Infratil : US Renewables Market and Illustrative Valuation Guidance

Infratil Update September 2023

US Renewables Market and Illustrative Valuation Guidance

Industry

Dynamics

Our outlook on the US renewable industry remains highly positive, with significant tailwinds present despite a challenging macroeconomic environment and prolonged period of uncertainty

• Significant and growing total addressable market with global investment in renewables reaching ~US$500 billion in 2022, with the U.S. forecasted to be the second-largest market in the world for renewables investment. Solar and wind are the leading technologies with global investment levels of ~US$300 billion and ~US$175 billion in 2022, respectively1
• Due to the strong uptick in global supply and demand, as well as the modernisation of grid infrastructure for increased capacity and reliability, global new grid investment is projected to grow from ~US$275 billion in 2022 to over ~US$300 billion in 20231
• Like most other industries, the renewables industry has been impacted by adverse macroeconomic conditions including higher inflation, higher interest rates, and supply chain constraints - which have led to increased financing costs, increased capex, as well as increased lead times on certain high-demand components (e.g., modules and battery cells)
• Despite this, renewables as an asset class have been highly resilient (e.g., national blended PPA prices (solar and wind) have seen increases in 2022 in line with higher financing and capex costs), and renewables are still estimated to provide the lowest levelized cost of energy1
• Regulatory tailwinds have also mitigated against an uncertain and challenging macroeconomic environment, with the Inflation Reduction Act (IRA) providing unprecedented, long-term policy support for the U.S. energy transition
• In addition to tariffs and trade restrictions that have been imposed on international supply chains, the U.S. has strongly reinforced the need to increase onshore manufacturing capabilities - which has been bolstered further by the IRA
• Following two record years in the renewables M&A and capital markets environment, utility- scale renewable platform M&A has since slowed down in this uncertain environment

2

1 Source: Bloomberg New EnergyFinance (BNEF)

Comparable Companies

Competitive Landscape

Similar large-scale private competitors have also raised capital over the last two years to increase scale, pursue M&A, and execute on their near-term business plans

Comparison of Longroad Against its Private Peers of Similar Scale

• Similarly large growth-oriented private renewables companies include Apex Clean Energy, ConnectGen, Cypress Creek Renewables, and D. E. Shaw Renewable Investments (DESRI)
• Many of these competitors have also raised capital over the last two years to increase scale, pursue M&A, and execute on their near-term business plans, with some rumoured to currently be in the market

Includes solar, wind,
and storage1
Operating & under	2,400		400	400	>2,000	4,400	>2,000	3,000
construction assets
Development assets1	28,500		39,100	24,300	8,300	21,500	12,400	25,800
Total portfolio	30,900		>39,500	>24,000	>10,000	>25,000	>15,000	> 27,500
assets (MW)
Footprint (States)	>20		22	12	14	11	23	9
Team Size (#)	~170		~260	~45	~320	~200	~260	~100
•	$300m	•	Acquisition of	• Rumoured				• $600m equity
	minority		majority	ongoing sale	•	Rumoured	• $500m equity
	investment		stake in Oct-	of operating	investment	investment in
Recent		21 by Ares	• Acquired by	ongoing	Mar-22 led
from MEAG		assets	announced in
	Management	potential	by funds
Transaction(s)	and $100m		(pivoting	EQT in Jul-21	Jun-22 from
•	Rumoured	capital raise /	managed by
	each from IFT	away from		Generate
	and NZ Super		ongoing	ongoing full		sale	Capital	Ares
		portfolio sell-			Management
	in Aug-22		sales process)
		down

Source: Based on public information and estimates, compiled by a third-party, and may not represent the most current / up-to-date information. 1 Due to limited availability of public information	4
relating to storage pipelines in particular, these amounts may not be fully reflected in some of Longroad's selected peers above

Broad Public Comparables

An available set of publicly comparable companies for Longroad is limited. Factors to consider are scale, operating asset base, size of development platform, and technology mix, amongst others

Comparing Longroad Directly to Publicly-Listed Renewables Companies is Challenging

• While public IPPs and YieldCo's serve as valuable operating benchmarks, Longroad is not directly comparable due to reasons such as scale or portfolio & technology composition, amongst others
• Longroad's relative stage of maturity and emphasis towards growth is evidenced in the metrics below; currently having a much lower proportion of operating assets as a % of total MW, and demonstrating a strong track record of development growth relative to its peers (noting that peers also include M&A)

			NTM EV / EBITDA1		Operating +		Operating		Avg. Annual		Annual
				development		Capacity as a		Installation		Development
							pipeline MW2		% of Total3		(MW)4		Target (MW)5
	6				11.0x	75,700	19.4%	3,900	6,500
					22.4x		160,300		16.2%		1,750		2,300
IPP					11.2x		93,200		16.3%		900		5,700
				11.4x		13,600		31.1%		300		900
					12.1x		23,300		30.1%		1,000		1,500
					9.5x		134,400		15.2%		1,600		3,700
		7		9.0x		5,600		38.9%		200		N/A
YiledCo
				9.8x		40,500		25.3%		1,000		1,750
					10.0x		9,300		N/A		1,000		4,750
							30,900		7.7%		1,275 (2022		1,500
									Actual)
Source: Based on public information, FactSet, and Wall Street research as at August 2023, compiled by a third-party.1 Reflects median of broker research estimates; 2 Includes operating, under	5
construction, and pipeline; 3 Reflects operating and under construction MW divided by total platform MW;4 Reflects 2019A - 2023E average annual capacity added to the operating or late-stage

(FNTP) pipeline, includes M&A; 5 Reflects company's guidance annual development targets / additionsto capacity; 6 Represents renewables capacity only; 7 Representsrenewables capacity only