INVESTMENT MEMORANDUM - BVP · BvP Investments Limited t/a Business venture Partners (“BvP”) proposes to raise finance for the construction and operation of medium size (250 kW)

WIND FINANCE COMPANY LIMITEDINVESTMENT MEMORANDUM

www.bvp.ie

WIND FINANCECOMPANY LIMITED

BVP Investments proposes to raise finance for the construction and operation of medium size (250 kW) wind turbines in Northern Ireland.

PAGE 1TABLE OF CONTENTS

ExECuTIvE SuMMArY 2

Financial instrument 2

Background 2

Investment Overview and Investment Manager 2

Project Selection Criteria 3

Why is this an attractive investment opportunity? 3

IMPOrTANT NOTICE 4

MANAGErS AND ADvISErS 5

ABOuT BvP 6

LOAN NOTE INSTruMENT 7

Term of Investment 7

Interest rate and repayments 7

Protections 8

use of Funds 8

Transferability and Early realisation of Investments 8

MEDIuM SIzED WIND TurBINES IN NOrThErN IrELAND 9

Projects 9

Project Developers 10

Wind Survey reports 11

The Wind Turbines 11

Construction 11

Ongoing Operation and Maintenance 12

revenue Model 13

Project Setup and Operation Costs 13

rISK FACTOrS 14

DATA PrOTECTION 16

PrOCEDurES FOr APPLICATION 17

APPENDIX I APPLICATION FOrM 18

APPENDIX II ILLuSTrATIvE PrOJECTS 19

APPENDIX III INvESTOr LOAN NOTE (separate attachment) -

DISCLAIMEr 24


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ExECuTIvE SUMMARY

BvP Investments Limited t/a Business venture Partners (“BvP”) proposes to raise finance for the construction and operation of medium size (250 kW) wind turbines in Northern Ireland.

FInancIal Instrument The investment will be completed in the form of a Loan Note with 10% annual interest on reducing balance basis. The plan is to raise up to €2 million and there is no minimum investment amount per investor. BvP reserves the right to accept more than this amount also, and to accept Euro or Sterling denominated amounts from investors.

BackgroundCurrently Northern Ireland offers one of the world’s best government backed incentives for the operation of medium sized wind turbines of up to 250 kW in maximum generation capacity. The government incentivises the operation of this size of turbine by granting four renewable energy obligation certificates (rOCs) to a project for every megawatt hour generated. Combined with the electricity generated, this results in a strong revenue stream from day 1 of project operation. The electricity and rOCs will be sold to a large Northern Ireland utility, Power NI, for the life time of the loan note which secures the revenue stream of the project.

InVestment oVerVIew and InVestment managerInvestors apply for loan notes to be issued by BvP Wind Finance Company Limited, a private limited company registered in the republic of Ireland (“Finance Company”) pursuant to the terms of a loan note instrument. BvP will be the investment manager and owner of the Finance Company.

BvP is an investment fund manager based in Dublin specialising in clean technology (‘Cleantech’) companies and renewable Energy Projects.

BvP has raised €7.4 million in six BES/EII funds from 2007 to 2012. BvP is approved by the Central Bank of Ireland under Section 10 of the Investment Intermediaries Act 1995.

under Directive 2011/61/EC of the European Parliament and of the Council of 8 June 2011 under the Alternative Investment Fund Managers Directive (the “AIFMD”) which will be transposed into Irish law on 22nd July 2013, BvP will be making an application for registration with the Central Bank of Ireland as an alternative investment fund manager (the “AIFM”).

BvP has chosen two partners who are wind project developers. BvP was introduced to the developers, WindConnect Limited and Galetech NI, through its long standing relationship with Optinergy Limited. Optinergy is a company in which the Simple Green BES/EII funds have invested and Optinergy will both supply and maintain the turbines.

The developers’ principals are experienced Wind energy professionals who are former ESB International engineers. The opportunity described in this document is to raise the finance required to fund the medium scale wind turbines in Northern Ireland which have been progressed to date by these developers to the point at which they are ready for construction. Their interest is that they will own these assets for the long term after the loan notes have been repaid.

BvP Wind Finance Company Limited will invest the funds by way of a loan note in three to four similar medium sized wind projects based in Northern Ireland which meet the criteria outlined below. Each project will be held in a separate special purpose vehicle.

The Simple Green BES/EII Funds will not be investing in BvP Wind Finance Company Limited or the Special Purpose vehicles (SPv’s), through which the developers will construct and operate the Wind Turbines.

BvP will manage and monitor the investment in each project from construction through to full repayment of the investors’ money. BvP’s strategy is to launch this initial fund with a view to launching further similar funds in the future. BvP has a strong pipeline of such investment projects in the uK and Northern Ireland. BvP will provide an annual report to the investors on the financial status of the Finance Company and the status of each project in which the Company has invested.

BvP through its partnership with the university of ulster have developed a financial model to assess wind farm projects.

ExECuTIvE SUMMARY continued

Project selectIon crIterIaBvP will only invest in projects which broadly meet the following criteria. Independent verification will be provided by Jennings O’Donovan & Partners Consulting Engineers.

• Turbines to be installed are fully remanufactured mainstream brand wind turbines (e.g. Siemens, vestas)

• Full Planning Permission has been granted

• Strong wind speed on each site (6.3 m/s +)

• viable Grid Connection Costs

• Site Transport Access routes validated

• Independently verified Wind Monitoring completed for minimum 6 months on each project

• Demonstrable capacity to repay

Projects Capex approximately made up of:• Wind Turbine (c. 45% of Capex)

• Grid Connection Cost (c. 25% of Capex)

• Civil and Electrical Works (c. 20% of Capex)

• Development Costs & Other (c. 10% of Capex)

Operating project cashflows (pre-tax) are typically:• revenue (100% - c. £204,000)

• rent (c. 7.5% of revenue, £15,300)

• Operations and Maintenance (c. 12% of revenue, £24,480)

• Insurance (c. 1.5% of revenue, £3,060)

• Other Expenses (c. 3.5% of revenue, £7,140)

Why is this an attractive investment opportunity?We believe this is one of the first income generating fully secured products in the wind sector.

