Aurora Grid Renewables — Financial Plan

The basis of preparation, the projected profit and loss, cash flow and balance sheet, the debt, gearing and cover, the returns, exit and sensitivity and the lender covenant dashboard underpinning Aurora Grid.

Section 8 · Business Plan

Financial Plan

8.1 Basis of preparation

Sponsor anchors preserved; below-EBITDA independently
re-derived. Revenue, EBITDA, the R48.5 billion capital
programme and the funding stack are the sponsor’s figures, preserved
exactly. Depreciation (by asset-class life — solar and wind over 25
years, BESS over 12–15, transmission over 30, trading assets over 8),
interest (on the drawn project-finance and green-bond schedules), South
African corporate tax (27% with assessed-loss carry-forward under
section 20, capped at 80% of taxable income), working capital, the
revolving facility, the full three-statement model, DSCR and returns are
independently re-derived. All figures are ZAR. The balance sheet ties to
zero in every projection year.

Where the independent derivation departs from the sponsor
— key findings

Three disclosures matter. First, net profit: the sponsor’s headline
path (R50m in Year 2 rising to R12,900m in Year 10) understates
depreciation and interest; charging both fully, the re-derived path
shows small losses in the Year-2–3 ramp turning positive from Year 4 and
reaching about R10,982m by Year 10 — roughly R1.9bn below the sponsor’s
figure. Second, the balance sheet: the sponsor’s stated Year-10 balance
sheet (R75bn PPE, R92bn total assets, R24bn debt) is not reconcilable
with a R48.5bn capital programme in which debt amortises; the
independently-derived, internally-consistent balance sheet shows about
R48bn of total assets and is presented in Section 8.4. Third, the
returns basis: the sponsor computes its 8.1x equity multiple on a R20bn
equity figure, whereas the full funding stack carries R28.5bn of equity
and quasi-equity; this Plan derives returns on the full equity
committed, a more complete and conservative basis. None of these
undermine the case; EBITDA, the metric that drives infrastructure
valuation, is preserved, and the returns remain strong — but they
correct optimistic lines that a lender would otherwise flag.

Figure 9

Figure 9 — Net profit: sponsor case vs independent derivation

8.2 Projected profit & loss (R m)

R m	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10
Revenue	2,600	6,200	11,000	16,500	23,400	30,200	36,500	42,800
EBITDA	1,050	2,800	5,000	7,600	10,500	13,200	15,800	18,600
EBITDA margin %	40	45	46	46	45	44	43	44
Depreciation	(127)	(303)	(537)	(806)	(1143)	(1475)	(1783)	(2091)
Interest	(953)	(1478)	(1928)	(2250)	(2106)	(1963)	(1714)	(1465)
Profit before tax	(30)	1,019	2,535	4,544	7,251	9,762	12,303	15,044
Taxation	–	(228)	(684)	(1227)	(1958)	(2636)	(3322)	(4062)
Re-derived NPAT	(30)	791	1,850	3,317	5,293	7,126	8,981	10,982
Memo: sponsor NPAT	450	1,250	2,650	4,500	6,700	8,900	10,800	12,900

Net profit turns positive from Year 4 as generation leases up past
the fixed depreciation and interest base; accumulated assessed losses
from the ramp shelter cash tax into the operating phase. The memo line
shows the sponsor’s headline NPAT — consistently above the re-derived
figure by the amount of under-charged D&A and interest.

8.3 Projected cash flow (R m)

R m	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10
EBITDA	1,050	2,800	5,000	7,600	10,500	13,200	15,800	18,600
Tax paid	–	(228)	(684)	(1227)	(1958)	(2636)	(3322)	(4062)
Δ working capital	(140)	(288)	(384)	(440)	(552)	(544)	(504)	(504)
Capex	(7,400)	(6,800)	(6,300)	(5,200)	(4,600)	(3,400)	(3,000)	(1,800)
Debt drawdowns	4,900	4,700	4,000	2,800	–	–	–	–
Equity injections	5,400	4,200	3,400	2,400	1,500	900	600	300
Debt service	(953)	(1478)	(1928)	(3500)	(3356)	(4213)	(3964)	(3715)
Dividends	–	–	–	–	(4,764)	(6,414)	(8,083)	(9,884)
Closing cash	6,086	8,992	12,095	14,528	11,299	8,193	5,720	4,655

Figure 10

Figure 10 — Cash flow profile: investing-heavy build, operating cash overtaking

8.4 Projected balance sheet (R m)

R m	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10
Operational PPE (net)	2,626	6,192	10,814	15,919	22,191	28,024	33,012	37,693
Construction in progress	14,606	17,536	18,678	17,966	15,151	11,242	7,471	2,500
Working capital + cash	6,294	9,488	12,975	15,848	13,171	10,609	8,640	8,079
Total assets	23,525	33,216	42,467	49,734	50,513	49,875	49,124	48,272
Equity	15,025	20,016	25,267	30,984	33,013	34,625	36,124	37,522
Debt (PF + green bond + RCF)	8,500	13,200	17,200	18,750	17,500	15,250	13,000	10,750
Total equity & liabilities	23,525	33,216	42,467	49,734	50,513	49,875	49,124	48,272
Balance check	0	0	0	0	0	0	0	0

