Strictly Confidential

Preliminary Summary of Terms 25 Million USD October 2011 Private Placement

Project Type Projected MWs Est. Development Cost Est. Free Cash Flow Large Retained Hydro 389 MW $625MM USD $223MM USD

Executive Summary The Opportunity – Sierra Leone emerged from a 10-year civil conflict in 2001 and has since experienced a return to economic growth and political stability, which has resulted in high levels of foreign investment and rapidly growing needs. The country’s burgeoning capital city and industrial mining sector require large quantities of that are currently met with imported hydrocarbons. Sierra Leone’s pro-business regulatory environment permits foreign investors to develop hydroelectric resources and sell the resulting energy directly to the public utility and private mining companies. Africa is taking advantage of this opportunity by developing the phase of an existing hydroelectric dam called Bumbuna, on the Seli River, creating a total estimated 389 MW of hydroelectric . The Firm – Joule Investments is an international developer that finances, builds, owns, and operates projects in emerging markets. Joule Investments owns over 2 GW of rights and is developing over 200 MW of hydroelectric power projects in Latin America. The Bumbuna scheme is the company’s first project in Africa and is being managed through Joule Africa. The managing partners of Joule Africa have invested five years in-country building business and government relationships and have the requisite experience to complete deals effectively and legally in Sierra Leone. The Business Model – Hydroelectric power incurs low marginal costs of production with no input costs, low maintenance costs, and proven and reliable technology. In Sierra Leone, enjoys the added benefit of competing directly against expensive hydrocarbons, resulting in the potential for significant operating margins. Joule Africa intends to sell the majority of its electricity through long-term power purchase agreements (“PPAs”) with international mining companies and most of its remaining energy to the Government of Sierra Leone (“GoSL”) for public distribution. The Project – The Bumbuna project (“Project”) is a proposed 389 MW hydroelectric scheme, of which the first 50 MW has been completed by GoSL and is in commercial operation. The Project was determined to be the most technically feasible and economically lucrative project in Sierra Leone in 1996 by leading hydroelectric engineering consultancy Lahmeyer International. The Project’s advantages include: ownership of the 50 MW operational Bumbuna asset to be contributed into a Joint Venture entity by GoSL, cost effective expansion of the current 50 MW plant, and minimal transmission infrastructure upgrades as major mining customers are either close to the plant (<15 km) or near the already operational Bumbuna-Freetown transmission line. The Timeline – On 19th May 2011, Joule Africa signed a Memorandum of Understanding (“MoU”) with GoSL granting it the exclusive right to develop the Project. Within three weeks, Joule Africa deployed Lahmeyer International to conduct a pre-feasibility study in-country. The completed study confirmed the Project’s economic attractiveness and designed a scheme with limited environmental impact. The full feasibility study is scheduled to commence in October 2011. The Risk – Mining and industrial counterparties present decreased payment risk: two potential customers, London Mining and African Minerals, maintain significant market capitalizations on the London Stock Exchange and in July 2011 African Minerals received $1.5B USD in financing from the Shandong Iron & Steel Group. Comprehensive political risk insurance is available from the World Bank and private commercial underwriters at a cost of between ~1.25% and ~2% of insured capital per annum. Insured risks include coup d’états, war, civil disturbance, and breach of government contracts. The Financing – Joule Africa invested $3MM USD to develop the Project to date and is currently raising a further $25MM, in two tranches, to complete the development process prior to commencing construction. Depending on the timing of the investment, the first $5MM tranche may receive a discount to the second tranche. Joule Africa estimates the total Project will cost $625MM and generate $223MM of annual free cash flow, representing a project ROI of less than 3 years. CONFIDENTIAL ! Sierra Leone Sierra Leone represents a stable, pro-business investment environment with significant opportunities for profitable large retained hydroelectric development. Safe & Stable: One of the lowest crime rates in Africa; homicide rate on par with Canada, according to the UN Office on Drugs and Crime. Economic Growth: Average real GDP growth of 9.7% per year from 2001 – 2010; IMF projects annual GDP growth between 5% and 6% between 2011 – 2016. Pro-Business: World Bank rated 28th best investor protections in the world in 2011; government signing business friendly investment agreements with international companies. Resource Rich: Abundant deposits of iron ore, titanium, bauxite, gold and diamonds; one of the largest magnetite iron ore deposits in the world. Particularly well suited to hydroelectric development with mountainous eastern border and some of the highest levels of rainfall on . Investment Inflows: Over $2B USD of investment initiated in 2010 by publically traded companies: Anadarko, African Minerals, London Mining, and Titanium Resources; and private conglomerate Addax & Oryx. Limited : Installed capacity in Sierra Leone is currently 80 MW, of which 50 MW is from the first stage of Bumbuna and the remainder from small thermal plants. GoSL recently signed a PPA with Addax & Oryx for 15 MW of power at 18¢/kWh. The current 80 MW of energy capacity is roughly enough to power 30,000 British or American homes.

