Corporate Presentation
April 2015
1
Safe Harbor Statement
This presentation contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange
Act of 1934 and as that term is defined in the Private Litigation Reform Act of
1995, which are subject to risks and uncertainties and may change at any time.
These statements are only predictions and involve known and unknown risks,
uncertainties and other factors including, without limitation, (i) uncertainties
regarding our ability to obtain adequate financing on a timely basis including
financing for specific projects, (ii) the financial and operating performance of our
projects after commissioning, (iii) uncertainties regarding the market for and value
of carbon credits and other environmental attributes, (iv) political and
governmental risks associated with the countries in which we operate, (v)
unanticipated delays associated with project implementation including designing,
constructing and equipping projects, as well as delays in obtaining required
government permits and approvals, (vi) the development stage of our business
and (vii) our lack of operating history. As such, there is no assurance that the
initiatives described in the presentation will be successfully implemented or meet
expectations.
2
Company Overview
‹ A clean energy company that develops, acquires,
manages and owns waste-to-energy projects
‹ Poised for rapid growth, operating in one of the
fastest expanding markets
‹ Proven track record of complete development
and closing of 2 large US projects
‹ In a unique and strong position, with financial
backing from top financial organizations, leading
technology partners and a highly experienced
and multidisciplinary team
‹ A promising outlook, with available cash, secure
cash flow for many years and a substantial flow
of new projects in the pipeline
3
Mission Statement
Build-Own-Operate and Acquiring
income generating assets
in the waste to energy market
Growth Engines:
‹ Acquisition of fully operating facilities: Anaerobic Digester, Landfill Gas to Energy
‹ Developing Anaerobic Digester’s and Landfill Gas to Energy Projects
4
Waste to Energy Market
‹ Waste to energy is a technology used to
convert organic solid waste generated from
various domestic, commercial, industrial,
agricultural users into energy
‹ Different technologies are used to process
waste and each technology has a different
course of action, but the end products are
in the form of electricity, steam and compost
‹ The energy generated from waste is
converted and fed mainly to electricity and
gas grids.
5
Challenges
‹ Global WTE market was valued at USD 24
billion in 2012 and is expected to reach USD
37 billion by 2020
Drivers
The WTE Market Size and Growth
6
Strong shift towards green energy and
harmful methane gas elimination around
the world coupled with decreasing
landfill area is expected to remain key
driving factors.
Government and States regulatory and
financial support in the form of tax
benefits, subsidies and organic waste
diversion from landfills have a major
positive influence
High upfront cost associated with
establishment of WTE plants is
expected to continue and affect
market growth
Waste to Energy Technologies and Applications
Technologies
Applications
Thermal
Technologies that use heat or combustion to treat
wastes
Biological
Technologies that use bacteria or other organisms to
produce gas from waste
7
Electricity
Steam
Natural Gas
Multiple Revenue Sources
Long-term contracts
offered by electrical
and gas companies
to renewable energy
producers
Heat generated by
the process can be
used directly to warm
homes and buildings
8
Feed-inTariff
Residual
Heat
Tipping Fee
Compost
The charge levied
upon a given quantity
of waste received at
a waste processing
facility
Digested solids after
the digestion process
used for farming and
land application
Strong Government Incentives
All over the world governments are providing different types of incentives that
improve significantly the financial results:
‹ Renewable Energy Certificates (REC) – add on to the standard electricity and gas prices to
enable higher Feed-in-Tariff, which is the price paid by utilities for purchasing the electricity.