Figure 11

Figure 11 — Total asset composition: building the infrastructure base

Figure 12

Figure 12 — Capital structure evolution: de-gearing as assets mature & recycle

8.5 Debt, gearing and cover

A balanced, green-bond-inclusive structure. The
R48.5bn programme is funded roughly 59% equity and quasi-equity and 41%
debt (R15.0bn project finance plus a R5.0bn green bond). Gearing is
moderate at the platform level — individual projects are financed at the
higher non-recourse gearing standard for South African renewables —
keeping consolidated debt well-covered: DSCR is thin only in the
Year-2–3 ramp (0.57x then 0.96x, before meaningful generation is online)
and clears 1.0x by Year 4, rising above 2x from Year 5 and above 3.7x by
Year 10. The green-bond tranche both lowers blended cost and signals the
platform’s ESG credentials.

Figure 13

Figure 13 — Debt-service cover: thin in Years 2–3 ramp, strong thereafter

Figure 14

Figure 14 — Debt balance (project finance + green bonds) and service

8.6 Returns, exit and sensitivity

The returns are strong and, importantly, robust to a
conservative exit. The sponsor assumes a 10x EV/EBITDA
infrastructure exit on Year-10 EBITDA of R18.6bn, implying an enterprise
value of R186bn and, after net debt, equity value of about R180bn — a
31–35% IRR and 8.1x multiple. This Plan’s base case applies a
conservative 8x, reflecting both a South African country-risk discount
and the reality that the platform’s trading- and services-weighted
earnings warrant a discount to a pure contracted-generation multiple: an
enterprise value near R149bn and equity value near R143bn, for an equity
IRR of about 31.6% at a 6.7x multiple on the full R28.5bn equity
committed. At the sponsor’s 10x the equity IRR is about 35.0% (8.2x),
reproducing and validating the sponsor’s stated 31–35%. The critical
point is that the return is strong even on the conservative multiple —
the 10x case is upside, not a requirement.

Figure 15

Figure 15 — Exit valuation: conservative 8x vs sponsor 10x EBITDA

Figure 16

Figure 16 — Investor returns: robust even on a conservative exit multiple

Sensitivity (equity IRR)	Value
Base case — conservative 8x exit	31.6%
Exit multiple 7x	29.6%
Exit multiple 9x	33.4%
Sponsor exit 10x	35.0%
EBITDA −15%	29.1%
EBITDA +10%	33.0%

Figure 17

Figure 17 — Equity IRR sensitivity (base = conservative 8x exit)

The investment conclusion

Even on a conservative 8x exit — a deliberate discount for the
trading and services mix and country risk — the equity IRR is about 32%
at a ~6.7x multiple on the full equity committed, and stays above 29%
across an EBITDA shortfall of 15% or an exit as low as 7x. The
investment does not require the sponsor’s 10x multiple to deliver an
exceptional infrastructure return; the 10x case is upside. What the
returns do require is successful grid access, disciplined delivery of
the generation and storage build, and effective capital recycling. Those
operational and financing variables — not the valuation — are where
diligence and mitigation should concentrate.

8.7 Lender covenant and coverage dashboard

The dashboard consolidates the credit metrics a project- and
platform-level lender would track, drawn from the re-derived
three-statement model. Covenant levels are indicative, consistent with
South African renewable project-finance norms.

Metric	Y4	Y5	Y6	Y7	Y8	Y9	Y10
DSCR (x)	1.55	2.04	1.70	2.38	2.38	3.02	3.78
Interest cover (x)	1.9	2.6	3.4	5.0	6.7	9.2	12.7
Debt / EBITDA (x)	4.7	3.4	2.5	1.7	1.2	0.8	0.6
Debt / (D+E) %	40	41	38	35	31	26	22
Cash balance (R m)	8,992	12,095	14,528	11,299	8,193	5,720	4,655

Covenant (indicative)	Level	First comfortably met
Minimum DSCR	≥ 1.30x	Year 5 (2.04x)
Interest cover	≥ 2.0x	Year 5
Debt / EBITDA	≤ 4.0x (platform)	Year 5
Debt-service reserve	6 months	Funded at each close
Distribution lock-up	DSCR < 1.30x	Blocks dividends through ramp

The dashboard makes the credit story explicit: cover is thin only
through the Year-2–4 ramp — the window the debt-service reserve and
distribution lock-up are designed to bridge — after which every metric
strengthens materially as generation stabilises and debt amortises. The
distribution lock-up ensures no equity is released until cover is
comfortably above covenant, protecting lenders through the build.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Aurora Grid Renewables Holdings (Pty) Ltd.