F.K. GENERATORS & EQUIPMENT LTD.

GALIL ST, AIRPORT CITY BEN GURION AIRPORT, ISRAEL. Tel: +972 3 9720500 Fax: +972 3 9737766 P.O.BOX 262

Executive Summary – Iquitos, Peru 80MW Power Station – 06/03/2017

1. Background

 On September 18th, 2013, the Peruvian Ministry of Energy and Mines (“MEM”) awarded
Genrent del Peru S.A.C. (“Genrent”) a 20-year concession to design, finance, build,
operate and maintain a new HFO thermoelectric power plant in Iquitos, Peru with a nominal
capacity of 80 MW.

 Genrent is a company being holed 100% by the F.K Group.

 The power plant will produce and generate electricity, through a new transmission line that
will be built as part of this project, for the city of Iquitos and its 600,000 residents.

 In the first stage the power plant will generate power to the local grid until the city will be
connected to the national grid (Moyobamba project), then the second stage will take place
and the power station will be functioned as Cold Reserve.

 All construction permits had been issued by October 2015 and immediately after that the
EPC works has begun for the power plant and the transmission line. Completion and
commercial operation is expected to be on June – September 2017.

 The O&M activities and services will be provided by one of the group’s subsidiaries.

 On December 2017, the Vpower Group Holding Ltd (“Vpower”) has joined the project with
credit facility agreement of USD 30 million, that can be converted into 51% in Genrent.

 Vpower is a USD 1 billion company listed in the HK stock exchange (1608.HK)

 The project construction cost is approximately USD 107 million.

 F.K. GENERATORS & EQUIPMENT LTD.
GALIL ST, AIRPORT CITY BEN GURION AIRPORT, ISRAEL. Tel: +972 3 9720500 Fax: +972 3 9737766 P.O.BOX 262

2. Details about the project

 Concession type: B.O.O.

 Concession period: Construction period + 20 years.

 Availability fix tariff: The concessionaire won the tender with the availability tariff of
$16,948 MW/Month linked to the index. As of this date the availability tariff has been
updated to $17,897 MW/Month.

 Generation tariff: The generation price (per MWh) will be determined during March – April
2017 by Osinergmin, and it will cover all generation costs (O&M team, spare parts, etc.)
plus operational margin - price per MWh is expected to be 14.85 USD.

 Fuel costs: No costs (pass through).

 Index: Finished goods less food and energy index (USA).

 Concession timeline:

 Construction timeline:
 F.K. GENERATORS & EQUIPMENT LTD.
GALIL ST, AIRPORT CITY BEN GURION AIRPORT, ISRAEL. Tel: +972 3 9720500 Fax: +972 3 9737766 P.O.BOX 262

3. Project revenues are based on:

 First stage (0-10 years): Availability fix price (linked to the index) + generation tariff per
actual power production that will be purchased and paid by ELOR (Electro Oriente).

 Second stage (0-20 years): Availability fix price (linked to the index) as cold reserve to
SEIN (The National Interconnected System) + generation tariff in case of operation.

4. Revenues simulation:

 Availability – Genrent (cold reserve / stand by):

o Monthly income for the first year (57 MW) – 57 X $17,897 = $1,020,134.

o Monthly income for the second year (69 MW) – 69 X $17,897 = $1,234,899.

o Monthly income for the third year until the end of the concession period (79.5 MW) –
79.5 X $17,897 = $1,422,818.

 Generation - O&M service provider:

o Based on the assumption that the power station will generate an average capacity of
60%, during 80% of the year* the expected monthly income shall be:

720h (monthly hours) X 80% X 79.5MW X 0.6 X $14.85 = $408,006

*As the power station planned to be the base load for the city of Iquitos it is more likely the availability will be higher than 90%

5. Expenses/costs simulation

 Availability – Genrent (cold reserve / stand by)

o Monthly costs related to the availability of the power station are expected to be
approximately $220,000 for preservation team (8 personnel), administrative,
accommodation, insurances, security, etc.

o Financing costs.

 Generation - O&M service provider

o Generation expenses are expected to be 9.5-10 USD per MWh (spare parts,
maintenance, reinforcement of the O&M team, lube oil, etc.).

o Based on the assumption that the power station will generate an average capacity of
60%, during 80% of the year the expected monthly expenses shall be:

720h (monthly hours) X 80% X 79.5MW X 0.6 X $10 = $274,752

o Fuel costs: non-costs – pass through mechanism.