EXECUTIVE SUMMARY

Aerotricity Ltd owns and is currently implementing a wind farm project with a total capacity of 9,6MW in the Kambi area, a village in the central part of Cyprus, south-west of Nicosia.

Kambi wind farm project is partly launched and in place – 2,4MW – since March 2012 (Phase A). Infrastructure works for the outstanding 7,2MW (Phase B) will commence upon availability of necessary financing. Aerotricity Ltd holds most licenses, permits and approvals today for implementing Phase B of its project. The project is expected to set off in 2016.

The project’s wind resource (i.e. expected power output of 16,5GWh) has been assessed with data obtained after 9 years of on-site wind measurements plus in the last 3 years from actual readings at WTG hub height. The latter have been analysed and validated by internationally recognized experts. Legacy turbine manufacturer/models have been chosen and turbine output validated against the specific wind resource characteristics of the site.

Security offered by the assignment of the 20-year Power Purchase Agreement (PPA) with the Electricity Authority of Cyprus and charges on tangible assets.

Re-financing of loan facility is sought for Phase A, an operating Wind Energy Park project in Cyprus (2,4MW) and financing for the commencement of Phase B. Project Useful Life is set at a minimum of 20 years and total Financing required is approx. €17mil (includes provision for 5% of cost overruns). Equity contribution of 20% of project cost.

MATURITY

• Project is partly launched and in place – 2,4MW – since March 2012 (Phase A). Infrastructure works for the outstanding 7,2MW (Phase B) will commence upon availability of necessary financing.
• Project land substantially secured (combination of freehold private land and 33-year leasehold on Government land) pending only the freehold acquisition of a small lot of private land, at an estimated maximum cost of €450K (for Phase B).
• On-site wind measurements over a period of 9 years and favourable wind resource reports by KenTec Denmark ApS.– report determines specifications of suitable turbines and estimates capacity at 16,5GWh p.a. Report also validated by Parsons Brinkerhoff UK and by ENERCON GmbH in May 2013.
• Supply of specific Wind Energy Converter (WEC) turbine type, Enercon E-53 and the new E-92, agreed with Enercon GmbH and preliminary quotation obtained. 15 year maintenance contract from the supplier at a fixed cost.
• Above report validated by TUV Rhineland Japan Ltd for CO₂ emissions trading (CMD mechanism)
• Licensed by Cyprus CERA (Cyprus Energy Regulatory Authority) as an IPP (Independent Power Producer).
• Selling price to Electricity Authority of Cyprus (EAC) was estimated at the fixed price of €0,135/KWh for Phase B (7,2MW) and €0,166/KWh for Phase A (2,4MW)
• Approved by Ministry of Energy, Commerce Industry and Tourism for additional subsidy on selling price if the avoidance cost of the utility company falls below the agreed price.
• The licensing procedure for Phase B is expected to finish by mid 2016. Pending is the approval of the Town Planning and Building permits.
• License to connect to the grid submitted to TSO (Transmission System Operator) and preliminary terms were issued. The final agreement expected to be signed any time now.

PHASE A and PHASE B – Total capacity of 9,6MW

• Assumed NIL Terminal value of Project on Year 20; however, profitable turbine operation after 20 years is highly likely. In addition, turbines will have a substantial salvage value upon project termination.
• Debit interest rate 4%; project finance/debt payable annually in arrears of 12 equal annual instalments of €1,450,000

Project Finance/Debt secured by:

• Assignment of PPA with total revenues of approximately €56,5M over 20 years
• Fixed charges on 6 in total Turbines valued at €10,4M CIF
• Other/additional security & covenants negotiable

The present is private and confidential; it is intended strictly for the consideration of the recipient and his/her consultants or advisors. It may not be copied, publicized or distributed in any manner. 

Contact: Christos Konomi, Managing Director – Aerotricity Ltd – chr.konomis@avacom.net Tel: 22818555

Procedure:  Confidentiality Agreement – Preliminary Disclosures – Preliminary Negotiations – Proof of Funds –- Due Diligence & Detailed Disclosures – Closing