1 These projects are un-leveraged. There is no senior debt or other claims on the projects and/or assets.

2 The BvP Wind Bond will make full capital and interest (10%) repayments to investors every 6 months. These repayments will be underpinned by strong revenue streams from each project.

3 In the unlikely event of a major default the Finance Company holds security over the assets of each project and will have the ability to enforce its security to sell the assets in order to repay the investors loan note.

4 Each of the proposed projects will be developed and managed by experienced wind project developers and project managers.

5 The Finance Company will be managed by an experienced investment manager, BvP.

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PAGE 4

IMPORTANT NOTICE

This Investor Memorandum has not been approved by the Central Bank of Ireland. This scheme has not been authorised and is not supervised by the Central Bank of Ireland. This Investor Memorandum does not and shall not constitute an invitation to the public in Ireland to purchase interests in the scheme and the scheme does not provide facilities for open participation by the public in Ireland to invest in the scheme. The distribution of this Investor Memorandum and the offer of interests in the scheme is restricted to the person to whom it is addressed and should be treated as private and confidential. No persons other than the person to whom this Investor Memorandum is addressed may treat it as constituting an invitation to him to subscribe for interests in the scheme. If an addressee of this Investor Memorandum is not interested in subscribing for interests in the scheme, such addressee should immediately return this Investor Memorandum. Interests in the scheme may not be offered or sold by any person in a manner that constitutes an offer for sale to the public in Ireland for the purposes of Section 9 of the unit Trusts Act 1990 of Ireland or otherwise.

Each prospective investor should consult their own accountant, lawyer or other professional adviser in connection with the proposals set out herein to determine the consequences of becoming an investor in the scheme having regard to the risks involved and their own personal financial circumstances and tax position.

Prospective investors should be aware that the value of investments may fall as well as rise; simulated performance may not be a reliable guide to future performance and that past performance is not a guarantee of future results. The single or combined occurrence of any of the “risk Factors” set out in this Information Memorandum may result in the investor losing some or all of their investment. The financial projections included in this document are for illustrative purposes only and your attention is specifically drawn to the “risk Factors” section set out in the Information Memorandum.

BvP is not advising you or recommending this investment. In making your investment decision, you should consult if necessary, your stockbroker, bank manager, accountant, solicitor or other independent professional adviser.

If an Investor decides to proceed with any investment they will make this decision subject solely to, and in accordance with the provisions of the legal documentation including but not limited to, the Information Memorandum.

Nothing in this Information Memorandum is, or should be relied upon as, a promise or representation as to the future. Any projections contained herein are for illustrative purposes only and are intended to show a possible outcome based on stated assumptions. There can be no assurances that the stated assumptions will prove correct or that the projections will be achieved or that unforeseen developments or events will not occur. In particular there can be no assurances that the scheme will achieve its investment objective or that investors will receive any return on, or the return of their invested capital.

This document is being made available for information purposes only to those who have expressed an interest in investing and shall not form the basis of any contract between the Finance Company and any prospective investor. This information memorandum should not be distributed, published or reproduced, in whole or in part, nor should its contents be disclosed by recipients to any other person other than their professional advisers.

This Information Memorandum does not and shall not be deemed to be a prospectus within the meaning of the Irish Companies Acts or for the purposes of the European Communities (Prospectus) regulations 2005 (as amended). No offer for, or invitation to subscribe for shares/interests in the scheme to any person other than the addressee is being made under or by virtue or in connection with this document.

Applications must reach BvP no later than 30th June 2013 or such later date as BvP in its absolute discretion shall determine. Applications will be accepted in the order of receipt but the right is reserved to close the application list at any time before 30th June 2013. BvP will not invest any subscription monies in any Investee Companies until subscriptions have closed.

This Information Memorandum does not constitute, and may not be used for the purposes of, an offer of securities or an invitation to apply to participate in the Finance Company by any person in any jurisdiction in which such offer or invitation is not authorised or in which the person endeavouring to make such offer or invitation is not qualified to do so or to any person to whom it is unlawful to make such an offer or invitation. It is the responsibility of prospective investors to satisfy themselves as to full compliance with the relevant laws and regulations of any territory in connection with any application to participate in BvP Wind Finance Company Limited including obtaining any requisite governmental or other consent and adhering to any other formality prescribed in such territory.

This information memorandum supersedes and replaces in its entirety any memorandum previously circulated.

While care and consideration has been taken in the preparation of this Investors Memorandum, no warranties or representations, express or implied, are given by BVP, their directors, agents or advisors, shareholders or any other party in respect of the information contained in this document and no responsibility or liability is accepted by any of them with respect to the accurateness or completeness of the information or opinions set forth within this Investor Memorandum or for failure of the investments to perform to the advantage of the prospective investors.

