Teaser GREENSTONE ENERGY - Afrifocus€¦ · Teaser document. 2019. PRIVATE & CONFIDENTIAL. P 1 I Strictly private and confidential. Greenstone Energy Targeting a R2bn – R3bn market

Greenstone Energy

GREENSTONE ENERGY AN INDEPENDENT UTILITY

LISTING ON ZAR X

Teaser document

2019

PRIVATE & CONFIDENTIAL

P 1 I Strictly private and confidential

Greenstone Energy

Targeting a R2bn – R3bn market capitalisation

Sharia compliant Team is invested in the Company Sizeable pipeline already in place Multi-disciplined team with extensive

experience and network Over a century of combined

experience ranging from sustainability, engineering, banking, multinationals and government

Commercial and industrial sectors represent more than 60% of all electricity consumed nationally

Renewable energy technologies now make it possible to provide power to the Commercial & Industrial sectors more cheaply than Eskom

Regulatory changes passed into law in November 2017 pave the way for Independent Power Producers to operate as a utility

Key features of Greenstone Energy

Investment opportunity

Greenstone to list on ZAR X Stock Exchange via apublic offer and seeks to raise R100mil for an initialcapital raise

Currency Rand

Location Headquarters in Woodmead, JHB, South Africa

Target market capitalisation

R2bn – R3bn within 2 – 3 years with an initial firstcapital raise of R100mil

Purpose

The Company’s primary objective is to deliver strongreturns to investors, whilst contributing to South Africabecoming a more sustainable society

The natural resource and energy sector is the clear“investment theme” with particular focus on: on-site independent power generation mix of renewable energy technologies and

gas Greenstone will continually innovate its already

disruptive business model to provide affordable powerto commercial and industrial clients

Greenstone aims to be the dominant IndependentEnergy Utility in the region

Investment strategy

Provide clean, affordable and independent power tocommercial and industrial sector clients and largescale mixed use developments

Deploy a scalable digital platform capable ofmonitoring, controlling and optimising powergeneration plants even in the most remote of locations

Target return

Greenstone aims to deliver a target gross weightedaverage IRR of >30% or greater over a 20 year periodon a project level; and

A total IRR of >20% for an investor over a 20 yearperiod

Offer

Offer to the public expected to open from 1 Nov 2019 Targeting an initial capital raise of R100mil to fund

immediate pipeline, with a further capital raise of up toR2bn in FY20

Majority Black-owned-and-managedpublic company launched to make long-term equity and equity-relatedinvestments by designing and fundingan energy solution optimised forGreenstone’s clients’ needs.

Greenstone’s power generationexpertise spans solar, wind, hydro,geothermal, gas, clean coal, energystorage and hybrid power solutions.

Greenstone Energy (“Greenstone” or “the Company”) is a modern, independent utility driven by a core team ofenergy and financial specialists. Greenstone provides clean, affordable and independent power to commercial andindustrial sector clients and deploys a scalable digital platform capable of monitoring, controlling and optimisingpower generation plants even in the most remote of locations


Greenstone Energy

Introduction to Greenstone EnergyGreenstone is a modern, independent utility driven by a core team of energy and financial specialists with deepexpertise in leading-edge renewable energy technologies and innovative fin-tech solutions. Greenstone providesclean, affordable and independent power to commercial and industrial sector clients and deploys a scalable digitalplatform capable of monitoring, controlling and optimising power generation plants even in the most remote oflocations. Similarly, Greenstone uses the same cloud-based platform to provide secure, access controlled real-timebilling and financial information to clients, investors and partners. This allows its customers and partners to havegreater control and visibility of their energy resources and investments

Greenstone Energy aims to be a leader in the Independent African Energy Utility Sector and intends to pursue thispurpose with an innovative and disruptive business model to provide independent power to commercial andindustrial clients

Greenstone is a modern,independent utility driven by acore team of energy andfinancial specialists

Deep expertise in leading-edge renewable energytechnologies and innovativefin-tech solutions within theexisting legislative framework

Greenstone provides clean,affordable and independentpower to commercial andindustrial sector clients andlarge-scale, mixed-usedevelopments

Greenstone’s powergeneration expertise spanssolar, wind, hydro,geothermal, gas, clean coal,energy storage and hybridpower solutions

We deploy a scalable digitalplatform capable ofmonitoring, controlling andoptimising power generationplants even in the mostremote of locations

Similarly, Greenstone usesthe same cloud-basedplatform to provide secureaccess controlled real-timebilling and financialinformation to clients,investors and partners

This allows its customers andpartners to have greatercontrol and visibility of theirenergy resources andinvestments

