Introduction to Agua Imara - By Einar Stenstadvold Chief Executive Officer

Introduction to Agua Imara

     By Einar Stenstadvold
     Chief Executive Officer

Content
► The Mission and Business Model

► Ambitions and Experiences

► Agua Imara has started construction of Hydropower plant in
  Panama

► Agua Imara has acquired Hydropower company in Zambia

► Agua Imara is targeting Mozambique

”Hydropower”

Agua means Water or Hydro in Spanish and Portuguese
     Imara means Power or Strength in Swahili

Our mission:

   “To become a leading renewable energy company in
               Africa and Central America,
with a main focus on hydropower, contributing to economic
          growth and sustainable development”

Agua Imara’s Owners:
Statkraft Group
► Europe’s largest renewable energy company
► 282 plants, 16 000 MW and 57 TWh in power production

Norfund
► The Norwegian Investment Fund for Developing Countries
► Africa is a priority

SN Power Group, Established June 2002
► Owned by Statkraft (60%) and Norfund (40%)
► 16 power plants (15 hydro, 1 wind), 1 140 MW and 5.0 TWh

BKK
► 31 hydro power plants, 1,685 MW and 6.7 TWh

Trønder Energi
► 19 hydro power plants and two wind‐power plants 490 MW and 2.1TWh

It is our owners heritage and experience we sell to the
   markets in Central America and Sub‐Sahara Africa

► Hydropower equals electricity in Norway , and using this tremendous experience
   and expertise “is” Agua Imara:
    •   More than 100 years of Norwegian hydropower development
    •   10 years of pioneering efforts by Statkraft in Laos and Nepal in the 90’s
    •   10 years of SN Power experience in Asia and South America after year 2000

► Agua Imara name and logo commits us to execute according to the heritage

► We must execute and operate hydropower better than most others

          It is our ambition to do everything we can to fill this role.
                         ‐ It is our “license to operate”

Renewable energy projects are
complex and expensive to develop

► Our best efforts include the following:
       Move people and resources into the project organizations
     Team up with the best possible local partners and consultants

     Follow international well proven standards of conduct

     Use our owners experience and methods

     Avoid using agents and expensive and risky middlemen

     Solve the “showstoppers” first

     Avoid “shortcuts”

               A well proven project process is a valuable tool,
                but do not substitute good business judgment

Agua Imara’s ambitions
► Have around 700 MW of Hydropower in operation or under construction by
  2015:
    What we announce so far can fulfill 1/3 of this
► Follow all important international standards of conduct and project develop ,
  such as:
   UN Global Compact
   World Bank Standards
► Develop a cost effective organization where we all take responsibility:
   Operate a classic Matrix Organization, either Line or Project
   Focus on a long term profitable operation

        Long term Profitability = Strong Partners = Control
          = Safety , Health and Environmental Quality

Organization structure Agua Imara

                     Agua Imara AS
    Headquarters Oslo ‐ 8 people + 3 full‐time consultants

                SN Power ACA Holding Pte Ltd
                           Singapore ‐ 1 person

Regional Branch Office                            Regional Branch Office
   Central America                                        Africa
      5 people                                           2 people

Fountain Intertrade Corp                          Lunsemfwa Hydro Power
  The Bajo Frio Project                                 Company
        Panama                                           Zambia
       15 people                                        61 people

Hydropower in emerging markets is business‐ not “aid”
 ► Agua Imara is asked to execute profitable projects with the following characteristics:
    Light environmental footprint
    Minimize negative social consequences without jeopardizing the positive once
    Hands‐on approach to minimize risk
    Avoid projects at a too early stage
    Maintain good, long term Corporate Social Responsibility Standards

 ► Poor countries cannot afford to subsidize commercial projects that are unprofitable
    Profitable projects pay taxes locally and in the host country
    Profitable companies create new jobs
    We use profits to reinvest

 ► Very few loss making businesses are socially profitable

The Bajo Frio Hydropower Project
  50,1% Agua Imara 49,9% CrediCorp Group

          ► 220 MUSD (1,2 Billion NOK) total investment
  ► Construction has started in 2011, in operation from early 2014
     ► 58 MW capacity ‐ 260 GWh average annual production

