European Bank for Reconstruction and Development Financing Renewable Energy Projects in Bulgaria Anton Kobakov Senior Banker RO Sofia, Bulgaria

What is the EBRD? International financial institution, promoting transition to market economies in 29 countries from central Europe to central Asia Owned by 61 countries and two inter- governmental institutions Capital base of €20 billion Cumulative commitments €36.9 billion January 2008

EBRD and Renewable Energy €1.7bn invested in sustainable energy since Mai 2006 until 2007 (of which €147mn in renewable energy), whereby the total projects value reached €7.8bn Direct project financier and equity investor in renewable projects Indirect investor via funds and local banks Renewable Energy sector is in development across region, and is a key priority for EBRD

EBRD: Your partner in Renewable Energy We believe that renewable energy must be a significant growth market in our countries of operation… …our backing can help to realise this growth EBRD is actively working to remove the obstacles to renewable energy: – Bringing liquidity to the market through catalysing renewable energy equity fund, advancing credit lines, making own investments and engaging in carbon finance – Actively engaging in policy dialogue with EU and local bodies – Using technical cooperation funds to stimulate developments

EBRD’s Role Strengthening the market economy Stimulating energy efficiency Monetising carbon credits Mobilising technical assistance Flexible, Innovative, Connected

EBRD: Stimulating renewable energy Dedicated Power & Utilities Team Pioneering renewable energy projects and promoting good practice Specialists in project financing, carbon finance and energy engineering Delivering innovative financing to projects enhancing energy efficiency

EBRD: Monetising carbon credits Manager of Dutch Carbon Fund, creating Multilateral Carbon Fund Founder of the €165m Multi-Lateral Carbon Credit Fund (MCCF) with EIB Will purchase carbon credits from EU ETS, JI and CDM in Bank financed projects In-house expertise to guide clients through monetisation of carbon from ‘PIN’ to ‘ERPA’ Balanced and well-structured carbon transactions to enhance project viability

EBRD: Mobilising technical assistance Funds available for market studies, project feasibility, technical cooperation… Assisting committed sponsors in early project development phases

Flexible Wide palette of financial instruments: Debt & equity; guarantees; credit lines; equity funds Long-term partner: Offering longer tenors than market norms; partnering at an early stage Public and Private: Invest with and through public and private operations; engaging with Government bodies on projects and policy

EBRD Financing Instruments Senior, subordinated debt, convertible Syndication Maturities years Denominated in major currencies Flexible, tailor-made security package Common stock or preferred shares Minority positions only Flexible exit strategies Mezzanine loans Debt Equity / Mezzanine

Connected In-depth understanding of region: 36 offices across region; experience through “rough and smooth” from Russian crisis to EU Accession Deep commercial expertise: Team staff from leading banks, funds and industry Catalyst for commercial investment: Syndicating transactions to mobilise private capital. €3.1 mobilised from other sources for every €1 invested by the EBRD

EBRD Financing Principles Sound integrity Transparency / early dialogue Proven track record and market knowledge Equity cash exposure Clear business plan Robust creditworthiness –Equity investors – key driver: ROE –Project cash flows – key driver: DSCR

Some Typical Renewable Energy Project Considerations Electricity Pricing: Bulgaria has committed itself to increasing the amount of renewable energy and will need to maintain sufficient off-take prices to achieve this. Environmental Issues: ensuring best practice Environmental Impact Assessments. Implementation: experienced Sponsors, reputable equipment suppliers and construction companies Operational (Wind/Hydrological) Resources: min one wind data/LT representative hydrological studies required; data available and studies carried out by experts in the field; further due diligence to ensure that the forecasts comply with proven methodology.

Selected Reference Project in Bulgaria

Contact James HyslopAnton Kobakov Director, BulgariaSenior Banker EBRD Sofia Office 17 Moskovska St. Sofia 1000 Tel: / 401 / 421 Fax: