Developing a Portfolio of Hydro Projects in

Panama and Costa Rica

PLATTS

June 8, 2012

Identifying the Opportunity

PPH was created in 2007 based on:

• Need for new generation capacity.

• Availability of hydro resources.

• Long term Power Purchase Agreement contracts for firm capacity.

• Attractive economy for new projects.

• Belief in the future of renewable energy.

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Main Participants in Panama’s Electricity Sector

Assets: US$40,000,000,000

Panama: 705 MW

Assets: US$240,000,000,000

Panama: 300 MW

Assets: US$264,000,000,000

Panama: 367 MW

Assets: US$64,000,000,000

Panama: EDEMET & EDECHI

Assets: US$14,000,000,000

Panama: ENSA

Generators

Distributors

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Our Vision for Panama Power

• Portfolio of mini-hydro projects with similar characteristics.

• Accelerated development and construction schedules.

• Advantage of economies of scale.

• Strict adherence to highest standards of environmental resource

management.

• Active participation and support of local communities.

• Flexible capital structure.

• “Open-Book” investor communications.

4

Securing the Projects

Panama Power Holdings Inc.

Pedregalito 1 – 20 MW

Río Chico, Chiriquí, Panamá

Pedregalito 2 – 12.5 MW

Río Chico, Chiriquí, Panamá

Cochea – 15.7 MW

Río Cochea, Chiriquí, Panamá

El Alto – 67 MW

Río Chiriquí Viejo, Chiriquí, Panamá

La Esperanza – 6 MW

Río La Esperanza, Alajuela, Costa Rica

Caldera – 5MW

Río Caldera, Chiriquí, Panamá

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Equity Funding

December 2006

Initial Road Show for US$50 million

September 2007

Raised Initial US$83 million (US$10 per share)

March 2010

Raised Additional US$60 million (US$10 per share)

November 2011

Listed in the Panamanian Stock Exchange

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Stock Price - PPHO

Source: Panamanian Stock Exchange

PPAs –Contracted Energy (excl. Costa Rica)

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*Subject to award of latest licitation

2013 - Excl. El Alto

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Overview of Spot Market

• Demand growth with GDP

• Variable cost of US$145 for most efficient thermal units – May 2012

• Future prices driven by:

New capacity

Demand growth

Fossil fuel prices

Transmission access

Monthly Averages - Last 12 Months (US$/MWh)

Annual Averages (US$/MWh)

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Financing Approach

During Construction:

• Local banks

• Construction loans

• Public bonds as takeout to construction loans

Commercial Operations:

• Refinancing with bullet structure

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Current Debt Profile and Lead Banks

Construction Contracts

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Civil Works & Electromechanical:

• EPC contracts

• Financial Support: SBLCs

• Contractor: Cobra (ACS Group, Spain)

Tunnel:

• EPC contract

• Financial Support: SBLCs

• Contractor: SELI (Italy)

Operations

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La Esperanza 6MW

Cochea 15.7MW

El Alto 67MW

P1 & P2 32.5MW

Caldera 5MW

La Esperanza – Costa Rica

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• Installed capacity 5.8MW

• In operations since 2000

• PPA with Instituto Costarricense de

Electricidad (“ICE”).

- 5.0MW capacity contracted at

US$0.0601

- 15 year tenor, expiring February

of 2015

Pedregalito 1

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• In operations since April 2011

• Installed capacity:

– 20MW

• Generation:

– 93.5GWh–year

• Equipment:

– Two turbogenerators 10MW capacity each

• Water intake works:

– Run of the river dam with radial gates

• Design flow:

– 40m3/s

• Complimentary works:

– 0.25MW mini-hydro at plant

Pedregalito 2

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• In operations since October 2011

• Installed capacity:

– 12.5MW

• Generation:

– 55GWh–year

• Equipment:

– Two turbogenerators 6.5MW capacity each

• Water intake works:

– Water discharge from Pedregalito 1

• Design flow:

– 40m3/s

Cochea

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• Installed capacity:

– 15.7MW

• Generation:

– 58GWh–year

• Equipment:

– Two turbogenerators 7.9MW capacity each

• Water intake works:

– Run of the river with gravity dam

• Design flow:

– 14m3/s

• Operations:

– Mid 2012

El Alto

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• Installed capacity:

– 67MW

• Generation:

– 270GWh–year

• Equipment:

– 3 turbogenerators 22.3MW capacity each

• Water intake:

– 50m height dam with a reservoir of 1.5M m3

• Design flow:

– 60m3/s

• Operations:

– Mid 2013

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Lessons Learned

• Think Big

• Start with Equity

• Flexible Relationship Based Financing

• Don´t Stress the PPAs

• Pray for Sunshine During Construction and Rain During Operations