The BC Cleantech Sector

Department of Foreign Affairs and International Trade Canada March 2013

• SDTC is a policy delivery instrument of the Government of Canada to

deliver environmental and economic benefits to Canadians.

• As a delivery agent, we foster the development and demonstration of

technological solutions that address:

• Forge innovative partnerships and build a sustainable development

technology infrastructure.

• Ensure timely diffusion - increase number and rate of uptake of

technologies into the marketplace across Canada, providing national

benefits.

• Clean Air

• Climate Change

• Clean Water

• Clean Land

SDTC Mission and Mandate

SDTC’s Mission: “The Foundation will act as the primary catalyst in building a

sustainable development technology infrastructure in Canada”.

Why is the BC Cleantech cluster so

robust? • Lower mainland / Vancouver: a small city in stunning physical environment; has great

Universities and Colleges; a Pacific port - all which helps drive collaboration and

connectedness to take action on global climate change

• Legacy of venture growth tech companies and cleantech venture capital

Corporate Tech Successes Venture Capital + Angel Networks

- MDA Yaletown Ventures, Chrysalix Energy

- Ballard Pangaea Ventures, BDC VC, Growthworks

- Creo Renewal, active Angel networks

• Several other growing tech clusters: wireless, life sciences, digital media, software

• BC carbon policy landscape:

• Standards (Regulation) :GHG Reductions Act, Vehicle Emissions Standards,

Landfill Gas Act

• Investments (Programs): Livesmart; Innovative Clean Energy Fund; Pacific

Institute for Climate Solutions

• Carbon Pricing: Carbon Tax Act, Western Climate Initiative (Cap and Trade),

Pacific Carbon Trust

2006

2011

2020

SDTC and its partners are equipped to double Canada’s share of the rapidly growing global cleantech market

Cleantech Presents a Significant Export Opportunity for Canada

2006 2011 2020

Global Market Size $100 billion $1 trillion $3 trillion

Canadian Revenues not available $10.6 billion $62 billion

Share of Global Market not available 1% 2%

Direct Canadian

Employment not available 52,600 jobs 126,000 jobs

Source: Analytica Advisors

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By 2020, the clean

technology sector will be

the third largest global

industrial

sector

Canada’s Clean Technology Industry

OVER 700 COMPANIES IN ALL REGIONS

Source: Analytica Advisors

TEN SECTORS AND 60 SUBSECTORS

BC’s Clean Technology Industry

Canadian Clean Technology Exports

• 80% of Canadian Cleantech companies export

Compared with 9% of all Canadian SMES

• 55% of these companies are exporting to non-U.S. markets

• 53% of revenues are from export sales

30% of revenues were from U.S. exports

23% of revenues were from non-U.S. exports

Source: The 2011 Canadian Clean Technology Industry Report, Analytica Advisors

Source: Industry Canada, Canadian Small Business Exporters, June 2011

To build a successful Cleantech business, going global is an essential component for all companies, large or small.

Canadian SME’s are leading the way.

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• China: solar and wind

manufacturing: what’s

next?

• Natural gas glut

reshaping the clean

energy landscape

• “Hot” sectors: energy

efficiency, energy

storage, new

materials, ag-tech,

resource efficiency,

cleaner fossil

fuels/”dirty” or “energy”

tech

• VC investment down

considerably in 2012

• VC moving to “capital

efficient” deals, later

stage rounds

• Exits (IPO + M&A

market) evaporating

• Corporate VC

(Strategics) capital filling

the gap

Clean Technology Trends

SDTC has reviewed over 2,300 initial applications en route to funding over 240 technology projects since 2002

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• $590 million SD Tech Fund™ launched on April 4, 2002.

• Aimed at development and demonstration of emerging clean technologies.

• $592 million allocated to 245 projects.

• $500 million NextGen Biofuels Fund™ launched on September 12, 2007.

• Aimed at establishment of large demonstration-scale facilities for next-generation renewable fuels and co-products.

• Three funding decisions have been made, two applications are in due diligence and six Indications of Interest are expected to be converted into applications for funding in the near term.

Technology Fund Manager

Cleantech Innovation Chain

Stages of Technology Development

Fundamental

Research

Applied

Research

Technology

Development & Demonstration

(Pilot to Full Scale)

Product

Commercialization

& Market

Development

Market

Entry

&

Market

Volume

Risk Profile

Technology

Financial

Technology

Market

Financial

Technology

Market

Financial

Market

Financial

Market

Financial

Operational Operational Operational

10

11

SDTC funding address the pre-commercial funding gaps in the Innovation Chain

Fundamental

Research

Technology Development and

Demonstration(Pilot to Full Scale)

Product

Commercialization & Market

Development

Market Entry

& Market Volume

Pre-IPO

Gap

Funding Intensity

Pre-

Commercial

Gap

Angel

Governments

Industry Industry

Applied

Research

Project Finance

Public Markets

High CAPEX

Gap

Early VC

Banks

Pension Funds

SD Tech Fund ($590M) NGBF ($500M)

