Phat Nguyen spoke at VietPower 2009, an IBC Asia-organized energy conference, in September 2009 at HCMC, Vietnam

1. VIETPOWER Vietnam, September 2009 Private Equity Funds in Current Unstable Market Conditions

2. Agenda 1 Trends in equity financing for power projects in Asia 2 Sources of capital and structuring strategies 3 Mitigating risks in equity financing 2

3. What’s up lately? Dramatic fluctuations in crude oil prices The year 2008 was the first year that global investment in new power generation capacity from renewable energy projects ($140 billion) was more than investment in fossil-fuelled projects ($110 billion). A number of funds have turned their investment radars to clean energy 1 The rise in infrastructure funds also gives private equity investors a way to participate in the energy industry 2 Private equity firms are on the defensive. While firms once spent much of their time on deal generation, the emphasis now is on operations In the boom years from 2005 to 2007, private equity deals were completed with as little as 15% equity. Since the economic meltdown that began in late 2007, 35% to 40% equity has been required. Emergence of supplier credits and Shariah-compliant PE funds in equity financing (India, Indonesia…) It was very rare, to the point of never happening, that generalist private equity firms would dip their toe in the water of the hard-core energy space 3 4 5 6 3 Turbulences in the global financial arena The politico-environmental concerns about conventional energy use

4. Renewable power* Generation and Capacity (% of global power) 4

5. Sustainable energy in Asia Source: Renewable Energy in China, Knowledge@Wharton Over half IFC-financed power sector projects fall to renewable energy "Despite the difficult financing environment, FY09 proved to be the year of renewables," said Dana Younger of IFC's Infrastructure Department 4 First Asia-Pacific Renewable Energy Trust formed by Conergy Subsidiary and GE with US$250 Million target The Renewable Energy Trust Asia is an investment vehicle focused on the US$7 billion annual renewable energy markets of India, the ASEAN countries and South Korea Exploring alternative energy sources is not a luxury based on environmental concerns, but an absolute necessity to simply provide enough energy for China. One provision in the Renewable Energy Law of 2006 requires 15% of all energy consumed in China to be renewable by the year 2020

6. VC/PE new investment in sustainable energy by stage, $billion 5

7. Financing new build in sustainable energy by region,$ billion 6

8. Agenda 1 Trends in equity financing for power projects in Asia 2 Sources of capital and structuring strategies 3 Mitigating risks in equity financing 7

11. Agenda 1 Trends in equity financing for power projects in Asia 2 Sources of capital and structuring strategies 3 Mitigating risks in equity financing 9

13. Elaborating on other risk mitigants 11 Be minimalistic upfront and ramp up gradually Avoid straight equity stakes where conflicts of interest may arise or the sector has yielded poor returns. Quasi-equity investments allow for upside participation DEVELOPERS TECHNOLOGY SHIFT SAFETY INVESTMENT APPROACH PUBLIC SUPPORT Only work with capable and trust-worthy developers Convince the public with a compelling economic case Heavy emphasis on public relations Acquire credible capabilities in safety and operations; maintain good safety and operating records Conduct thorough due diligence on developers’ backgrounds Hedge against technology risk by double betting i.e. invest in two or more versions of technology simultaneously RISK MITIGANTS Improve safety culture through communication, education / training, positive reinforcement Adopt advanced operation process & systems; optimize business design for cost efficiency

14. Phat Nguyen Indochina Infrastructure Management Floor 10, Capital Place, 6 Thai Van Lung, District 1, HCMC, Vietnam [email_address] www.indochinacapital.com This presents the author’s view and does not necessarily reflect Indochina Capital’s