1. Renewable Energy Projects Financing Issues David A. Perlman Managing Director Fieldstone Private Capital Group, Inc. January 19, 2007

2. 1 F IELDSTONE IS AN INVESTMENT BANKING FIRM FOCUSED ON ENERGY AND INFRASTRUCTURE

3. 2 Fieldstone Summary Founded in 1990 Independent, employee owned company Headquartered in New York with four international offices: London Johannesburg Berlin Hyderabad (India) Provides financial advisory and capital raising services Arranges financing to optimize capital structure Unique combination of project and corporate advisory experience Free of product conflicts Senior bankers actively involved in every assignment

4. 3 Renewable Energy Project Summary Project Financed Multiple off take parties Multiple financing parties looking at stand-alone credit Government incentives Risks allocated to suitable parties Highly structured Generally more expensive cost of capital than recourse financing Renewable technology can be Established Scale-up New

5. 4 Stand-Alone Project Financial Projects Each party must have an incentive to participate Developer Financiers / Investors Construction contractor Operator Suppliers Off taker (utility) A fixed amount of capital is available for financial incentives Revenues Subsidies

6. 5 Maximizing the Impact of Subsidies Tax subsidy issues Limited investor pool energy focus tax base Structural complexities Inefficient economically Complex documentation Cash subsidy is preferable but not perfect Available to all parties Preferable to financiers Does not introduce structural complexities

7. 6 Incentives to Maximize Revenue Renewable Portfolio Standards Off taker needs portfolio of renewable projects Off taker pays what is required to meet RPS Renewable PPAs Profit incentive for off taker Old rate base system Allowing more than a pass trough on PPAs Who ultimately pays increased cost of power Ratepayers? Taxpayers? How significant is the difference?

8. 7 Incentives to Limit Costs and Expenses Construction EPC vs. open book Who covers cost risks in open book? Financial parties Off taker Operations Feedstock costs, if any Equipment warranties Finance and ownership Project finance structure with tax investor Traditional project finance structure Off taker ownership and finance

9. 8 Are We Communicating with Each Other? Finance Technology Public Policy