FOR SIXTY YEARS WE HAVE BEEN TAKING THE POWER FROM WATER AND HANDING IT OVER TO NATIONS LINKING THE DOTS Bucharest, February 20, 2014

ISPH PROJECT DEVELOPMENT A GREAT COMPANY IS EXACTLY THE SUM OF ALL ITS SERVICES HYDROPOWER WATER INFRASTRUCTURE ENVIRONMENTCONSULTANCY

ISPH PROJECT DEVELOPMENT OVER 60 YEARS OF HYDROPOWER DESIGN st Hydro Engineering Department Institute of Hydroelectric Studies and Design Private ownershipISPH Project Development 900 KM OF TUNNELS AND GALLERIES 150 LARGE DAMS 180 HYDROPOWER PLANTS 6000 MW INSTALLED CAPACITY 60 YEARS OF ENGINEERING

WHY HYDROPOWER? Hydropower is Romania’s most available, reliable, affordable and sustainable energy source Requiring only the power of moving water – rivers and streams – hydropower is also domestic and sustainable Hydropower is free from a dependence on volatile fuel prices

HYDROPOWER IS AVAILABLE Hydro is Romania’s largest source of clean electricity, accounting for over 90 percent of all renewable energy generation in Romania and a third of total electricity generation Hydropower has generated clean, affordable electricity for more than 100 years, but it has yet to realize its full potential

HYDROPOWER IS AVAILABLE Much of hydropower’s future growth can be focused on facilities and infrastructure already built Modernization projects upgrade turbines and other equipment, expanding the capacity and lifespan of existing hydropower facilities The process of upgrading Romania’s hydropower facilities has already begun, with great success

HYDROPOWER IS RELIABLE Hydropower has been a reliable source of power in Romania for over a century Based on a constant source of energy hydropower can support other renewable energy sources as they are brought onto the grid Pumped storage can help store the electricity generated by other power sources for later use

HYDROPOWER IS AFFORDABLE Hydropower is among the most cost effective energy sources across the board Hydropower offers the lowest levelized cost of electricity across all major fossil fuel and renewable energy sources Hydropower generating equipment can often operate for long periods of time without needing major replacements or repairs

HYDROPOWER IS SUSTAINABLE Using hydropower avoids more than 10 million tons of carbon pollution in Romania each year Energy and water for sustainable development depend not only on supply choices, but also on how these choices are implemented

HYDROPOWER PROJECTS DEVELOPMENT OVERVIEW Private involvement in the energy sector is becoming increasingly important as public funding diminishes Hydropower projects will have to compete for financing on the same terms as other projects, both in public budgets and in the private market Hydropower projects involve large up front investment, and are often regarded as high risk compared to other type of power projects

HYDROPOWER PROJECTS DEVELOPMENT SMALL HYDROPOWER PROJECTS – PARTICULAR ISSUES Small hydropower projects, i.e. those with a maximum output of less than 10 MW, often have additional features that make them less profitable and thus more difficult to finance than larger projects. Several of the cost components involved in developing hydropower do not change proportionally with project size.

HYDROPOWER PROJECTS DEVELOPMENT SMALL HYDROPOWER PROJECTS – PARTICULAR ISSUES As the expected revenue of the project is small, there is little capacity to absorb unforeseen expenses Consequently the economic feasibility of a small project is very cost-sensitive and the risk is higher than for larger projects Tight cost control is necessary to succeed

HYDROPOWER CONSULTANCY THE KEY ROLE OF HIGH QUALITY ENGINEERING SERVICES High quality engineering services has an important role in: - reducing the cost of development and financing to make the project more profitable - reducing the risks involved in small hydropower development and operation to make projects more attractive to developers and financiers

HYDROPOWER CONSULTANCY THE KEY ROLE OF HIGH QUALITY ENGINEERING SERVICES Cost reduction strategies Area development package. The joint development of a number of small hydro projects in an area has multiple cost-saving effects. Multi-disciplinary development groups. Supported by an experienced consultant, the development group will develop experience in all fields, enabling them to quickly evaluate the feasibility of proposed projects

HYDROPOWER CONSULTANCY THE KEY ROLE OF HIGH QUALITY ENGINEERING SERVICES Risk reduction strategies Accurate data assumption. Hydropower developers rely on measurement of stream flow and rainfall to estimate power production and floods Stepwise development. Stepwise increase in the production capacity reduces the up front investment, and the debt obligations can more easily be adjusted to the economic strength of the project

LINKING THE DOTS WHERE DO YOU NEED ISPH? Regulatory requirements, planning and permitting Environmental solutions Preliminary and detailed hydropower design Construction management Start-up and commissioning Power delivery

ISPH PROJECT DEVELOPMENT BY ENGAGING US, YOU GET ACCESS TO Our multi-disciplinary design team who mixes expertise and proven reputation for quality design hydropower projects Comprehensive services and expertise in regulatory requirements, planning and permitting to ensure hydropower project success The expertise of our valued associates and advisors, well known names in their respective fields

THANK YOU! HYDROPOWER WATER INFRASTRUCTURE ENVIRONMENT CONSULTANCY 293 Calea Vitan, Bucharest Romania T +40 (0) , F +40 (0) , E W