Greenstone’s experiencedteam of professionalengineers and EPCimplementation partnersensure that they provide themost appropriate powergeneration technology tominimize the lifecycle cost ofelectricity and maximizeproject ROI

Advanced data analytics

Designing, funding and building an energy generation facility

that yields the lowest Levelized Cost of Electricity

Comprehensive Operations and Maintenance

Transparent management interface

Partnering with the client to allow full or partial ownership of

the energy assets at any point over the life of the plant

Greenstone empowers its customers by designing and funding an energy solution optimised for their specific needs and underpinned by:

Allows clients to improve the efficiency and effectiveness of energy usage through the provision of real-time consumption and generation data and automated demand management systems


Greenstone Energy

With the ever increasing electricity prices, unreliable supply of electricity from the grid and theuncertainty of Eskom’s future, Greenstone believes that the timing is ripe to raise capital and offerclean, affordable and independent power to the Commercial and Industrial sectors. Furthermore,the trends in renewable energy are extremely favourable.

`

1. Reduction in costs

Over the last decade alone, prices of renewable energy plants have halved and in the last two decades the drop has been by more than afactor of four. Hence for example where a 1 kW solar system would have cost around $4000 in 2001, it now costs less than a $1000.

A similar trend is being observed in the prices for wind power and battery storage prices, although not yet as steeply as solar or wind.

2. Uptake in renewable energy

Uptake of renewable energy has grown exponentially in the last decade due to the price decreases cited above. This is best exemplified inthe graph depicting global Solar PV capacity below

3. Decentralisation of the industry and untapped market

Decentralisation of the industry with a move away from large centralised grid-based utilities to decentralised power producers• Economies of scale have resulted in price drops• A similar trend occurred in the computer industry and telecommunications

The opportunity

Greenstone targets the Commercial and Industrial (C&I)sectors of the economy for its solutions. The C&I sector inSouth Africa accounts for over 60% of the nationalelectricity usage. This figure is fairly typical of most of thedeveloping world and from the foregoing represents a verysignificant potential target market in excess of tens ofthousands of megawatts


Greenstone Energy

Investments made by Greenstone will support ESG

issues while producing sustainable returns

Investors will have access to a portfolio of unique South

African utility assets

Niche assets and a diversifier to improve risk-adjusted

returns in portfolios and direct exposure to what is becoming

a defensive asset class

Uptake of renewable energy in the private sector is increasing rapidly from a relatively small base - market size (commercial and Industrial) estimated at R200bn

Exposure to a desired asset class through a listed vehicle that facilitates opportunities with accessto a highly skilled and experienced management team.

MANAGEMENT MARKET AND ASSET CLASS1 2

Greenstone to initially raise capital by issuing equity, with the prospect of issuing a ZAR

X listed Sukuk in 2020

BBBEE and listed status should lead to a healthy

pipeline of opportunities and preferential access to transactions, driving

enhanced returns

Regulatory safeguards through ZAR X Listings

Requirements that protect investors and all business

activities in compliance with Shariah principles

Incorporating BBBEE and ESG principles thereby assisting in

unlocking South Africa’s economic potential

Long term partners focused on building sustainable long-

term growth and value for investors

Experienced management team with extensive energy,

banking and government experience

Ability to source deals through extensive network of

team members

Aligned incentive structure since team will have “skin in

the game”

STRUCTURE3 FINANCIAL

A robust pipeline of long tenure, high yield renewable energy projects (a number of

signed PPAs and LOIs)

Strong annuity income with the potential for capital

growth through Greenstone’s unique digital platform

YOY revenue growth expected to exceed 50%

Conservative use of gearing so as not to increase

unnecessarily for risk to the underlying portfolio entities

4

Investment highlights

In a relatively short space of time since inception, Greenstone has built a significant pipeline ofopportunities for independent power generation plants for a range of clients in the Commercial andIndustrial sectors. Solutions include Solar PV, Solar Thermal, Wind, Gas Turbines and Hybrid Solar andGas Plants. As of October 2019, Greenstone has letters of intent or signed PPAs for the funding, design,construction and operation for 12 power plants with a combined capacity in excess of 28.6 MW and acapex cost of approximately R386m. Greenstone has completed prefeasibility studies includingengineering designs and techno-economic analysis for each of these proposed plants. A further pipelineof 28 power plants are in the process of being secured with a combined capacity in excess of 128 MWand capex cost of approximately R1.6bn.