PAGE 5MANAGERS AND ADvISErS

Managers and advisers to the Finance Company

Investment Manager BVP Investments Limited unit 23, The Cubes 2 Beacon South Quarter Sandyford, Dublin 18

Directors of the Manager Elliott Griffin Conor Toolan David Gavagan* Stephen Cloonan*

Mark richardson, Company Secretary

Solicitors - Republic of Ireland LK Shields Solicitors 40 upper Mount Street, Dublin 2

Solicitors - Northern Ireland Pinsent Masons Belfast LLP Arnott house, 12-16 Bridge Street Belfast, BT1 1LS

Auditors BBT Chartered Accountants and Registered Auditors The Gables, Foxrock, Dublin 18

Bankers Ulster Bank College Green, Dublin 2

Consulting Engineers Jennings O’Donovan & Partners Consulting Engineers Finisklin Business Park, Sligo

Wind Surveyor Natural Power First Floor, Suite 6 The Mall, Beacon Court Sandyford, Dublin 18

* Non-executive


PAGE 6

ABOuT BVP

The investment manager BvP is authorised under the Investment Intermediaries Act, 1995 and is regulated by the Central Bank of Ireland. BvP will be making an application to become registered as an AIFM under the AIFMD. As part of the registration process as an AIFM under the AIFMD, BvP will be required to comply with reporting and disclosure requirements to the Central Bank of Ireland.

BvP has raised 6 BES/EII funds to date and has €7.4 million of assets under management. All six Simple Green Funds invested in companies involved in technology with a mixture of revenue generating companies and r&D companies. BvP has developed industry leading experience in reviewing and selecting high quality investment opportunities. BvP is also a well-established corporate finance adviser since 2004 to small and medium sized businesses.

BvP has completed 30 investments to date and reviews over 60 opportunities each year. The BvP Investments team are:

Elliott GriffinElliott Griffin, is the founder and managing director of BvP. he has considerable experience in raising and managing BES/EII investments. Elliott is passionate about sustainability and finding the next leading edge cleantech venture. A commerce graduate of uCD and trained as a Chartered Accountant with PwC, Elliott also worked with hibernia Capital Partners.

Conor ToolanConor is an MBA-qualified engineer with a background which includes Shell, PwC and the Sustainable Energy Authority in Ireland (SEAI), where he was a senior renewable energy and energy efficiency advisor; he has fifteen years energy experience. Conor is a Director of BvP.

David GavaganDavid Gavagan, with over 30 years’ venture and development capital experience was a co-founder and Managing Director of hibernia Capital Partners Limited. David was formerly a director of DCC plc and the DCC BES Fund. he is a graduate of uCD and a Chartered Accountant. David is a non-executive director of BvP and a number of other private companies.

Stephen CloonanStephen is a successful entrepreneur and has been the Chairman of a number of technology companies in Ireland and the uS. Stephen is an experienced investor and company executive. Stephen is a non-executive director of BvP and a number of other private companies.

Mark RichardsonMark richardson holds a Bachelor of Commerce from uCD. he is a Chartered Accountant and Associate of the Irish Taxation Institute having trained in Deloitte & Touche. Through a post graduate course in sustainable finance, he has an in depth knowledge of the cleantech sector in Ireland and abroad. Mark is the Company Secretary and is responsible for Investor relations and financial reporting within BvP.

Through Intertrade Ireland’s Fusion Programme, Business venture Partners (BvP) has partnered with the university of ulster to develop a financial model to assess wind farm projects.

DAVID GAVAGAN STEPHEN CLOONANELLIOTT GRIFFIN CONOR TOOLAN MARK RICHARDSON

PAGE 7LOAN NOTE INSTRUMENT

The key provisions of the loan note instrument are:

term oF InVestmentThe term of the loan note is eight years from the date of adoption of the loan note instrument by the Finance Company.

Interest rate and rePaymentsAll interest and capital repayments will be paid in accordance with terms and conditions of the Loan Note Instrument and the repayment schedule included therein. Interest will be payable at a rate of 10% per annum and will be based on the balance outstanding at the preceding 6 monthly period. repayments will be made every 6 months. however, in order for the project to build cash reserves, the first loan repayment will be made in on the day falling 12 months from issue of the loan notes. The second payment will be made on the date falling 18 months from issue of the loan notes and a double payment will be made on the date falling 24 months from issue of the loan notes to bring payments up to date. All other payments will be made in 6 monthly intervals thereafter.

Illustrative example of a €50,000 investment

year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8

Opening balance --- 50,456 41,386 36,056 30,179 23,700 16,557 8,682

Advance 50,000 --- --- --- --- --- --- ---

Interest 5,125 4,938 4,009 3,462 2,860 2,196 1,464 656

Total Repayments (4,669) (14,008) (9,339) (9,339) (9,339) (9,339) (9,339) (9,339)

Closing Balance 50,456 41,386 36,056 30,179 23,700 16,557 8,682 0

Note: Repayment due at month 6 is rolled up and repaid at month 24.

Illustrative example of expected repayment and investor returns

amount InVested (€) BIannual rePayment(€) total rePayments (€)

25,000.00 2,334.68 37,354.93

50,000.00 4,669.37 74,709.86

75,000.00 6,537.11 104,593.81

100,000.00 9,338.73 149,419.72

125,000.00 11,673.42 186,774.65

150,000.00 14,008.10 224,129.58

175,000.00 16,342.78 261,484.51

200,000.00 18,667.47 298,839.45


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LOAN NOTE INSTRUMENT continued

ProtectIonsIn situation of persistent default by a project Special Purpose vehicle the Finance Company can enforce its security over the assets of the project Special Purpose vehicle and sell the assets.

In situation of persistent default by the Finance Company or should the Finance Company be deemed insolvent or cease to carry on its business, investors by 75% majority can liquidate the Finance Company and gain recourse to its assets.

BvP will be the management agent for the Finance Company and will be responsible for selection of assets to invest in on behalf of the Finance Company. BvP will be indemnified for any costs in enforcement and management of the assets from either the revenue streams from the assets or the sale proceeds from selling the assets.

