How to fund renewable investments? «Fond d Investissements de Proximité»: a way to funnel retail money to renewable investments 1
Definition of a FIP FIP «Proximity Investment Funds» are mutual funds belonging to the Private Equity category. Specifically created for France, they are designed for private clients and informed investors. Created by the Dutreil Law for the Economic Initiative on August 1 st, 2003 to help finance regional SME/SMI. A FIP is a savings instrument which promotes partnerships between local authorities and private investors (individual and institutional) in order to fund the development of companies located in a specific region. 2
Benefits of a FIP FIP offer a double tax advantage. Taxpayers having their tax residence in France who invest in FIP shares in year n can benefit from year n+1 onwards from a reduction in their income tax equal to 25% of the cash subscriptions (caped at 12 000 for a single person and 24 000 for a couple) The capital gains are also exempted from capital gains tax and are only subjected to social security contributions, provided that the FIP units are held for at least 5 years from the subscription date. 3
Constraints and specificities of a FIP A FIP must invest: at least 60% of its assets in non-listed innovative SME/SMI (less than 250 employees), from three neighboring regions in Europe and at least 10% of these companies must be less than five years old; the remainder (up to 40%) can be freely invested in financial instruments (mainly mutual funds of renowned management firms, that may include equities, bonds and monetary securities). A FIP can only take minority interests, up to 35% stake. 4
The French FIP Market Since 2003, more than 1.5 Billion have been raised through the FIPs. 40% of the funds granted to SME in 2010 stems from the FIP/FCPI Zoom on the 2008-2009 activity: year 2009 2008 # of FIP raised 55 46 Funds raised 427 M 562 M Estimated # of underwriters Average amount of underwriting 64 200 72 200 6 650 7 780 Source: Association Française des Investisseurs en Capital During the financial crisis the FIP have been a great incentive for French Private Equity which maintained at the 2 nd rank in Europe just behind the UK. The Dutreil Law for the FIP had fixed the end of the FIP regime Dec 31, 2010. Therefore the FIP as a source of funding to renewable will stop at that date. 5
EOLFI s activities in financing renewable
EOLFI and EOLFI AM (1) EOLFI Eolfi is a Paris based renewable energy developer specialized in wind and solar. Eolfi operates in European and US markets, providing long term clean energy solutions to communities, industry and investment partners. Subsidiary of VEOLIA ENVIRONNEMENT 7
EOLFI and EOLFI AM (2) EOLFI Asset Management (Eolfi AM) Eolfi AM is an integrated asset management company focused on wind and solar power. Eolfi AM manages or advises today a 1 billion portfolio of projects in operation and under construction. - 2 funds directly managed (FCPR) for an amount of 113 M - 7 funds advised (FIP) for an amount of 132 M - Invested in 398 MW, split in 25 wind and solar farms in construction or operation (in France and in Greece) - Investment pipeline in France, Greece and Poland 8
Current FIP s advised (1) EOLFI AM is an advisor to 7 FIP totaling 132m of equity subscribed by more than 15 000 investors. Those FIP can invest as much as 80% of their resources in renewable. Name FIP EN FIP EN II FIP EN MED Year of creation 2006 2007 2007 Year of investments closing 2009 2010 2010 Regions Champagne- Ardenne, Lorraine, Picardie Bourgogne, Centre, Champagne-Ardenne, Pays de la Loire Languedoc- Roussillon, Midi- Pyrénées, Provence- Alpes-Côte-d'Azur, Rhône-Alpes Total amount raised to date 34,4M 27,8M 27,6M Outstanding amount to be invested - - - Name FIP ES I FIP ES II FIP EN III FIP EN IV Year of creation 2009 2009 2008 2008 Year of investments closing 2012 2012 2011 2011 Regions Languedoc- Roussillon, Midi- Pyrénées, Provence-Alpes- Côte-d'Azur, Rhône-Alpes Languedoc-Roussillon, Midi-Pyrénées, Provence-Alpes-Côted'Azur, Rhône-Alpes Peloponnese, West Greece, Central Greece, Thessalie Peloponnese, West Greece, Central Greece, Thessalie Total amount raised to date 19,9M 5,1M 6,6M 10,8M Outstanding amount to be invested 10,7M 2,8M 1,4M 2,3M 9
Current FIP s advised (2) Zoom on the Greek FIP: The FIP EN III and EN IV, dedicated to investing in Greece have invested in 4 wind farm projects in August 2010 : KASTRI EVIAS, in central Greece: 1.8M through convertible bonds. MELTEMI KASTRI, in Thessalie: 1.8M through convertible bonds. VERDE ENERGY, in central Greece: 1.7M through capital shares and convertible bonds. VIENTO, in Thessalie: 1.7M through capital shares and convertible bonds. 10
Copyright EOLFI Asset Management Strictly confidential 2009/07/23 Eolfi is the wind and solar subsidiary of Veolia Environnement Eolfi focuses on all aspects of solar and wind power production, from acquisition and financing, to development, construction and electricity generation. We are a fully integrated operator of solar and wind parks with projects in France, Greece, Poland and the US. Eolfi SA 25, Place de la Madeleine 75008 Paris Tél : +33 1 40 07 95 00 Fax : +33 1 40 07 95 06 www.eolfi.com contact@eolfi.com EOLFI Asset Management 25, place de la Madeleine - 75008 Paris (France) Tel: +33 1 40 07 97 34 / fax: +33 1 40 07 97 36 E-mail: contact@eolfiam.com