4 Projects currently under

construction

8 additional projects with PPA’s

being finalized

Plant Type Plant size Capex IRR PaybackHybrid Gas & Solar 26,976 372,054,660 >30% <4Solar PV 1,589 14,145,250 >30% <2Total 28,565 386,199,910 >30% <4


Greenstone Energy

Greenstone aims to be the dominant Independent Energy Utility in the region. It will continually innovate its

already disruptive business model to provide affordable power to commercial and industrial clients

Investments

Focus initially on the delivery of generation facilities to clients that are under 10MW Invest in technologies including, inter alia: Solar PV, Solar Thermal, Concentrated Solar Power (CSP), Gas

Turbines and Generators, Solar-Gas Hybrid Plants Wind Generation and Solar-Wind Hybrid Plants, ShallowGeothermal Energy for Heating and Cooling, Energy Storage including Li-Ion Batteries and Fuel Cells PPAs to be structured between 3 and 20 years with a payback period of less than 5 years, with an option for the

client to purchase the project from the outset or during the term of PPA at a pre-determined formula

Geography Greenstone will initially focus on Gauteng, North West, KwaZulu-Natal and the Western Cape but with an extendedreach throughout South Africa

Size of opportunity Target average investment size of c. R20mil – R50mil

Client profile The nature and history of the client’s business should mitigate financial risk and warrant the signing of a long-termPower Purchase Agreement (PPA) with Greenstone

Investment return target

Greenstone aims to deliver a target gross weighted average IRR of >30% or greater over a 20 year period on aproject level; and A total IRR of >20% for an investor over a 20 year period

Funding Greenstone will fund projects that meet the above criteria using funds raised from the initial public offering and/or

private placement and for larger projects with several phases of development, Greenstone will issue special purposeSukuk bonds to pre-qualified investors through the ZAR X Stock Exchange

Investment philosophyGreenstone will seek to invest in a diverse range of power generation technologies to build customised power plants for each client’s individualneeds. In terms of the Electricity Regulations Act, any project less than 1MW will not require a license but rather just registering with NERSA.Projects between 1MW and 10MW will require a license but no ministerial approval. This regulatory regime adequately provides for the rollout ofthe Greenstone business model with minimal regulatory procedures to be followed for typical projects.

Prefeasibility Financing Engineering and designFeasibility

Range of digital tools and software applications are deployed to allow secure remote monitoring and cloud-based management of sites

1 2 3 4

Greenstone to liaise with approved list of EPC contractors to finalise project design and costing

Feasibility and potential value creation plan

Technical viability and competitiveness

Financial viability Legal

Proposed project should meet the financial hurdle rates required of a Greenstone approved project including IRR and payback period

Engineering designs and techno-economic analysis for each of the proposed plants

Commissioning operations and maintenance

Engineering procurement & construction

Carbon credit management

7 6 5

Information reports available in real time and can be accessed through any connected device

EPC contractors to execute the construction of the plant and sign off

Investment process

Investment philosophy and process


Greenstone Energy

ChairmanB.Sc Engineering (UCT), MBA (Newport University), M.Sc Engineering (UCT) Extensive executive experience to CEO level in the Energy, Mining and Telecommunications Industries Power and New Energy Director at WorleyParsons Advisian for EMEA MD of WorleyParsons Advisian for Sub Saharan Africa Chairman and CEO of Areva for Sub Saharan Africa Executive Head of Strategy at Harmony Gold Head of the Presidential Task Team on Y2K during President Mandela’s Term in Office Director and Executive at the CSIR Capital Program Manager at Eskom

Mohamed Mahdi

Chief Executive OfficerB.Sc.Eng.(Elect) (University of Durban, Westville) Prolific entrepreneur in the Energy, IT and Retail Industries Over twenty years at Eskom in various senior management roles Co-founder of an energy management software company supplying specialised utility management software to Eskom Extensive Business Development experience over two decades in the energy industry

Hoosen Khan

Chief Engineering Officer Mushir has 25 years experience as a practicing engineer in a variety of large scale projects across the African

continent Headed the overall Engineering function for WorleyParsons Sub Saharan Africa covering all disciplines of Engineering

including Electrical, Mechanical, Chemical, Process and Civil and Structural Engineering Extensive experience in the Power and Renewable Energy sector having managed utility scale gas fired and

renewable energy power plants Responsible for all WorleyParsons renewable energy projects delivered during the REIPP rounds 1 to 3 including the

largest solar plants built in South Africa Similarly, Mushir was responsible for the delivery of both the Concentrated Solar Plants built as part of the REIPP