The terms and conditions of the Loan Notes are as provided in the Loan Note Instrument and investors may inspect and/or request a copy of the Loan Note Instrument from BvP. The above description is a brief description of the key terms of the Loan Notes only and if there is any conflict between this Investor Memorandum and the Loan Note Instrument, the terms of the Loan Note Instrument shall prevail.

use oF FundsThe Finance Company will loan the funds to each project Special Purpose vehicle which in turn will purchase refurbished turbines with a generation capacity of 250 kW each. Funds will be drawn down from Finance Company as the projects are approved by BvP. The funds will only be drawn down on completion of a due diligence process and independent verification by Jennings O’Donovan & Partners, Consulting Engineers that the project meets the selection criteria.

transFeraBIlIty and early realIsatIon oF InVestmentsIn exceptional circumstances, but without obligation, a request by an Investor for the disposal of their share in the Loan Note will be considered by BvP provided a willing purchaser can be found for the Investor’s share in the Loan Note. This may result in the loss of all or part of the interest and capital payments due to the investor at the time of disposal.

BvP gives no undertaking to find a purchaser.

In the event of the death of an Investor, any un-invested sums held in the Finance Company at that time will, subject to compliance with usual legal formalities, be placed at the disposal of the Investor’s personal representatives. however, in other circumstances, it may not be possible to realise that Investor’s investment prior to the expiration of the Loan Note.

PAGE 9MEDIuM SIzED WIND TURBINES IN NOrThErN IrELAND

Projects

BvP will evaluate and select projects proposed for development by the wind project developers, WindConnect Limited and Galetech NI. The broad criteria for project acceptance will include:

• Turbines to be installed are fully remanufactured mainstream brand wind turbines (e.g. Siemens, vestas)

• Full Planning Permission has been granted

• Good wind speed sites (6.3m/s +)

• viable Grid Connection Costs

• Site Transport Access routes validated

• Independently verified Wind Monitoring completed for minimum 6 months on each project

• Demonstrable capacity to repay

As part of this process, confirmation that the projects meet the acceptance criteria will be independently verified by Jennings O’Donovan & Partners Consulting Engineers. A typical project will meet the following criteria and a short-list of potential projects is attached at appendix 2.

• Average wind speed in excess of 6.3m/s

• Long Land Lease Term – 20 years +

• Off-take agreements in place – Minimum of eight year contract.

Typical project timelines are as follows:

• Month 1 to Month 3 – Drawdown of Finance, Grid Connection Preparation and Construction.

• Month 4 – Project Operational.

jennings o’donovan & Partners consulting engineers is an international firm of consulting engineers with particular expertise in the renewable energy industry.

The Company has over 60 years experience in Civil and Environmental Consulting Engineering in Ireland and Overseas. This includes experience from project feasibility, planning, design, procurement, construction/implementation through to successful handover. To date, the company has been involved in the development of over 1,100 MW of power in Ireland and Northern Ireland.

PROJECT OWNERS/DEVELOPERS

WindConnect Galetech NI

PROJECT EVALUATION AND SELECTIONBVP Wind Finance Company

PROJECT MANAGER DURING CONSTRUCTIONIWCM

ONGOING OPERATIONS AND MAINTENENCEOptinergy


PAGE 10

Project deVeloPersThe projects will be developed by Galetech NI and WindConnect Limited and selection of the projects is subject to final approval by BvP.

galetech nI is a wind energy project development partnership which holds a controlling interest in a portfolio of 5 single turbine 250 kW projects in Northern Ireland. The principals in Galetech NI include the principals in WindConnect and Optinergy.

Galetech NI develops its own wind projects, from green field stage of site identification, right through the development process to long term operation and sale of electricity from the project. To date the company is involved in the development of a significant number of wind projects in Ireland.

Galetech NI is a specialist wind farm development support services company. These services include project finding and analysis, comprehensive project technical design, environmental impact assessments, wind data collection, analysis and energy production reports, technical reports and planning management and other specialist services.

windconnect limited is a wind energy project development company incorporated in Northern Ireland.

The company is wholly owned by Donogh O’Brien, Paul Carney and herman Busschots. herman Busschots is the chairperson of the company. In addition to the three main principals, WindConnect Limited has two other shareholder directors who have provided funding to date for the venture. The company is developing twenty single turbine 250 kW projects across Northern Ireland.

Herman BusschotsA Qualified Electro-mechanical engineer, herman has spent 35 years in the energy sector, and the last 10 years specifically in power production with focus on wind. Prior to joining WindConnect Limited, herman headed General Electric’s Energy power generation “global development and strategic Initiatives” unit in Europe. In this role he was involved in large scale wind projects in respect of acquisition, partnering, development and divesture.

Donogh O’BrienDonogh is one of the founders of WindConnect Limited. Previously, Donogh worked with ESB International for ten years, seven of which in the wind project development and construction area and was responsible for the engineering and project management of projects ranging from €3M to €45M in value. Donogh has detailed technology and engineering knowledge of the factors which make a successful wind project.

Donogh sits on the grid subcommittee of the Northern Ireland renewables Industry Group (NIrIG) committee, which is a joint collaboration of IWEA and renewable uK to represent the renewable energy industry in NI. Donogh also sits on the Irish Wind Energy Association (IWEA) auto production subcommittee, which represents the sub 250 kW market in NI.

Paul CarneyA qualified mechanical engineer, Paul has spent the last twelve years working in the energy sector, four of which have been in the wind industry. Paul has extensive experience planning and executing strategic thermal and wind projects for ESB International Investments and hibernian Wind Power both overseas and in Ireland. Before joining WindConnect, Paul was development manager of 50 MW of ‘Gate 1’, 96 MW of ‘Gate 2’ wind farms in republic of Ireland, 18 MW in Northern Ireland, 66 MW in Great Britain.

