GENERAL

Enwave Canada

Enwave was a district energy business in and owned by City of Toronto - $330mm investment

Please note this investment was executed during prior employment of a Reinova Co-Founder

Amount Invested

$330

Date of Investment

2012

Transaction Overview

Municipal owned district heating business with 2.2mmlbs of heating capacity and in-progress construction on a deep lake water cooling facility
Brookfield acquired the business from the City of Torontoand an institutional investor, with a plan to execute capital projects and grow the customer base

Transaction Overview

Municipal owned district heating business with 2.2mmlbs of heating capacity and in-progress construction on a deep lake water cooling facility
Brookfield acquired the business from the City of Torontoand an institutional investor, with a plan to execute capital projects and grow the customer base

Investment Thesis

Sector wasn't well understood or known in North America and although not a rate-regulated utility, had many similar attributes
As transaction lead, leveraged knowledge gained in Europe to underwrite asset class within Brookfield
Opportunity to complete and prove-out and large-scale district cooling project that was in construction
Ability to secure long-term contracts, provide essential service, and secures ticky customer contracts with commodity pass-through
Changed and expanded management team to implement multi-year operational and commercial transformation and add buy & build capability

Invest for Value

City's Liquidity Needs

City of Toronto was seeking liquidity for its municipally owned district energy utility
Strategically acquired knowledge on the asset before a City-supervised sale

Asset at inflection point

Customer growth had plateaued
Business was commissioning deep lake water cooling which was not fully sold
There where some questions whether existing business had ability to contract capacity
Capital structure not optimized as asset class not well understood

Value Creation

Customer Growth and Value Proposition

Leveraged real-estate knowledge to better articulate customer value proposition
Significantly grew customer base organically

EBITDA Growth and Capital Structure

135 new customer buildings added and EBITDA grew at compounded annual rate of over 20%
Improved capital structure to allow execution of investment-grade debt issuance

Built out platform, including acquisitions and integration capability

Enhanced business commercial processes
Implemented M&A strategy to acquire smaller systems in London, Windsor, Charlottetown
Completed multiple high-quality acquisitions in Canada

Building for Exit

Fully-built operating platform at exit

Institutionalized platform capabilities
Stronger internalized commercial, financial, organic growth, project execution and M&A capabilities

Demonstrated buy & build execution

Successfully drove value in acquired assets
The acquisition of Enwave Canada enabled Brookfield to replicate the investment thesis in the US

Exit with Platform value

Sold Canadian business to OTPP & IFM
US business sold to QIC & Ullico
Captured significant platform value above in-place cashflows

Enwave Canada

Amount Invested

Amount Invested

$330

$330

Date of Investment

Date of Investment

2012

2012

Transaction Overview

Transaction Overview

Transaction Overview

Investment Thesis

Investment Thesis

Invest for Value

Invest for Value

City's Liquidity Needs

Asset at inflection point

Value Creation

Value Creation

Customer Growth and Value Proposition

EBITDA Growth and Capital Structure

Built out platform, including acquisitions and integration capability

Building for Exit

Building for Exit

Fully-built operating platform at exit

Demonstrated buy & build execution

Exit with Platform value

Status:

$1.9B

Return:

$1.9B

Returns

Returns

Other Case Studies

Building Renewable US Hydro Business

Over 2007-14 acquired multiple hydroelectric portfolios, primarily in the United States

Wind Energy Transmission Texas

415-mile regulated, high-voltage transmission system in West Texas connected to 2,873 MW of wind and solar farms

Bord Gais Energy

Carve-out of multi-utility to develop ~€700M Irish renewable platform build – investment followed by CEO Role