1. Project Finance Malaysia
Effective Financing
Strategies – A debt
Providers Perspective
7 September 2011:

2. A Debt Providers
Perspective

3. Certainty lowers cost…
The Macro Environment - Government is important
International Protocols, conventions, treaties etc.
National legal system
Energy Policy
Green Energy Policy
Developed with input from all industry participants
Policy into laws and regulation
– Targets are fine, but action by example and investment is better
– e.g. Buying green power, national equity investment pools, residual risk management
– Forms of Assistance: Fuel, FIT, direct subsidies (land, funds, etc), taxation provisions, grants, loans,
insurance (backstop, liability assumption, provision, etc), ownership, demand quotas
The Big Picture – Cashflow is king
Contractual terms and risk allocation
Energy: Certainty and consistency of input
Off take: open market, captive, PPA etc.
3

4. Certainty, clarity and contractual terms
The Project Level
Equity: Whom, for how long and what level of expertise.
Structure: Simple, with minimal risk of interference/untoward change. Scalable?
Capital costs and recurrent costs: Obligations to complete and operate as stated. Pass through of
penalties? How will the plant manage declining industry unit costs. Fixed vs operating, more
important where energy consistency is not certain, (caloric value of waste)
Income: Min debt servicing assuming downside case. Subsidy certainty.
Returns: ROE and payback period vs debt tenor
Non-recourse: Equity preference, lenders objective.
The details are important and the more that are “missing” the greater concerns and perception of risk
4

5. Selected alternative energy experience
Global expertise across
key sectors
2011
2009
EUR2.5bn
USD245m
Confidential
USD3.4bn
Advisor to S-Oil’s acquisition of
33.4% stake in HK Silicon
Support bid to acquire Beijing
Leader & Harvest in China
Advisor
Advisor
Advisor
Acquisition of Jiangsu
Zhongneng Polysilicon
Technology and USD475m
share placement
Advisor and placing agent
Ongoing
2010
2010
2010
EUR150m
USD82.8m
EUR260m
Rights issue to fund
deployment of Concentrating
PV solar technology
Follow-On Nasdaq
Combined Equity and
convertible bond rights Issue
Listing of K-Green Trust by way
of introduction
Global co-ordinator
Equity
Capital
Markets
2011
Proposed merger of Iberdrola
with Iberdrola Renovables, its
listed renewable energy arm
Advisory
2011
Co-Manager
Advisor
Issue manager
DCM
HSBC Principal Investments
2010
2011
DCM /
Principal
Invest.
2011
RMB750m
RMB150m
First offshore public wind
energy bond issue in Asia
Offshore bond to finance a
China Clean tech project
Equity investment in Bloom
Energy, the first company to
commercialise solid oxide fuel
cells
Principal Investments led
USD350m round of equity
financing for Better Place and
took a 10% stake
Sole Lead Manager and
Bookrunner
Sole Lead Manager and Sole
Bookrunner
Principal Investor
Principal Investor
2010
Better Place

6. Leading project finance franchise
Award winning and market
leading project financing and
Renewables business
HSBC leads from 2006-2010
the PF Financial Advisor
League Tables
Source:The Banker,
October 2010
Most innovative Investment Bank for
Infrastructure and Project Finance
Most innovative Investment Bank for
Corporates
Most innovative Investment Bank for
Bonds
Most innovative Investment Bank for
Islamic Finance
Advisor
1
2
3
4
5
Source:The Asset Triple
A Awards, 2011
HSBC
SBI Capital Markets
BNP Paribas
Citigroup
PwC
Source: www.ijonline.com
18.5
16.9
14.3
13.8
11.1
Best Project Finance House
Best Loan House
Best Bond House
Best Debt House
Source:Euromoney
Awards for
Excellence, 2011
Best Global Infrastructure and
Project Finance House
Best Project Finance House in Asia
Best Debt House in Asia
Best Debt House in Western Europe
2011
GBP340m
92MW wind energy project
which is India’s largest project
financed wind power financing
and first to be ECA supported
2010
100 MW of solar panels on
social housing across UK
MLA, Swap Provider and
Market Bank
2010
€354 million
Solacor 1 & 2
Solar Thermal Project in
Spain (100MW)
Structuring Bank& MLA
Euromoney Awards 2011
Amount (USDbn)
2011
Structuring Bank& MLA
2010 Regional awards
Power and Renewables
PF Financial Advisor (2006-10)
Selected renewables project finance transactions
€543 million
Palma Saetilla Solar Thermal
Project in Spain (150MW)
MLA & Co-ordinator Bank
2010
2009
US$80 million
GBP340m
Baicheng Wind Farm
China
220MW Wind Power Portfolio
(194MW offshore)
Mandated Lead Arranger
Mandated Lead Arranger