The sources of funding in the Innovation Chain are predominantly available for research and commercialization

Funding Model Ensures Market and Commercial Relevancy

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SDTC buys down risk associated with bringing new technologies to market enticing the private sector to co-invest

SDTC Funding $’s = 1/3 of Project Costs

Project Consortium $’s = 2/3 of Project Costs

SME Applicant

(Technology)

Key Services Supplier

Other (Government)

Value Added Channel Sales

Customer (Demonstration

Host)

Key Hardware Supplier

$

SDTC de-risking solutions for global supply chains

Fundamental

Research

Technology Development

and Demonstration (Pilot to Full Scale)

SD Tech Fund

Applied

Research

Market

Entry &

Market

Volume

Product

Commercialization

& Market

Development

Commercial Market Rollout –

Connecting Portfolio solutions

with MNEs

De - risking

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SDTC’s value proposition is to provide a steady supply of field proven or plant proven technology for commercial sale or licensing to large

multi-national enterprises (MNEs)

SD Tech Portfolio – Segmentation by Market Sector

SDTC supported projects contribute technology solutions to major economic sectors in Canada, reducing costs while

increasing productivity and competitiveness

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as of December2012

$50M (8%)

$34M (6%)

$29M (5%)

$99M (17%)

$142M (24%)

$115M (19%)

$123M (21%)

$0 $20 $40 $60 $80 $100 $120 $140 $160

Waste Management

Forestry, Wood Products and Pulp & Paper Products

Agriculture

Transportation

Energy Utilization

Power Generation

Energy Exploration and Production

$M

SDTC’s current investment into 245 projects is $592M.

as of December 2012

Alberta

Saskatchewan

Manitoba

Ontario

$548M $413M

$20M

$665M

$358M

$8M

$5M

$59M

$1M

British Columbia

New Brunswick

Nova Scotia

Prince Edward

Island

Newfoundland

$62M

Québec

Energy Exploration and Production

Power Generation

Energy Utilization

Transportation

Agriculture

Forestry

Waste Management

Shading indicates Leveraged Funding

SDTC & Leveraged Funding by Sector and Province

SD Tech Fund Investment Portfolio –

Country-Wide

Leveraged Funding is high, particularly at this stage of technology risk

• $1.5 Billion leveraged from consortia members

Industry contribution is strong

• $1.3 Billion leveraged from industry, including corporations and venture capital investors

Small and Medium Sized Enterprises

• SMEs drive innovation in Canada and represent more than one-quarter of the economy. Over 90% of SDTC's portfolio is SME led.

245 Projects

Total Eligible Project Costs

$2.1 B

SDTC Contribution

$592 M (28%)

Leveraged Funding

$1.5 B (72%)

Industry Leveraged Funding

$1.3 B (82%)

Other Funding*

$275 M (18%)

Numbers as of December 2012

* Includes funds from federal departments, provincial governments and academia

Private industry in Canada is supporting cleantech, providing 82% of all leveraged funding into SDTC projects

Demonstrated results in leveraging private

sector capital

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BC Portfolio – 58 Projects in 7 Key Sectors

Sector

Total BC Portfolio $157M $548M

Lead Consortia Partner SDTC

Investment $

Total Project Value $

Energy Exploration and Production

Sacré-Davey Innovations $5,727,711 $17,681,710

Power Diagnostic Technologies Ltd. $1,164,407 $3,489,382

InvenTyS Thermal Technologies Inc. $1,598,001 $3,914,947

Diacarbon Energy Inc $1,050,000 $3,508,000

Energy Utilization

Carmanah Technologies Inc. $466,167 $2,035,062

IBC Technologies Inc $183,150 $877,150

University of British Columbia $2,408,702 $7,299,098

EcoSmart Foundation Inc. $1,866,630 $3,828,862

Nutriloc Ingredients Corporation $847,319 $2,404,493

Power Measurement Ltd. $2,960,871 $9,104,666

Fuseforward International Inc. $400,000 $1,523,921

SunCentral Inc. $2,345,208 $7,035,838

dpoint Technologies Inc $1,531,394 $3,582,961

SunSelect Produce (Delta) Inc. $1,672,425 $5,609,006

Pulse Energy Inc $2,556,801 $8,552,915

S2G Biochemicals Inc. $2,387,070 $7,211,699

SWITCH Materials Inc. $2,363,621 $7,369,216

CoolEdge Lighting Ltd. $4,181,955 $11,231,677

Power Measurement Ltd. $1,702,882 $5,108,646

NuWave Research Inc. $2,030,000 $5,610,000

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Sector Lead Consortia Partner SDTC Investment $ Total Project Value $