Paul sits on the Northern Ireland renewables Industry Group (NIrIG) committee, which is a joint collaboration of IWEA and renewable uK to represent the renewable energy industry in NI.

MEDIuM SIzED WIND TURBINES IN NOrThErN IrELAND continued

PAGE 11MEDIuM SIzED WIND TURBINES IN NOrThErN IrELAND continued

wInd surVey rePortsThe wind production surveys and reports will be completed by an independent assessor. The reports will be completed by a well known independent experienced assessor such as Natural Power. The reports independently verify the average wind production capability of a site. The reports are then used to assess the financial capability of a project. When assessing a project, the wind production figure at P90 is used. This means, based on the wind production survey, 90 out of 100 times the project will produce better results. This a very conservative figure to use and indicates the strength of the projects that will be selected.

natural Power has over 15 years of experience in wind engineering consultancy and an international reputation for technical excellence and innovation. The professional firm provides a diverse client base with access to first-class technical expertise, consultancy services and project-focused advice.

the wInd turBInes

The wind turbines will be refurbished mainstream branded 250 kW rated wind turbines (e.g. vestas, Siemens). They will typically be purchased in Germany from reputable sources by the developers. The turbines will be fully refurbished by Optinergy Limited. refurbished turbines are the preferred choice for this scale of project due to the following reasons:

• No availability of “main brand” turbines at this rating (250 kW)

• Large supply of parts/spares for refurbished turbines of “main brand” turbines available

• The refurbished turbines are usually rated higher than 250 kW, say 500 kW, and produce more electricity at lower wind speeds. They are limited to producing 250 kW to qualify for the 4 rOCs. This higher rated turbine is important as it makes best use of the available wind resources as most of the sites are on farmland (mid height i.e. not in the mountains and not at sea level)

• Of the 23 medium scale wind turbines already installed in Northern Ireland, 20 are refurbished turbines.

constructIon

I.W.C.M. Limited (IWCM) will act as project managers from financial drawdown to full project operation. IWCM is the project consulting firm of Donogh O’Brien and Paul Carney. Financial drawdown is the date on which funds are issued to the project SPv and can only occur when all due diligence has been completed and verified. Local construction companies will be used to complete the basic civil engineering works required while Optinergy will complete the installation and commissioning of the turbines.

IWCM will be paid a fixed fee to oversee the project management of the construction and commissioning process.


PAGE 12

MEDIuM SIzED WIND TURBINES IN NOrThErN IrELAND continued

ongoIng oPeratIon and maIntenanceThe ongoing operation and maintenance will also be contracted to Optinergy Limited (“Optinergy”). Optinergy will provide an operational guarantee of 90% availability. This means that Optinergy will guarantee that the wind turbine will be available to produce electricity for 90% of the year.

In order to meet this guarantee, the following will be put in place by Optinergy:

• refurbishments with full cover by warranties from Optinergy and the various parts suppliers which will protect project revenues in the event of breakdown/non-operation caused by wear and tear.

• Optinergy can offer this warranty by- Keeping a large stock of spares onsite- Putting aside a sinking fund to replenish purchase parts/spares as needed.

• Turbines fully insured for the life of the loan note. Business interruption insurance via a bordereau agreement will be provided by O’Leary Insurances Limited to Optinergy Limited. A bordereau agreement is an insurance policy whereby the insured party, Optinergy, can add additional turbines to the policy without assessment from the broker/underwriter. These insurances will protect the project revenues and full rebuild cost for 12 months for any breakdown/non-operation caused by accidental damage. Optinergy is one of the only companies in Ireland who have this type of cover.

optinergy is a wind turbines operation and maintenance company in Ireland. The Company currently has over 40 turbines under management throughout Ireland. Their technical expertise spans a large range of turbine types and they have experience in all aspects of the wind farm industry since the 1990s.

Its ability to meet their operation availability guarantees is backed up by a robust stock of spare parts for the majority of turbines under their care.

Optinergy will be paid a fixed annual fee under the operations and maintenance contract signed with the project. In addition, they will be paid a fixed fee for the installation and commissioning of the wind turbine. These costs will be independently verified by during the due diligence process prior to financial close.

The key principals of Optinergy are:

Darren Sherry Darren Sherry has been involved in the renewable energy industry for over 15 years; and has been an

active member of IWEA (Irish Wind Energy Association) since 1997, when he initially got involved in the renewables industry in Ireland.

In 2000 Darren Sherry co-founded Galetech Energy Limited; a progressive wind energy development business, which has constructed over 50 MW of its own projects, with a further 380 MW of projects in various stages of permitting and development.

Since 2000, the Galetech group of companies have completed Joint ventures with various multinationals including Enron Wind, General Electric, hibernian Wind Power, ESBI, Airtricity – Mr. Sherry was lead negotiator on all deals, and project manager on all projects once merged.

Aiden Watters Aiden is Optinergy’s commercial manager with extensive project management and change management

experience. With formal MBA qualifications, Aiden leads the strategic growth of the company.

Ian Durnin Ian is a senior operations executive with extensive engineering, business and program management

experiences. he worked for Airtricity with overall responsibility for operations including maintenance, safety and network compliance. Ian acts as Technical Director in Optinergy.

the o’leary Insurance group operates from over nine locations and employ over 200 people. It is one of the largest Insurance Brokers in Ireland.

It specialises in all areas of general insurance. One of the principals, Rossa Williams personally specialises in the providing of advice and costs to both Financial Institutions and Developers in the placement of renewable Energy Projects across the Globe.

