothermal: US stalled, global projects going ahead · Hydro: still growing in Asia · Biomass: continuing but many struggles and failures · Biofuels: conventional growing, advanced sputtering · Related: – Batteries: coming fast – EVs: growing with supply-side push – Smart Grid: advancing steadily

Renewable Energy Geographic Markets · US: PTC and ITC extended, steady installations plus resi-rooftop solar · Europe: major slowdown on-shore plus growth in off-shore wind · China: coming off boom in 2015, now in slow-down but still large · India: new star market but “race to the bottom” · MENA: disappointing market versus earlier forecasts – an insider market · Japan: predicted slowdown from solar PV boom in 2010 -2015 · Australia: political back and forth · Latam: signs of growth, Brazil down, Chile booming, Mexico leading

Renewable Energy Investment and Finance · Institutional Forces: – – · Green Finance: China, G-20, OECD, MDBs, UN/GCF, Europe Green Bonds: GBP, CBI, Moody’s, S&P, Luxembourg, others Sustainable Investment: PRI, CERES/INCR, others Impact Investing: Pensions, family offices, Morgan Stanley, others Capital Markets: – DCM: Green bonds, project bonds, securitizations – ECM: IPOs, follow-ons, yieldcos, Chinese take-privates · Project Investment and Financing: – – – – Banks: International, regional and local – over 100 in the US alone Development banks: WBG, EIB, ADB, Af. DB, Kf. W, BNDES, CDB, others Equity funds: Blackrock, Riverstone, Carlyle, Hancock, others Utilities: US and European Pension Funds Corporates: over 50% of new wind power PPAs in the US Asset M&A: running $30 - $40 billion/year

Brazil Top Renewable Project Finance Lenders (2006 – Q 2 2016) $ in millions Top Renewable Asset Owners MW Source: Bloomberg New Energy Finance. 3

Mexico Top Renewable Project Finance Lenders (2006 – Q 2 2016) $ in millions Top Renewable Asset Owners MW Source: Bloomberg New Energy Finance. 7

Mexico March 2016 Power Energy Auction Results · 227 bids by 69 participants · Highest bid by Zuma Energía at US$69 / MWh · Lowest solar bid from Enel Green Power at $35. 44 / MWh Generation Capacity by Winning Project Developer MW 992 509 241 Enel Green Power Source: Press releases. 4 Sun. Power Jinko Solar 62 27 29 Recurrent Energy Sol de Insurgentes Photoemeris Sustentable

Mexico September 2016 Power Auction Preliminary Results · 457 bids by 57 participants · Average price for renewables at US$33. 47 / MWh · Solar PV accounts for 54% of net generation, and wind for 43% · Total capacity of 3, 776 MW, 2, 871 MW of which from new installs Net Generation by Winning Project Developer GWh 722 2 ex i C ex co om En Po er is ió gí w n er a Fe de de Al ra ta ld. . . e El En ec er G. . u gí an. a ju Si at er o ra Ju ár G ez re en H R ub ey no sa III te be l Bl ue m M SM ac O 5 Q M El Source: Press releases. X 290 278 252 250 223 199 147 114 73 H 399 394 363 353 343 ez qu ax Al ac ite te a n W En i er Fo nd gí to as w at R io en ov ab le s AT En Q el So ue G tz la r e al r En en Po er w gí r a M Ka éx XEl m ic o et io En En er er gy gí a M EN éxi co G IE So la r O PD E 478 Tr 821 818 779

Chile Top Renewable Project Finance Lenders (2006 – Q 2 2016) $ in millions Top Renewable Asset Owners MW Source: Bloomberg New Energy Finance. 9

Peru Top Renewable Project Finance Lenders (2006 – Q 2 2016) $ in millions Top Renewable Asset Owners MW Source: Bloomberg New Energy Finance. 11

Guatemala Top Renewable Project Finance Lenders (2006 – Q 2 2016) $ in millions Top Renewable Asset Owners MW Source: Bloomberg New Energy Finance. 13

El Salvador Top Renewable Project Finance Lenders (2006 – Q 2 2016) $ in millions Top Renewable Asset Owners MW Source: Bloomberg New Energy Finance. 15

Panama Top Renewable Project Finance Lenders (2006 – Q 2 2016) $ in millions Top Renewable Asset Owners MW Source: Bloomberg New Energy Finance. 17

Honduras Top Renewable Project Finance Lenders (2006 – Q 2 2016) $ in millions Top Renewable Asset Owners MW Source: Bloomberg New Energy Finance. 19

Conclusions · Global market is large and growing · Policy push is increasing post-Paris · Sustainability is going mainstream in public and private sectors · Major issue is risk management · Development banks will have an increasing role · Essentially all investors and lenders are actively playing or looking · In Latam: – – – Key markets in Brazil, Mexico, Chile, Peru, and Central America Developers have been local companies European developers are making a play Financing from MDBs, DFIs, and regional/local banks Recent procurements in Mexico will create a new Latam base of operations.

Corporate and Investment Banking | Global Power and Utilities Thank You Michael Eckhart Citigroup michael. eckhart@citi. com

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