Power Generation

West Lorne Bio-Oil Co-Generation Limited Partnership $5,000,000 $12,215,947

NxtPhase T&D Corporation $887,598 $3,614,695

Xantrex Technology Inc. $1,213,614 $3,677,618

Clean Current Power Systems Incorporated $1,582,000 $4,795,500

Angstrom Power Incorporated $169,752 $1,263,271

Tantalus Systems Corp. $2,981,310 $11,079,087

MSR Innovations Inc. $680,839 $1,512,976

General Fusion Inc. $13,897,455 $63,548,185

Exro Technologies Inc. $881,235 $4,001,042

Quadrogen Power Systems, Inc. $2,910,145 $7,441,221

Etalim Inc. $2,935,340 $9,651,600

Ballard Power Systems Inc. $7,304,367 $22,141,838

PAVAC Industries Inc. $3,549,865 $10,526,620

Shipstone Corporation $2,513,498 $5,294,474

Agriculture

Middle Bay Sustainable Aquaculture Institute $5,768,999 $17,129,821

Namgis First Nation $2,650,000 $10,589,812

semiosBIO Technologies Inc $2,750,000 $8,118,304

BC Portfolio – 58 Projects in 7 Key Sectors

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Sector Lead Consortia Partner SDTC Investment $ Total Project Value $

Transportation

Westport Innovations Inc. $1,000,000 $3,115,376

PlugPower Canada Inc. $2,000,000 $9,026,000

RailPower Technologies Corp. $584,079 $1,634,600

M.A. Turbo/Engine Ltd. $152,844 $332,604

Advanced Lithium Power Inc $1,400,000 $5,534,876

NxtGen Emission Controls Inc. $2,265,194 $9,509,955

HTEC Hydrogen Technology & Energy Corp. $4,014,212 $11,150,588

Automotive Fuel Cell Cooperation Corp. $11,558,274 $51,997,205

Ballard Power Systems Inc. $6,905,887 $32,391,589

Corvus Energy Ltd. $1,238,984 $3,754,497

Westport Power Inc. $2,302,834 $18,753,644

Whale Shark Environmental Technologies Ltd. $646,000 $1,756,909

Forestry, Wood Products and Pulp & Paper Products

Lignol Innovations Ltd. $6,240,816 $20,325,922

Nexterra Energy Corp. $1,159,518 $3,513,692

Nexterra Energy Corp. $5,518,777 $17,563,845

Alterna Energy Inc. $1,254,317 $8,891,092

Lignol Innovations Ltd. $6,870,561 $20,632,316

Waste Management

Paradigm Environmental Technologies Inc. $250,000 $1,208,804

Ostara Nutrient Recovery Technologies Inc. $375,760 $1,777,628

Saltworks Technologies Inc. $2,612,638 $8,064,022

Minesense Technologies Ltd. $1,475,000 $3,954,848

BC Portfolio – 58 Projects in 7 Key Sectors

Getting Technologies to Market

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VC/PE,

Public, Debt,

Asset-

backed, etc.

Access to Capital

& Technology Markets

Customers,

Partners,

Aggregators

TECH

ADOPTION FOLLOW-ON

FINANCING

SDTC and its

Portfolio Companies

Accelerating the access to key market players for SDTC’s predominantly

SME portfolio companies by leveraging

SDTC’s relationships, market access and brand

Investment Returns &

Strategic Benefits

The Markets

Investment Commercial

SDTC key G-T- M Partners: Export Development Corporation (EDC) and DFAIT

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52 companies into which SDTC has invested $168M have raised $2.3B in follow-on financing from the private sector in the past seven years.

*Based on publicly disclosed financings to SDTC-funded companies as of December 31, 2012.

Helping High-Growth Firms Access Risk

Capital

Cleantech Commercialization Strategic Partner

Works with SDTC in a variety of ways, including the ones

identified below, to accelerate the market entry of clean

technology from development through full commercialization.

SD Tech Fund

Virtual Incubator

Works with SDTC at the

technology incubation level,

evaluating next generation

clean technologies for

demonstration or investment.

Technology

Demonstration

Partner

Works with SDTC at the

technology demonstration stage

by acting as a demonstration

host or a co-investor for an

SDTC supported technology.

Follow-on

Financing

Partner

Works with SDTC at the

expansion stage of an SDTC

supported technology

company by investing in the

company.

Partners: Broad group of

investors, investment banks,

angels etc.

Supporting Partner:

Technology

Adoption

Partner

Works with SDTC at the stage of

early market entry of SDTC

supported technologies by

incorporating the technology into the

company’s own business or

providing it as a product or

component of their offerings to end-

use customers.

Partnering with Global Leaders

Sustainable Development Technology Canada

Montreal Office:

Place Ville Marie

1, Place Ville Marie, Suite 2001

Montréal, Québec H3B 2C4

(514) 448.4885

Toronto Office:

First Canadian Place

100 King Street W., Suite 3700

Toronto, Ontario M5X 1C9

(416) 644.8726

Vancouver Office:

World Trade Centre

999 Canada Place Suite 404

Vancouver, BC V6C 3E2

(604) 844.2857

Head Office:

World Exchange Plaza

45 O’Connor Street, Suite 1850

Ottawa, Ontario K1P 1A4

(613) 234.6313

For More Information

Paul Austin, Regional Director, Partnerships p.austin@sdtc.ca Office: + 1 604 844 2857 Mobile: + 1 604 761 0849