PAGE 13MEDIuM SIzED WIND TURBINES IN NOrThErN IrELAND continued

reVenue modelOnce the projects are operational, the projects will have the ability to generate revenue subject to there being adequate wind resources to operate the turbine. There are two main revenue streams from the projects which are electricity and sale of renewable Obligation Certificates which account for 23% and 77% of revenue respectively (based on current prices).

sale of the electricityEach project will enter into a power purchase agreement (PPA) with Power NI for at least the length of the loan note. This guarantees that all electricity generated will be purchased by Power NI at an agreed price.

Power NI, part of the viridian Group, is the biggest electricity retailer in Northern Ireland, supplying over 650,000 homes and over 35,000 farms and businesses.

sale of the renewable obligation certificates (rocs)The uK has set a long term target of reducing its greenhouse gas emission by 80% from 1990 levels by 2050. Currently only 11% of total uK electricity needs comes from renewable sources, while the target has been increased to 30% by 2020 under an Eu directive which the uK has signed up to. The uK Government introduced the renewables Obligation (rO) in 2002 to provide incentives for the deployment of renewable electricity in the uK.

The rOCs are granted for every megawatt hour of renewable energy generated across the uK and Northern Ireland. The medium scale (250 kW) wind projects that BvP Wind Finance Company Limited will be financing will be entitled to four rOCs for every megawatt hour generated. Each project will enter into a contract, at financial close, to sell the rOCs generated for the life of the loan note at the buyout price set by Ofgem. The buyout price, as it is known, is the fixed element of the rOC price and is only adjusted by indexation annually. The buyout price of a rOC accounts for 81% of projected revenues from rOCs.

There is also a recycled price, as it is known, which is the variable element of the rOCs revenue. This revenue is distributed to the supplier of rOCs annually by Ofgem. The price of this recycled/variable portion is based on the number of rOCs generated in a year versus the total demand for rOCs in a year. Based on current projections, the recycled portion accounts for 19% of the projected revenues generated from rOCs.

The uK Government has recently extended the renewable Obligation program to 2017. In addition they have guaranteed a market to sell rOCs up to and including 2033. While legislative changes are possible the above scheme extension re-confirms the uK government’s commitment to renewable Energy and the renewable Obligation scheme.

Project setuP and oPeratIng costsOn commencement of the projects set up costs of 2% and a fund raising fee of 3% will be payable to BvP by the SPv. These are paid from each project directly. In addition, BvP will be entitled to a 1% annual management fee. This will be based on the balance of loan outstanding at the end of each preceding 6 month period. This is payable from revenues generated by the projects.


PAGE 14

The following list of risks is not comprehensive, but is intended to give an outline of the risks which intending Participants need to consider; however, it does outline the issues that, in the opinion of BvP, comprise the principal risks associated with such an investment.

Independent advice should be sought and satisfaction should be obtained as to the suitability of investment into the Company prior to proceeding with same.

loan note repayments cannot be made At the time of investment, projections are prepared by the directors of the SPv. Through negligence or mismanagement, these revenues may not be generated leading to a loan default.

roc sovereign riskAlthough the uK government has only recently renewed the rOC scheme it could still cancel the entire renewable Obligation scheme. This could happen as a result of significant changes in Climate Change and Energy policies either in the uK or internationally. This would affect the projects ability to make loan repayments as there would be no rOCs generated by the projects.

roc recycled Price riskThe recycled or variable element of the price of a rOC is determined annually by market forces. There is a risk that should the demand for rOCs decrease and/or the supply of rOCs increase, then the recycled/variable portion of the price will decrease. The recycled or variable element of the rOC price accounts for 14% of total revenues based on current prices. This could reduce the projects’ ability to service the loan note.

non-performing assetsIf one or more of the turbines is not producing revenues, this will adversely affect the achievement of the loan note repayments.

operational risk There will be a fixed price 8 year Operations and Maintenance (O&M) contract guaranteeing a minimum 90% level of availability. Should Optinergy be unable to meet their contractual obligations, the SPv would be forced to tender for another O&M provider which could lead to less favourable commercial terms for the SPvs and reduce their ability to services the loan to The Finance Company.

liquidity While there is an established market for this type of project overall, there is no secondary liquid market for Investor Loan notes of this nature. It will be at least 8 years before the loan note is fully repaid.

construction delaysThe intended build period is only 3-4 months. Delays can be caused by weather or unforeseen site specific issues. A delay in build would delay initial generation of revenue which could thereby delay repayments.

turbine availability riskA malfunctioning wind turbine would reduce the revenue generation ability of the project and delay repayments.

lower than expected wind speedsIt is possible that wind speeds for a given period are lower than the Independently verified Project model and this could delay repayments.

RISK FACTOrS

PAGE 15

commercial Investment riskNo compensation fund shall exist for Investors who lose all or part of their investment due to commercial investment risk.

Investment riskThis is a medium-to-long term investment and is not suitable for Investors who may need access to the full amount of their investment within the 8 year investment time horizon. however, capital and interest repayments will commence from year 1.

Foreign exchange The loan repayments will be required to be made to The Finance Company in Euros while the revenue will be generated in Sterling by the SPv. It will be the project developer’s responsibility to manage the risk of adverse movements in the value of the Euro versus Sterling to ensure the full loan repayments are met. however, should Sterling significantly devalue against the Euro for a sustained period of time, the projects may be unable to meet the loan repayments in full.

liquidation riskShould the Finance Company be forced to sell on the Special Purpose vehicles, the value received maybe depressed due to the limited market for this type of project and/or the underlying reasons for the sale.

taxation and Professional adviceProspective investors are advised to make their own independent commercial assessment of the information contained herein and obtain independent professional advice (including inter alia legal, financial and tax advice) suitable to their own individual circumstances, before making an investment decision, and only make such decisions on the basis of their own objectives, experience and resources.