Lay out of the Bajo Frio Project

Agua Imara acquires 51% of Lunsemfwa
   Hydropower Company in Zambia

                        Lunsemfwa
                        Mulungushi

Facts about Lunsemfwa Hydropower Company
                                   ► Independent Power Producer established
                                      in 2001 when Zambian mining
                                      conglomerate ZCCM was privatized
                                   ► Owner/operator of
                                   •   two ageing hydropower plants (46.5MW) with
                                       two large upstream storage/regulation reservoirs:
                                       ‐ Mulungushi: 28.5 MW, 235‐250 GWh/year
                                       ‐ Lunsemfwa: 18 MW, 150‐160 GWh/year
Mulungushi
                                   •   66 kV transmission infrastructure
                                   •   80 km road network
                                   •   Lunsemfwa is currently being extended with
                                       another 6 MW.

                                   ► Off‐takers
                                   •   Zesco 95% (=Zambia’s “Statkraft”)
                                   •   Chiman 5% (Chinese mining company )

                                   ► Concession holder for Lower Lunsemfwa
                                       and Mukushi hydropower development
Lunsemfwa
                                       (200 MW ‐ 400 MW)

Big potensial in Lunsemfwa Hydropower Company

► Water use 38 m³/sec out of 60 m³/sec

► Side rivers downstream are not used

►“Head” use is 480 m out of 950 usable
 meters

► Simple mathematics shows a large
  potential

If we used 10 % of the likely expansion to
   electrification, we can electrify 10 % of
                 all households

Agua Imara in Mozambique

Agua Imara is currently looking into two projects in Mozambique

► Alto Malema (50‐60 MW)
   • The Alto Malema project is located about 10 ‐ 15 km north‐
     east of Gurue in the Zambezia Province. The project will
     transfer water from the Malema River to the Innari River

                                                                    Alto Malem
► Massingir (25‐60 MW)
    • The Massingir dam is located on the Elefantes River in        Massingir
      southern Gaza province and it is provided for a power plant
      at the foot of the dam.

Agua Imara in Mozambique
                         Cooperation with EDM

► Long lasting cooperation with EDM

► Before 2009 we pursued the development of a ROT scheme for the rehabilitation of the
   existing Chicamba and Mavuzi power plants, and signed an agreement with EDM in this
   regard – however, without reaching realization

► 2010/11: Signed a Master Cooperation Agreement (MCA) and
   a Joint Development Agreement (JDA) with EDM for the development of the Alto Malema
   project.
► Performed investigations of environmental and social impacts of developing Alto Malema
► Site visits to Alto Malema and Masingir
► Meetings with Prime Minister, Ministry of Energy, EDM, Ara ‐Sul

Mozambique – Alto Malema

► Utilizes a gross head of about 500 m metres

► Installed capacity is 60 MW and average energy
  production is 222 GWh/year

► Rock fill dam at the Malema river. Water transfer from
  reservoir through tunnel to powerhouse at the Innari
  river.

► Challenges:
   Inundation of land in the reservoir area; relocation of
   people, use of land in the buffer zone and availability of
   new farmland; Increased flow in the Innari river.
   EDM and Ministry of Energy to engage in proper
   mitigating measures.

Mozambique – Massingir
► The Massingir dam was built in the 1970s, but the civil war
  prevented its completion, notably the installation of the
  sluice gates.

► Between 2004 and 2006, the dam was rehabilitated, its
  height was raised and sluice gates were installed.

► In 2008, the bottom outlet pipes of the dam ruptured,
   causing substantial damage. Repair works are planned to
   start by end 2011.

► The development rights for a power plant are presently not
  clarified. EDM and Agua Imara is seeking to obtain these
  rights.

Water intake and location of damaged section at power house
                     location, Massingir

Agua Imara is ready to invest in Mozambique

► Alto Malema: As soon as it is clarified that possible environmental and
  social impacts of the project can be satisfactorily mitigated, Agua Imara is
  prepared to speed up project development.
  In this connection we need support and active participation from central
  and local authorities.

► Massingir: EDM and Agua Imara want to start development of the power
  plant. Thereafter the project can be efficient planned and built – in parallel
  with the planned repair works of the bottom outlet pipes and
  reconstruction of the irrigation capability. Agua Imara has unique
  experience in combining power production and irrigation.

www.aguaimara.com