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Technical Due Diligence

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  1. Technical Due Diligence Renewable Energy We build with Passion!

  2. Technical Due Diligence for Renewable Energy Projects • When investing in or developing major energy projects, you need to understand and mitigate all technical risks before you decide to commit. • The technical due diligence report can help you understand the technical feasibility of your project with a full technical risk review. • Main sectors of interest: • Photovoltaic • Wind • Biogas and Biomass • Geothermal • Hydroelectric We build with Passion!

  3. Technical Due Diligence for Renewable Energy Projects The Technical Due Diligence can definitely help you: • Understand and mitigate a variety of technical and socio-environmental risks before you commit your valuable time and resources to the project • Identify technical risks that could compromise your project’s profitability and bankability • Ensure that the technical feasibility of the project makes for a sound investment • Ensure that all factors have been accounted for in the development process We build with Passion!

  4. Technical Due Diligence for Renewable Energy Projects • Legal Frame for Renewables – National Regulatory • Law no. 220/2008 regarding the promotion of renewable energy sources, successively amended and supplemented by: • Government Ordinance no. 29/2010 • Government Emergency Ordinance no. 88/2011 • Law no. 134/2012 for the approval of GEO 8011, amending and adjusting law 220/2008 8/2 • Law no. 123/2012 regarding electricity and gas • Government Emergency Ordinance no. 57/2013 published in the Romanian Official Gazette no. 335 dated 7 June 2013 which will enter into force on 1 July 2013 (“GEO 57”) We build with Passion!

  5. Technical Due Diligence for Renewable Energy Projects Incentive Scheme – Number of Green Certificates • On 4 June 2013, however, the Romanian Government approved by way of an Emergency Ordinance new measures applicable to the RES sector as of 1 July 2013. The new measures (described herein) aim at discouraging future investments in the renewables sector, but they are also impacting operational investments, thus breaching investors’ legitimate expectations. • Temporary suspension of the number of GCs granted to certain technologies: • Starting with 1 July 2013, the issuance of a certain number of GCs will be deferred, as follows: • new hydro-power plants (below or at 10 MW): 1 GC deferred; • wind: 1 GC deferred; • photovoltaic: 2 GCs deferred. • The deferred GCs shall be recovered starting with March 2017 for new hydro-power plants and solar, and with January 2018 for wind. The recovery of the deferred GCs will be done in steps, according to a methodology to be adopted by the regulator. We build with Passion!

  6. Technical Due Diligence for Renewable Energy Projects THE PROJECT The SponsorThe developer of the Project The Bank The project submitted for funding or re-funding The technical advisor - understand the technical feasibility of your project with a full technical risk review We build with Passion!

  7. Our Area of Expertise on Renewable Energy Projects • The Due Diligence analysis is carried out taking into account all the relevant factors that might influence the project, and providing any practical suggestions to render the relevant Project bankable, according to the applicable Scope of Work. • Normally, two phases are identified: • Pre-closing Phase: Due-Diligences are based on documentation provided by means of a comprehensive checklist and on-site surveys for site feasibility assessment. Due-Diligence activity includes site assessment, design review (including quality check of proposed components), authorization check, productibility/cash flow calculations, contract analysis (EPC, O&M) • Post-closing Phase: Construction Monitoring Reports, including supervision of work management construction and Acceptance Tests; Operation & Maintenance monitoring to assure the design performance We build with Passion!

  8. Our Area of Expertise on Renewable Energy Projects • Main issues with impact on projects’ bankability • Changes in Legislation • Projects over the installed capacity Legal risk-Regulatory Market risk • Off–take contracts • Dispatching risk Development risk • Permitting process • Limited grid capacity Operational risk • Inexperienced local operators • Few international players with limited track record on local market Revenue risk • Prices predictability [energy and green certificates] • Green certificate price We build with Passion!

  9. Our Area of Expertise on Renewable Energy Projects • Main issues with impact on projects’ bankability We build with Passion!

  10. Our Experience – Due Diligence Reports for Romanian Banks and Investors Project:Wind Farm 27,5 MW Nalbant, Tulcea County, Romania Status: Ready to build Reports: Preliminary Due Diligence Report and Independent Engineer Report Project:4 Hydro Plants Boia, Romania Status: Ready to build Reports: Preliminary Due Diligence Report and Independent Engineer Report We build with Passion!

  11. Our Experience – Due Diligence Reports for Romanian Banks and Investors Project:Wind Farm 27,5 MW Nalbant, Tulcea County Romania We build with Passion!

  12. Contact DELIA RAUCESCU d.raucescu@optimpm.com +40 737 012 555 25A EmanoilPorumbaru Street 3rd floor Bucharest, Romania www.optimpm.com