Investment in OTEC6 KEY STEPS From Idea to Sales, Sustainability and Growth

Mizuan A. Manaf

UTM Holdings Sdn. Bhd.

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Investment in OTEC6 KEY STEPS From Idea to Sales, Sustainability and Growth

1. Market • What Business are you in? / How big is this Opportunity?• Fundamental Market Studies

2. Customers• Who is going to buy your products? At What Price?

3. Supply Chain• Who can help you succeed

4. Generating Revenue• Knowing your numbers• Capex, Opex, Revenue, Returns

5. Building Value• Creating the intrinsic Value• Strengthens & Protects• Key to Sustainability

6. Managing Money Wisely• How you use the money to build value• Key to Growth

7. GOAL; Happy Investors Constitute a Successful Business Outcome

Steps 1, 2 and 3Will get you to

7ONLY IF

YouStrategically Manage

Steps 4,5 &6

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Investment in OTECStep1 Market; What Business Are We In?

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29,850 sq km

76,060 sq km

25,210 sq km

For Illustrative Purposes

KOTA KINABALU

Kuala Baram

Labuan

Kuala Penyu

P. Balambangan

30 km

Semporna

20 km

LL2H

GK1E

KB2E

PB3E

SP1H

Total Area = 131,120 sq. km (>700 m)

Total OTEC Potential = 105,000 MW

Projected installed capacity of OTEC by 2030 = 2500MW

- matching nuclear power.

P.Banggi

SP1H

Estimated Total Capital Investments of USD 500 billion @50% of total resource potential

Investment in OTECStep 1 Market; How Big Is this Opportunity?

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1. Need• Nice to have Vs Must Have

• Compelling Need!! specific medicine not supplement (Steve Job)

• Place in the eco system (Destructive Technology)

• Market Size

2. Approach• Describe Concept to Completion / Sketches to prototype / Implementation Plan

• Resources (ie. Man Power, Tools/Plants)

• Business Model (Framework) / Financial Projections

3. Benefit per Cost Value• Translating technical benefit into numbers

• Elevator Speech / Punch Line / To know more

• Catches Customer Attention

• Attractions to Investors

4. Competition and Alternatives (Who are the players)• What is competition? (like for like; Coke & Pepsi)

• What is alternative? (Coffee, Juice or Plain H20)

5. What’s Next - Moving Forward

Investment in OTECStep 1 Market; Fundamentals Studies

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Investment in OTECStep1 Market; Punch Line

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OIL-FIRED

Capital Cost

Fuel Cost

O&M Cost

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OTEC

Capital Cost

O&M Cost

OIL Total Cost: USD 7.7 billion OTEC Total Cost: USD 1.5 billion

OTEC WILL SAVE OVER USD 5 BILLION/100 MW

Years

Years

COMPARISON FOR A 100 MW PLANT

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Investment in OTECStep 2; Customers

1. Products & Customers’ Willingness to Pay• Energy

• Hydrogen

• Water

2. Customer; Electricity• Deep Sea O&G Platform - Currently Using Gas (Security & Stability Issues)

• Agreed Discount compared to status quo

3. Customer; Hydrogen• Transportation (Consumer Consumption and Government Subsidy Savings)

• Smart Grid for Remote Areas (Subsidy Savings)

• Data Centers (Energy Security)

4. Customer; Water• Potable Water

• Deep Sea Water

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Investment in OTECStep 3; Supply Chain

1. Sun!!!

2. Resource (Water Column > 700m)• 131,120 sq.km

• 105,000 MW potential

• Eco-System

3. EPCC Team• Manufacturers

• Consultants

• System Integrators

4. Operators• Maintenance Contractors

• Logistics Vendors

5. Financiers• Bankers

• Venture Capital

• Investors

• Sponsors

• EPCC8

Investment in OTECStep 4; Generating Revenues

FINANCIAL PROJECTION FOR A 15 MW OTEC PLANT

Investment Cost USD 160,000,000

Annual Revenue USD 17,181,408

Payback Period 12 years

NPV USD 36 million

IRR 12.6%

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Investment in OTECStep 5; Building Values

1. Creating the Intrinsic Values • Strengthen

• Protects

2. Key to Sustainability• Hard Work to Reach the First Big Sale, even Harder to Continuously getting Sales and GROW

• Many Competitor Products created based on the Success of Others (F&B VS Airline)

3. Values• Intellectual Properties (Turbines, Heat Exchangers, Membrane, Design, Integrated Systems, Controls)

• Corporate Governance, Asset and Equity

• Strict NDA and Controls of Supply Chain Partners

• Government Involvement; Comprehensive OTEC Act and Policy

4. Contributions back to Country and Society • Royalty

• Trickling down effects / Spin Off Companies / Job Creations10

Investment in OTECStep 6; Managing Money Wisely

1. Capital Expenditure• EPCC

2. Operating Expenditure• To be used in transacting the business

• Man Power, Maintenance, Logistic

3. Revenues• Profit = Revenue – Cost

• EBIT = Profit - Overhead

4. Cash Flow • Movement of Cash in and out of Business

• Often used to calculate a company value or to determine its situation

5. Terms and Conditions, AR Policy, AP Policy, Sinking Fund, Growth Investment

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Investment in OTECStep 7; GOAL…Happy Investor

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