RISK FACTOrS continued


PAGE 16

DATA PROTECTION

BvP fully respects your right to privacy and any information relating to you (including any personal data within the meaning of the Data Protection Acts 1988 and 2003 (collectively the ‘DPA’)) which the Manager obtains and holds about you (‘Information’) will be treated in accordance with BvP’s standard principles regarding client confidentiality and the DPA (where applicable). This includes Information BvP obtains from you or third parties when you apply for an investment in the Fund.

BvP may use the Information for the purposes of:

i) providing an investment in The Finance Company;

ii) group reporting and management purposes;

iii) prevention of money-laundering, financing of terrorism and fraud, and otherwise complying with our legal and regulatory obligations;

iv) any other purposes to which you have consented.

BvP may share the Information, to the extent necessary for the purposes set out in this clause with:

i) anyone providing a service to BvP or acting as BvP’s agents, on the understanding that they will keep the information confidential;

ii) counterparties to transactions executed on your behalf;

iii) public companies in which you directly or indirectly hold shares, on request;

iv) any (or any proposed) assignee, transferee, or successor in title to the whole or any part of the BvP’s business relating to the Finance Company and their respective officers, employees, agents and advisers, provided that any recipient agrees to use your information for the same purposes as it was originally supplied to BvP and/or used BvP;

v) regulatory bodies, law enforcement agencies, other public bodies, and auditors to whom BvP is obliged by law to disclose the Information;

vi) any third party which introduced you to BvP; and

vii) any other party to whom you have agreed BvP may disclose your Information, each of whom may in turn use that Information for the above and other purposes which have been disclosed to you.

You agree to notify BvP without delay in the event of any change in your personal data, to enable us to comply with our obligations to keep your Information up to date.

BvP is obliged to retain client identification and client transaction records for six years from the end of the client relationship or the date of the transaction respectively. Other Information will be retained for no longer than necessary for the purpose for which it was provided to us or as required or permitted for legal, regulatory, fraud prevention and legitimate business purposes.

You have the right to receive a copy of all personal data (within the meaning of the DPA) relating to you which is held by BvP following a written request (for which BvP may charge an administration fee not to exceed €6.35 or such greater amount as permitted by law) and have any inaccuracies in your personal data corrected, by writing to BvP.

BvP is entitled to take reasonable steps to establish your identity in relation to any amendment, access or deletion request and may, at our discretion, require proof of identity or other documents.

PAGE 17PrOCEDurES FOr APPLICATION

Participants should complete the Application Form overleaf and submit it to BvP Investments Limited t/a Business venture Partners, unit 23, Cubes 2, Beacon South Quarter, Sandyford, Dublin 18, Ireland on or before the Closing Date.

Completed Application Forms must be accompanied by a personal cheque or banker’s draft, payable to BvP Wind Finance Company Limited for the amount of the subscription.

BvP reserves the right to close the application list at any time before 30th June 2013 and to reject any application in whole or in part at its absolute discretion (without obligation to give reasons therefore.

Applications to participate in the loan note will be considered only on the terms and conditions of the loan note attached and only if they are made on the application form contained herein. Any agreement purporting to amend or exclude or partly exclude the application of any term or condition of the loan note shall be void.

Only one application will be accepted from each applicant.

In order to ensure compliance with the provisions of the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010, BvP shall be required to establish the identity of each applicant to satisfy anti-money laundering requirements. Application forms must therefore be accompanied by:

i) a certified copy* of either the applicant’s current passport or current driver’s licence;

ii) an original or certified copy* of two different forms of proof of address. Acceptable forms of proof of address are any two of:•recent utility bill (electricity, gas, telephone or mobile phone); or•bank statement

Proofs of address cannot be more than 3 months old and must bear the name and address provided on the application form.

BvP reserves the right to refuse to accept any application which is incorrectly presented or fails to comply with the provisions contained in the Memorandum and, in doing so, shall have no liability whatsoever to any applicant for interest or any resulting loss or damage. All cheques will be lodged to BvP Wind Finance Company Limited’s bank account on the day the loan instrument is executed.

* certified copy means a document which contains a certification signed, stamped and dated by a solicitor, Commissioner for Oaths, Garda, Accountant or Bank Manager certifying that the copy document is a true copy of the original.


PAGE 18

APPENDIx I APPLICATION FORM

Dear Sirs,We wish to apply to participate in the BVP Wind Finance Company Limited Loan Note Instrument.

Personal detaIls

PRIMARy NAME: DATE Of BIRTh:

ADDRESS:

TELEPhONE NUMBER (hOME): MOBILE NUMBER:

EMAIL ADDRESS: NATIONALITy:

PPS/TAX REfERENCE NUMBER (Evidence required):

SECONDARy NAME: DATE Of BIRTh:

ADDRESS:

TELEPhONE NUMBER (hOME): MOBILE NUMBER:

EMAIL ADDRESS: NATIONALITy:

PPS/TAX REfERENCE NUMBER:

I/We wish to subscribe € for loan notes to be issued by BvP Wind Finance Company Limited Loan Note subject to and in accordance with the terms of a Loan note Instrument.

Declaration: I/We declare that the details above are correct, that I/We are over 18 and confirm that I/We understand and accept the Key Features of the loan note as set out in the information memorandum. I/We understand that the investment will not be deemed to have been made until the loan note instrument has been signed and the loan notes issued and that, if and when signed and issued, the investment will commence on 30th June 2013.

