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Overview

Free Energy focuses on selective development and construction/ reconstruction of small size (micro, mini and small) grid-connected hydro power plants, ranging between 150 kW – 10 MW installed capacity each. Our territory of operation is Ukraine. Our investment strategy is long-term therefore the business cycle we employ comprises: development, construction and long-term operation or short-term operation with exit if we consider feasible selling a certain project.

Typical hydro power plant project we would consider will have installed capacity ranging between 350 kW and 1,5 MW and would require EUR 1,4 – 6,0 million investment. The development and construction usually takes two years, but it can be substantially shorter or longer depending on project particularities. Mainly we employ own capital but occasionally we would consider engaging debt financing from local banks or international financial institutions to fund the construction of the project.

In 2009 the Law of Ukraine on Electric Energy Industry was adopted establishing feed-in tariffs for power plants which generate electricity from renewable sources. The tariffs are in force till the end of 2029. Acting from 2015 “green” tariffs for small hydro are the following:

Micro HPP

< 200 kW

174,3 EUR/ MW*h

Mini HPP

< 1 MW

139,4 EUR/ MW*h

Small HPP

< 10 MW

104,6 EUR/ MW*h

This level of tariffs is feasible for this type of industry and allows a payback period ranging from 5 to 9 years depending on the project. We do not necessarily tend to be industry leaders, but we definitely have clear goals in terms of enterprise value, capacities installed, turnover, return on investment, etc. due on a certain dates. In our activity we follow certain principles: promotion of hydro energy as a renewable energy source, energy diversification and independence, optimal use and exploitation of renewable resources. We strive in promoting efficient and innovative clean energy technologies. Free Energy is also interested in realization of projects in other renewable energy sectors such as solar or bio. For solar we expect changes to legislation hopefully in the first half of 2015 which would drop the “local content” requirement and allow rapid growth of the industry.