Mushir Khan

Executive team

Chief Project OfficerB.Eng and Hons. B.Eng (Elec) as well as an M.Eng (Nuclear) from NW University Chris has managed multiple power and renewable energy projects across Africa and the Middle East Delivered South Africa’s largest wind farm projects as part of the REIPP program Prior to joining Greenstone Energy, Chris was a Project Director at WorleyParsons Advisian Former senior engineer at the Pebble Bed Modular Reactor Extensive experience in wind, waste to energy, nuclear, solar and gas fired power plants Responsible for the Programme Management of all of WorleyParsons Advisian energy projects in Africa and the

Middle East

Chris Els


Greenstone Energy

Company SecretaryB.Com (University of Durban,Westville), Diploma in Investment Management (Cum Laude) (University ofJohannesburg) Involved in the legal and compliance disciplines for over 30 years, predating the Basle Committee and the King

Commission. Successfully introduced, established and implemented legal and compliance processes including good governance

requirements at Eskom, the Public Investment Corporation and Riyad Bank. During his tenure at Eskom and the PICcorporate governance was more highly rated by agencies then at any other time.

Practised as an independent attorney (lawyer/barrister) for 5 years. Contributed to the Corporate Governance Regulations of the Capital Markets Authority in Saudi Arabia. Significant experience in the structuring of bespoke Power Purchase Agreements and related independent utility-

based contracts.

Chief Regulatory Policy and Compliance Officer Former Advisor to the Minister of Energy (D Peters) Executive Director for SASTELA (South African Solar Thermal Industry Association) Executive Director – South African Solar Energy Corporation (SASEC) Special Advisor on Solar Special Economic Zones (SEZ’s) Significant Project Development Experience as an IPP in the Gas and Solar Industries

Jonathan De Vries

Executive team

Farouk Amod

Chief Investor Relations OfficerActuarial Science (University of Natal) (Summa Cum Laude), Advanced Maths of Finance Honours Extensive experience in the banking industry and capital markets Senior management roles at Nedbank and Standard Bank Executive at Investec bank heading the division providing structured investment products to large non-bank financial

institutions (mainly asset managers / hedge funds / medical aids / insurers). Responsible for the management and control of the capital and liquidity aspects for the Investec Group

Saabir Karim


Greenstone Energy

Chief Portfolio Manager OfficerMBA (De Montford University) Extensive experience in the Energy and Mining Industries Non Executive Director at the Council for Scientific and Industrial Research (CSIR) Advisor to the Task Team at the Department of Science and Technology on Hydrogen and Fuel Cell Research Prolific entrepreneur in the Gas Industry in South Africa and the Middle East

Cassim Shariff

Executive team

Chief Sales and Marketing OfficerB.Com (University of Johannesburg), Diploma in Project Management (Cranefield College) Extensive experience in negotiating large complex long lead time deals in a variety of industries including Telecoms

and Energy Involved in national marketing initiatives at Mercedes Benz South Africa Senior management and executive roles in the ultra-luxury goods business and the retail automotive industry Significant national achievements and recognition in maximising sales and dealership profitability and brand marketing

building high value sales channels

Rifaat Bamjee


Greenstone Energy

Legal noticesThe information and content (collectively ‘information’) provided herein are provided by Greenstone as general information forinformation purposes only. Greenstone does not guarantee the suitability or potential value of any information or particular investmentsource. Any information herein is not intended nor does it constitute financial, tax, legal, investment, or other advice. Before making anydecision or taking any action regarding your finances, you should consult a qualified Financial Adviser. Nothing contained hereinconstitutes a solicitation, recommendation, endorsement or offer by Greenstone.

CopyrightThe information provided herein is the possession of Greenstone and is protected by copyright and intellectual property laws. Theinformation may not be reproduced or distributed without the explicit consent of Greenstone.

DisclaimerGreenstone has taken care to ensure that all information provided herein is true and accurate. Greenstone will therefore not be heldresponsible for any inaccuracies in the information herein. Greenstone shall not be responsible and disclaims all loss, liability orexpense of any nature whatsoever which may be attributable (directly, indirectly or consequentially) to the use of the informationprovided.

Contact detailsShould you have any questions about the detail provided in this document and you would like to meet with management to discuss theinvestment opportunity in greater depth, please contact us on the following details:

Corporate advisor and bookrunnerShaun [email protected]+27 82 479 7147


Greenstone Energy

GROUND FLOOR, JINDAL AFRICA BUILDING22 KILDOON RD, BRYANSTON

JOHANNESBURG, SOUTH AFRICA, 2191

Documents

Teaser GREENSTONE ENERGY - Afrifocus€¦ · Teaser document. 2019. PRIVATE & CONFIDENTIAL. P 1 I Strictly private and confidential. Greenstone Energy Targeting a R2bn – R3bn market