7. Renewable financing franchise
HSBC has consistently led the
execution of ground breaking
financing transactions in
Renewable Energy including
Renminbi bond financing
Exemplary transactions for HSBC clients
First financing of large scale UK distributed project finance
Date
March
2011
First ever offshore public wind energy bond issue in Asia
March
2011
First RMB denominated non-recourse wind financing in China
April 2010
First ECA supported Vestas wind farm in India
Most innovative
Investment Bank for
Infrastructure and
Project Finance
November
2009
Highlights
First financing of large scale roof-top solar PV in the UK on
non-recourse basis
100MWp project across the UK through 38,000 2.6Kw
installations with free installation and free electricity for
tenants, 25y guaranteed FiT for SPV
HSBC equity partnership through HSBC Environmental
lnfrastructure fund (40%)
China WindPower Group Limited debut bond offering in
international debt markets and the first ever offshore public
wind energy bond issue in Asia
Despite an uncertain market backdrop, the bond priced at the
tight end of price guidance, and was upsized from RMB 500 to
750 million on the back of strong demand
HSBC acted as Sole Lead Manager and Bookrunner on this
landmark transaction
49.95MW wind farm in Baicheng China utilizing Suzlon
turbines
First non-recourse financing for a wind farm closed in China
under the Chinese framework
First RMB denominated financing in China
HSBC acted as sole structuring bank, joint-MLA, facility &
security agent, account bank
92 MW Jangi wind farm project is one of the largest wind IPPs
in India
The largest wind power financings in India on a project finance
basis and the first ECA supported Indian wind sector
transaction
HSBC acted as mandated lead arranger, swap counterparty,
agent for the commercial facility and EKF facility, security
agent and account bank

8. Disclaimer
The Global Banking and Markets division of The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) has prepared this document (the
“Document”) for information purposes only. This Document does not constitute a commitment to underwrite or purchase or subscribe for all or any portion of
the securities mentioned herein. Any such commitment shall be evidenced only by a fully executed subscription agreement, purchase agreement or similar
contractual document. This Document should also not be construed as an offer for sale of or subscription for any investment, nor is it circulated to
invite/solicit any offer to purchase or subscribe for any investment.
HSBC has based this Document on information obtained from sources it believes to be reliable but which it has not independently verified. HSBC makes no
guarantee, representation or warranty and accepts no responsibility or liability for the contents of this Document and/or as to its accuracy or completeness
and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this
Document. HSBC and its affiliates and/or its or their respective officers, directors and employees may have positions in any securities mentioned in this
Document (or in any related investment) and may from time to time add to or dispose of any such securities (or investment). HSBC and/or any of its
affiliates may act as market maker or have assumed an underwriting commitment in the securities of any companies discussed in this Document (or in
related investments), may sell them to or buy them from customers on a principal basis and may also perform or seek to perform banking or underwriting
services for or relating to those companies. As HSBC is part of a large global financial services organisation, it or one or more of its affiliates may have
certain other relationships with the parties relevant to the proposed activities as set out in this Document, and these proposed activities may give rise to a
conflict of interest, which the addressee hereby acknowledges and which will be addressed accordingly.
No consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient. This Document is not a
substitute for, and should not be regarded as, an independent evaluation and analysis and does not purport to be all-inclusive. Each recipient should
perform and is deemed to have made its own independent investigation and analysis of the Project, the Shareholders, the Sponsors, the Guarantor and all
other relevant matters. This Document, which is not for public circulation, must not be copied, transferred or the content disclosed, to any third party and is
not intended for use by any person other than the addressee or the addressee's professional advisers for the purposes of advising the addressee hereon.
The Hongkong and Shanghai Banking Corporation Limited, Level 15 HSBC Main Building, 1 Queen’s Road Central, Hong Kong SAR
© Copyright. The Hongkong and Shanghai Banking Corporation Limited 2006-10, ALL RIGHTS RESERVED. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior
written permission of The Hongkong and Shanghai Banking Corporation Limited.
8