‹ Subsidies and Tax Credits – special grants and tax credit offered by a local or federal taxation
authority as an incentive for renewable energy systems
‹ Financing: Loans provided at attractive rates and payment terms
‹ Renewable Portfolio Standards (RFP): places an obligation on Utilities to produce a specified
fraction of their electricity from renewable energy sources
9
Blue Sphere’s Operation and Business Model
Build-Own-Operate
organic WTE facilities
• Develop opportunities,
manage projects, build
plants and manage
operating facilities
• Generate revenues from
Tipping Fee and Power
Purchase Agreements
(PPA) with electric
companies and selling byproducts
10
Acquisition of
operational WTE plants
• Acquire existing fully
operational plants
generating electricity and
revenues
• Turnaround to increase
revenues and cash flow
Landfill gas-to-energy
facilities
• Partner with landfill
owners to generate
electricity from methane
emissions
• Monetize untapped
methane gas and reduce
harmful emissions
Build-Own-Operate Anaerobic Digester Project in North Carolina
‹ Size: 5.2 MW
‹ PPA: Duke Energy – 15 years
‹ Construction Cost: $27m
‹ Current status: In construction
‹ Energy production start: Q4 2015
‹ Feedstock: organic waste
‹ Compost: sold to third parties
‹ Expected annual revenues: $8.5m
‹ Project IRR: 25%
‹ Funding: Entropy - York Capital Group
‹ Ownership: 25%
11
Build-Own-Operate Anaerobic Digester Project in Rhode Island
‹ Size: 3.2 MW
‹ PPA: National Grid – 15 years
‹ Construction cost: $20m
‹ Current status: In construction
‹ Energy production start: Q4 2015
‹ Feedstock: organic waste
‹ Compost: sold to third parties
‹ Expected annual revenues: $6M
‹ Project IRR: 22%
‹ Funding: Entropy - York Capital Group
‹ Ownership – 22.5%
12
Projects Pipeline
‹ AD Projects Acquisition
- Definitive agreement to acquire 4 facilities in Italy
2020
• Financial Closing expected April -May 2015
104 MW
• 1 MW facilities each fully operational for at least one year
• Plants producing high EBITDA of 0.95 MM Euro each
• Expected to generate a 25% IRR
- 12 more facilities now being evaluated
64 MW
Several major projects at various development phase in
the US.
2017
42 MW
- Additional projects being examined in Canada, England
and Israel
- Identified portfolio of landfills primarily in SE U.S.
- Working in partnership with landfill owners to convert
methane gas emissions from landfills into electricity
13
95 MW
2018
‹ AD Projects Development
‹ Landfill Gas-to-Energy Projects
2019
Projected Accumulated
Energy Production
2016
18 MW
2015
12 MW
Partners
Jointly pursuing project acquisition and development opportunities with some of the
biggest names and financial backers in the business
• York Capital management is based in NYC and manages $24 billion in assets
• York has invested in Blue Sphere’s Charlotte NC and Rhode Island projects
• The largest electric power holding company in the United States, supplying and
delivering energy to approximately 7.3 million U.S. customers
• Blue Sphere signed a 15-year power purchase agreement with Duke Energy
(NYSE:DUK) to buy electricity from its NC facility
• National Grid is an international electricity and gas company based in the UK and
northeastern US
• The company has signed a Power purchase agreement for Blue Sphere’s RI plant
14
Management Team
Highlights
Josh Shoham
Chairman
Shlomi Palas
Roy Amitzur
Chief Executive Officer
Executive Vice President
Steven Paulik
Gary Kuehl
Mark Radom
CFO USA
Chief M&A Officer
General Counsel
150 +
YEARS OF
RELEVANT EXPERIENCE
3
AVERAGE YEARS
WITH BLUESPHERE
Shlomo Zakai
CFO
Dr. Efim Monosov
Gidi Amitzur
CTO
VP Eastern Sphere
9
TOTAL EMPLOYEES
15
Value Proposition
‹ Financial Strength
- Signed agreement with York Capital and will receive $5 million in cash for the next 12 months
for closings on 2 facilities
- Continuous revenue stream of $1.5 million per year for the next 15 years from two AD plants in
US with a signed PPA
- $700 thousand per year for 13 years from initial 4 plants in the process of being acquired in Italy
‹ Geographical Market Focused
- The US market is in a rapid growth and Blue Sphere is gaining strong foothold in the market
- In Italy Blue Sphere is profiting from the existing market by acquiring operational facilities
- Israel is in the early stages of its waste to energy market development and Blue Sphere is
positioned to become a market leader
16
Thank You
17