Demand Sierra Leone has seen a significant influx of large industrial investors since 2007 when the new pro-business government took power. GoSL has identified energy supply as its number one priority. Currently, no large-scale energy producer exists to support public consumption or mining activity. In lieu of hydroelectric power, diesel or heavy fuel oil must be used to power most homes, businesses and mining firms. As an example, African Minerals discovered one of Africa’s largest known deposits of magnetite iron ore – 12.8 billion – yet must import heavy fuel oil, which is both expensive and prone to shortages that cause operational downtime, to power its current mining operations. The hydroelectric power from this Project would offer a more reliable source of energy and material cost savings for African Minerals.

Stated power demands in Sierra Leone in the next 5 years are: African Minerals: 400 MW London Mining: 100 MW Other Mining Companies: 200 MW Economic Opportunity Zone (industrial exporters): 100 MW GoSL/Public Demand: 100 MW Total Demand: 900 MW!

The Project The Project’s pre-feasibility study was undertaken by Lahmeyer International and completed in July 2011. Lahmeyer is a leading international energy consultancy currently developing over 23,000 MW around the world. The study assessed the current plant and analyzed possible upstream and downstream sites (100 km in diameter) to determine the optimal locations for expansion. The Existing Plant – Bumbuna The current Bumbuna plant maintains 50 MW of peak power capacity. Initial examination by Lahmayer concluded that the plant is structurally . This fully operational plant is a key strategic part of what makes this project so attractive. GoSL has agreed to contribute Bumbuna into a Joint Venture entity in return for equity ownership in the resultant company. Further analysis must be conducted during the feasibility study to fully assess the plant’s current status and value. The New Project – Yiben II Two sites were considered 30 km north of Bumbuna to create additional power capacity upstream and increase water flow into the existing Bumbuna dam. The two identified sites are called Yiben I and Yiben II. Despite having slightly higher energy potential, Yiben I was ruled out due to high environmental impact (inundation of 7 villages; relocation of 3,500 people). The alternative, Yiben II, was selected since it required minimal loss of homes, roads and other infrastructure and relocated less than 50 people. Yiben II is estimated to generate 129 MW of peak power capacity and also increase the minimum constant power the existing Bumbuna plant produces. CONFIDENTIAL ! The Extension – Bumbuna Extension The increased of water from Yiben II to Bumbuna allows for the expansion of overall generation capacity at Bumbuna. The Bumbuna extension will channel excess water from the current Bumbuna plant through three 70 MW turbines and back into the Seli River. The Bumbuna extension will increase total peak power at Bumbuna from 50 MW to 260 MW. Conclusions The study estimated a total construction period for the entire scheme of four years. The following summarizes the proposed key statistics for the scheme upon completion: Yiben II Bumbuna Extension Total Installed Capacity 129 MW 260 MW 389 MW Firm Power 43 MW 69 MW 112 MW Energy 447 GWh/a 1,025 GWh/a 1,472 GWh/a ! Corporate Social Responsibility Joule Africa is committed to undertaking responsible infrastructure development and holistically engaging with the communities in which it operates. Specific concepts discussed so far with GoSL include: • Establishment of an evergreen social investment fund financed out of a percentage of the Project’s profits to invest in regional micro power and water projects, as well as healthcare and education. • Listing the Project on the local stock exchange to provide an opportunity for direct financial participation by the people of Sierra Leone, as well providing a platform for public transparency. Co-commitment with all contractors to employ, train and develop local Sierra Leoneans and members of the diaspora as part of the development and operation teams. Next Steps Feasibility Study – led by Lahmeyer International, projected to commence in October 2011. Packages encompass design engineering, full environmental and social impact assessments and more detailed hydrological, geological and topographical surveys, including a detailed drilling programme. The total feasibility study is expected to last 12 months, projected for completion by the end of September 2012. Commercial and Legal - led by the third largest global law firm, Clifford Chance, and in-house General Counsel, John Lyon. Due diligence to commence in September 2011 and lead into the other commercial and legal streams, encompassing: a Development Agreement with GoSL, EPC contracts with a construction firm, and PPAs with various commercial and municipal off-takers. The following timeline sets forth each of the major work packages:


2011 2012 2013 2014 2015 2016 2017 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 GoSL Contracts Feasibility Study PPA Negotiations EPC/O&M Contracts Financing Process MIGA Insurance EPC Tender & Mobilisation Funding Construction

Development Legal

Phase II: Feasibility Phase III: Construction ! !

CONFIDENTIAL ! Financing Joule Africa is currently raising two tranches of financing, totaling $25MM USD, to complete the remaining pre- construction development work. In order to incentivize early investment, depending on the timing of the investment the first $5MM tranche may receive a valuation discount to the second $20MM tranche, to be discussed individually with investors. Under the terms of the original Series A investment, the initial $3MM USD is due for repayment with a redemption premium from the proceeds of Series B. However, several Series A investors intend to re-invest some or all of their proceeds in Series B. The gross $25MM funding includes the total repayment of Series A plus premium (circa $5MM), although some or all of this may not be needed. The minimum balance of new funding required is therefore approximately $20MM. Joule Africa’s Series B raise will finance company operations until financial close. During this time, the company aims to:

• Complete the Environmental and Social Impact Assessment • Complete the Yiben II and Bumbuna Extension design • Tender the EPC contract for plant construction • Complete the project development agreement and power purchase agreement with GoSL • Negotiate power purchase agreements with commercial counterparties • Finalise all project financing for plant construction Future Financing: Joule Africa expects the Project cost to equal $625MM USD, of which approximately $440MM would be financed by debt and $185MM by equity (including the contribution of the current Bumbuna asset). Joule Africa expects debt and equity holders to include export credit agencies, development finance institutions, and commercial banks, and expects to close all financing by Q2 2013.


Greg Newman Andrew Cavaghan Managing Partner Managing Partner [email protected] [email protected]

Kevin Clark Mark Green Managing Partner Managing Partner [email protected] [email protected]


This document is intended to provide an overview of the investment opportunity being offered by Joule Africa to selected, known parties. This document is for discussion purposes only and shall not form the basis of a contract. This document does not contain a complete description of the terms and risks associated with the equity financing briefly described herein. The distribution of this document and the financing referred to herein may be restricted by law in certain jurisdictions and persons receiving this announcement or any subsequent offer should inform themselves about and observe any such restriction. This document does not represent an offer to sell or a solicitation of an offer to buy securities or an inducement or invitation to enter into any investment activity. This document is confidential to you and is not to be reproduced or redistributed. While the information contained herein, which has not been independently verified, has been prepared in good faith, no representation or warranty, implied or express, is or will be made and no responsibility or liability is or will be accepted by Desert Lion Partners LLP, Joule Africa or by any of their respective officers, employees or agents in relation to the accuracy or completeness of such information or any other written or oral information made available to any interested party or its advisers and any such liability is expressly disclaimed. Notwithstanding the foregoing, no undertaking is given to provide recipients with access to any additional information or to update this document or any additional information, or to correct inaccuracies in it which may become apparent. The issue of this document shall not be deemed to be any form of commitment on the part of Desert Lion Partners LLP or Joule Africa to proceed with the project or the investment opportunity referred to herein. You should consult your own legal counsel and/or financial advisor with respect to the investment opportunity referred to herein. An investor should be willing and have the financial capacity to purchase a high- risk investment, which cannot easily be liquidated. Investors in the equity financing described herein may lose 100% of any money invested. The summary terms described herein are subject to change. The content of this document has not been approved by an FSA authorised person nor approved or disapproved or recommended by the U.S. Securities and Exchange Commission or any other foreign or state securities authority nor has the SEC or any other authority passed upon the accuracy or adequacy of this document. CONFIDENTIAL