Caucasus Energy & Infrastructure (CEI) Company Presentation, December 2009
Company Profile Investment Strategy Milestones � CEI holds a mandate to invest in Transcaucasian companies � A joint stock company organized under the Georgian law in 2007 engaged in: � Obtained a Georgian Stock Exchange listing in January 2008 � Production, transmission and distribution of electricity and gas � Launched a GDR program with BNY York Mellon in March � Extraction, distribution and marketing of crude and oil 2008 products � Management of water utilities � Completed a database of technical and economic parameters of potential greenfield HPP projects in Georgia and shortlisted 26 � Development of cargo warehousing and logistics most attractive projects for future potential construction � Management of toll roads � Obtained a license for the construction of 46.4 MW Mtkvari HPP in Georgia and proceeded with Feasibility Study, Environmental � Waste management and recycling Impact Assessment Study and Geological Study, all due in Q3 2009 � Development of carbon emission trade-related opportunities � Hired several leading engineering and project development � CEI intends to concentrate on greenfield investments in small and companies, including Icelandic Verkis, Ukrainian medium-sized HPPs and electricity transmission lines in the UkrHydroProject and Georgian GeoEngineering, for the region construction and project development of Mtkvari HPP 2
Company Profile Ownership Structure Highlights � The company has shortlisted 26 attractive HPP projects, with the total required investment of approximately 500 mln Euros, for Others Firebird Republics possible future construction 8.5% Fund Central Asia 1.9% Opportunity Fund � The company plans to construct at least 6 HPPs from this list 1.9% within the next decade Firebird Avrora Fund Kairos Fund Ltd � Of these projects, Mtkvari HPP presented the most attractive 3.8% 37.3% opportunities and CEI proceeded with the development of the Sakaropel (East project, obtaining the license for the construction and gaining the Capital) 5.6% required funding. The construction of the hydropower plant began Consibilink Ltd in November 2009 (East Capital) 7.5% � 10 MW Dzegvi HPP, also on Mtkvari River represents the next most attractive project. Preliminary design, topographical surface chart and geological survey on the project have already been completed on the project. Construction works will commence BONY (Nominees once the required financing is obtained Kairos Eurasian Limited) Fund 15.0% 18.6% 3
Key Project Mtkvari HPP � Location : Akhaltsikhe, Southern Georgia � Potential installed capacity : 46.4 MW � River : Mtkvari � Annual power output : 253.0 GW/h � Head : 100.0 m � Estimated construction costs : US$ 70-80.0 mln � Water discharge : 55.0 m 3 /sec � Estimated tariff range (kWh) : US¢ 6.1 - 7.4 � Number and type of units : 2; Francis � Estimated payback period : 6-7 years � Construction time : 3.5 years � Expected life - span of the plant: 50 years ` Note: Represents locations of 26 HPP projects shortlisted by CEI for the possible construction 4
Company’s Current Position Corporate Developments Corporate Outlook � The second stage of Mtkvari HPP project design by � Turkish company ENCON completed the environmental and social UkrHydroProject is expected to be completed in December 2009 impact assessment of Mtkvari HPP, which was approved by the Ministry of Environment Protection and Natural Resources of Georgia � The company plans to apply for additional debt and equity financing in order to obtain full funding for Mtkvari HPP and to � Mtkvari HPP LLC selected the partners who will participate in the possibly finance other HPP projects from the company short-list civil engineering and construction works of the hydro power plant through the competitive bidding process. The key personnel � The construction of the hydro power plant is expected to be working on the project consist of professionals from JSC completed in 3.5 years HydroSpetsGvirabMsheni and JSC HydroEnergoMontazhi and JSC Caucasus Hydro Construction, a fully owned subsidiary of CEI � Following the extensive consultations with Icelandic Verkis and Ukrainian UkrHydroProject, Mtkvari HPP LLC decided upon the tunnel construction methodology, which will entail using a roadheader as a tunnel drilling machine due to lower costs and Other Provisions smaller risks associated with it � A new 400-500 kV HV transmission grid between Georgia and � UkrHydroProject completed the first stage of the project design of Turkey is being built, following the agreement between the Mtkvari HPP governments of two countries. The project is funded by the Georgian Government, EBRD and KfW � In September 2009 Mtkvari HPP LLC commenced the infrastructural and general preparatory works on the construction � Georgia’s current Prime Minister N. Gilauri has outlined several site, including its electrification through a 10 kilowatt transmission line connecting the site directly to the grid times that the construction of the Georgia-Turkey power transmission grid as well as attracting investments in new HPP projects are among the top priorities of the cabinet � The actual construction of Mtkvari HPP started on 7 November 2009 5
CEI Financial Statements (IFRS) Q3-2009 Q2-2009 30-Sep-09 30-Jun-09 Change Change Balance Sheet (GEL) Income Statement (GEL) (Unaudited) (Unaudited) % (Unaudited) (Unaudited) % Property, plant and equipment 6,423,701 5,063,105 26.9% Operating revenue 4,307 5,314 -19% Intangible assets 1,793 1,845 -2.9% Investment income 1,173,092 1,162,538 1% Investment property 7,774,888 7,774,888 0.0% Other non-operating revenue less exp. 1,059,752 605,383 75% Restricted cash 10,834,066 10,710,034 1.2% Total revenue 2,237,150 1,773,235 26% Deferred income tax assets - - n/a Total non-current assets 25,034,448 23,549,872 6.3% Impairment charge - - n/a Salaries and other benefits (92,301) (92,760) 0% Assets held for sale 480,930 480,930 0.0% General and administrative expenses (282,072) (335,886) -16% Available-for-sale financial assets 4,168,105 3,629,576 14.8% Depreciation and amortisation charges (8,188) (5,836) 40% Trade and other receivables 1,243,810 2,904,681 -57.2% Finance cost - - n/a Bank deposits 15,541,353 - n/a -12% Total expenses (382,561) (434,482) Cash and cash equivalents 12,116,745 25,626,204 -52.7% Total current assets 33,550,941 32,641,390 2.8% Profit/(loss) before income tax 1,854,589 1,338,753 39% Total assets 58,585,389 56,191,262 4.3% Income tax (expense)/benefit (108,258) (75,101) 44% Share capital 11,783,577 11,783,577 0.0% Share premium 40,116,908 40,115,558 0.0% 1,746,332 1,263,652 38% Profit/(loss) for the period Treasury shares (6,459,362) (6,460,112) 0.0% Other reserve 1,983,427 1,444,898 37.3% Attributable to: Retained earnings/(accumulated deficit) 10,532,709 8,786,377 19.9% - shareholders of the Company 1,746,332 1,263,652 38% Total equity attributable to shareholders 57,957,260 55,670,299 4.1% - minority interest - - n/a Minority interest 96,019 96,019 0.0% Profit/(loss) for the period 1,746,332 1,263,652 38% Total equity 58,053,279 55,766,318 4.1% Deferred income tax liability 75,236 75,236 0.0% Total non-current liabilities 75,236 75,236 0.0% Current liabilities Trade and other payables 273,515 274,607 -0.4% Current income tax liability 183,358 75,101 144.1% Borrowings - - n/a Total current liabilities 456,873 349,707 30.6% Total Liablities 532,110 424,944 25.2% Total equity and liability 58,585,389 56,191,262 4.3% 6
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