PRIMARy SIgNATURE: DATE:

SECONDARy SIgNATURE: DATE:

Investment Advisor Declaration: I/We confirm the following:having conducted a full review of this investor’s financial circumstances, that this Loan Note is consistent with the investor’s investment objectives and attitude to investment risk. We have complied in full with the Anti Money Laundering (AML) and combating terrorist system that applies to all designated bodies with effect from 15 July 2010. Where an investor has been identified as potentially vulnerable (e.g. over 60 years of age) we have followed our internal procedures in this regard.

fIRM NAME:

PRINT ADVISOR NAMES: DATE:

ADVISOR SIgNATURE: DATE:

PAGE 19

APPENDIx II ILLUSTRATIVE PROJECTS· The Finance Company will not invest in all of the projects listed below.

· The Capital Expenditure Costs (Capex) listed below will partially be funded by equity introduced by the project developers (5% to 20%)

NORThERN IRELAND

GOrTuMLEY hILL, STrABANE, CO. TYrONE

Average Annual Wind Speed 7.2m/s

Projected Annual Turnover at P90 £205,629

Land Lease Term 30 years

Total Capex £534,501

Project mIlestone

Land Secured January 2012

Planning Secured May 2011

Grid Secured February 2012

Drawdown of Finance June 2013

Start of Construction July 2013

Project Operational September 2013

gortumley hills Project


PAGE 20

APPENDIx II ILLUSTRATIVE PROJECTS

NORThERN IRELAND

DuLLErTON rOAD, STrABANE, CO. TYrONE





Project mIlestone

Land Secured January 2012

Planning Secured August 2010

Grid Secured February 2012




Dullerton Road Project

PAGE 21


NORThERN IRELAND

BALLYBOGIE rOAD, CLOuGh MILLS, CO. ANTrIMAverage Annual Wind Speed 6.5m/s




Project mIlestone

Land Secured August 2011

Planning Secured December 2011

Grid Secured May 2012



Project Operational August 2013

Clough Mills Project


PAGE 22


NORThERN IRELAND

BALLYMOYEr rOAD, NEWTOWNhAMILTON CO. ArMAGh





Project mIlestone

Land Secured October 2011

Planning Secured July 2012

Grid Secured November 2012



Project Operational August 2013

Knockavannon Project

PAGE 23

NORThERN IRELAND

CurrIN rOAD, ENNNISKILLEN, CO. FErMANAGhAverage Annual Wind Speed 6.3m/s




Project mIlestone

Land Secured June 2011

Planning Secured May 2012

Grid Secured October 2012


Start of Construction August 2013



Breagho Project


PAGE 24

dIsclaImer

This Investment Memorandum has been issued by BvP Investments Limited, (“BvP”) and is being delivered to parties who have expressed an interest in investing in The Finance Company. The information contained herein does not purport to be comprehensive and is strictly for information purposes only. This Investment Memorandum does not constitute an offer and shall not form the basis of any contract between BvP and any prospective investor. Prospective investors are advised to make their own independent commercial assessment of the information contained herein and obtain independent professional advice (including inter alia legal, financial and tax advice) suitable to their own individual circumstances, before making an investment decision, and only make such decisions on the basis of their own objectives, experience and resources. Interested parties are not entitled to rely on any information or opinions contained in this document or the fact of its distribution for the purpose of making any investment decision or entering into any contract or agreement with BvP in relation to the investment in the Finance Company.

This information is provided by way of general guidance only and purports to be neither exhaustive nor definitive and is subject to change without notice. It is not a substitute for professional advice. You should consult your tax advisor about the rules that apply in your individual circumstances. While all reasonable care has been given to the preparation of this information, no warranties or representation, expressed or implied, are or will be given or liability accepted by BvP, the Advisor or any affiliates, or their Directors or employees of either BvP or their registered Auditors in relation to the accuracy, fairness or completeness of the information contained herein or any other written or oral information or opinions provided now or in the future to any prospective investors or their advisors and so far as permitted by law and except in the case of fraud by the party concerned, no responsibility or liability is accepted for the accuracy or sufficiency thereof, or for any errors, omissions or misstatements, negligent or otherwise, relating thereto. Further, BvP, or any of their shareholders, directors, officers, agents, employees, advisors or any associated entities shall not be responsible or liable for any costs, losses or expenses incurred by prospective investors in connection with the Finance Company. BvP reserves the right to replace any of the professional advisers associated with the project with equally qualified professionals. An investment in the Company should only be considered by investors who are able to bear the economic risks of their investment for a medium to long term period of time and who can afford to sustain a total loss of their investment. BvP gives no undertaking to provide a prospective investor with access to any additional information or to update this Investment Memorandum or any additional information, or to correct any inaccuracies in it which may become apparent. BvP reserves the right, without giving reason, at any time and in any respect, to amend or terminate the procedure for investing in the Company or to terminate negotiations with any prospective investor. The issue of this Investment Memorandum shall not be deemed to be any form of commitment on the part of BvP to proceed with any transaction with any prospective investor or any other party. This Investment Memorandum has been made available on the express understanding that any written or oral information contained herein or otherwise made available will be kept strictly confidential and is only directed to the parties to whom it is addressed. No part of this document is to be reproduced without our written permission. This publication is solely for information purposes and does not constitute an offer or solicitation to buy or sell securities. This document has been prepared and issued by BvP on the basis of publicly available information, internally developed data and other sources believed to be reliable. We or any of our connected or affiliated companies or their employees may have provided within the last twelve months, significant advice or investment services in relation to any of the securities or related investments referred to in this document.

PAGE 25

unit 23, Cubes 2, Beacon South Quarter Sandyford Dublin 18, IrelandTelephone: +353 1 657 2900 Email: [email protected]

INVESTMENT MEMORANDUM - BVP · BvP Investments Limited t/a Business venture Partners (“BvP”) proposes to raise finance for the construction and operation of medium size (250 kW)

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