Financing LNG Investments in Energy and Transport Dr. Panayotis Zacharioudakis Managing Director – Ocean Finance Ltd. Round table on Transport and Energy Connections 29 March 2017, Athens

2016 CEF Transport Program New Technologies and Innovation Urban Nodes of the Core Network Decarbonisation of transport, energy efficiency. Projects should be deployed on the core network corridors. Budget: EUR 80 million (General Envelope) & EUR 59.5 million (Cohesion Envelope) Co-Funding rate: 50% for studies with pilot deployment, 20% for works, 85% for Cohesion countries(Studies & Works). Nodes of 9 Core Network Corridors. Directive 2014/94/EU on the deployment of alternative fuels infrastructure. Works , studies and/or deployments of pilot actions. Budget: EUR 40 million (General Envelope) & EUR 20 million (Cohesion Envelope). Co-Funding rate: 20% for works and 50% for studies (General Envelope), 85% for Cohesion Envelope. Motorways of the Sea (MoS) Alternative clean fuels infrastructure (e.g. Scrubbers only for shortsea outside SECA). New maritime links. Budget: EUR 40 million (General Envelope) & EUR 20 million (Cohesion Envelope) Co-Funding rate: 30% for infrastructure works and, 50% for pilot actions, up to 85% for all type of projects in Cohesion countries.

2017 CEF Transport Blending Call (1/2) €1 billion of funding available for PCI projects. Maximizes the leverage of private involvement and capital. Open to all EU Member States. At least one EU Member State for decarbonisation of all transport modes along the TEN-T Core Network Corridors and nodes. Indicative Call Timeline Call opening: 8 February 2017 Deadline for Submission: 14 July 2017 30 November 2017 Evaluation: July to November 2017 December 2017 to March 2018 European Commission Decision on selected projects: January 2018 May 2018 Signature of grant agreements: January 2018 May 2018

2017 CEF Transport Blending Call (2/2) New Technologies and Innovation 2017 Motorways of the sea 2017 (MoS) Only works for the roll-out of the innovative solution, e.g. along and entire corridor. Combination of grant and loan. More flexibility on eligible costs funding. At least a significant part of a Core Network Corridor. Budget: EUR 140 million (General Envelope). Co-Funding rate: 20% of the eligible costs. Development of MoS Links: at least 1 Core Port, 1 Comprehensive Port and 1 Maritime operator on the link concerned. Only WORKS ELIGIBLE - Studies & Pilot Actions not supported under the blending call. Budget: EUR 40 million (General Envelope) Co-Funding rate: 30% for infrastructure works and facilities. Inland waterways and inland ports 2017 Access and connections (connections to waterways, access to inland ports and connections between inland ports). Basic infrastructure. Fixed infrastructure to supply alternative energy . Waterside terminals infrastructure Maximum EU contribution rates: 20% for inland ports & 20% for inland waterways.

2016 CEF Energy Program Aims at ending energy isolation, eliminating energy bottlenecks, and completing of the internal energy market. By the end of 2016, 75 actions for a total amount of EUR 1.2 billion. Implementation of 66 Projects of Common Interest (PCI). 35 in electricity & 31 in gas. Financial support is provided to 51 different beneficiaries from 23 EU Member States and 2 third countries. Studies/works: 50% of eligible costs & up to 75% for actions with a high degree of regional or EU-wide security of supply. 2017 CEF Energy call is planned for later this spring.

60% of the eligible costs for both sectors 2016 CEF Synergy Call First CEF Synergy Call - actions between transport and energy sector (& cyber-security). Overlap TEN – T and TEN – E: TEN – T: entire comprehensive network (emphasis on core transport network corridors). TEN – E: only on location of one of the 195 (Energy) – PCIs. Type of actions: Studies without pilot deployment. Studies with pilot deployment (= real – life trials). One or more Member States. Budget Co-Funding rate EUR 40 million (General Envelope) 60% of the eligible costs for both sectors

European Fund for Strategic Investment (EFSI) Additional investment of at least EUR 315 billion over a three year period. Supports bankable projects. No geographical or sectoral allocation. Provides risk financing instruments via EIB (no grants). EUR 500 billion in additional investments by 2020. EFSI Transport, as of 31 January 2017 34 transport operations approved Triggering > EUR 14 billion in related investment

Green Shipping Financing Tool (GSFT) The GSFT instrument would allow financing of new investments and conversion of existing fleets.

Public Private Partnerships (PPPs) PPPs Benefits Improve delivery of projects Better Value for money from infrastructure Spread the cost of financing over the lifetime of the asset Improve risk sharing and Boost sustainability Common practice for financing transport projects. Public party bears assets ownership. Procurement method for large infrastructure projects. Improve the quality of expenditure and ensure effective use of EU funds. EU funds make PPP projects more affordable for the procuring authority and/or user and improve the bankability of PPP projects.

Ocean Finance has played a major role in the business development of LNG use in energy and transport by, Setting up industrial projects. Analysing the required LNG infrastructure per case. Undertaking extended focused studies in both sectors in order to mature the projects. Facilitating of projects implementation. Providing supportive measures for solutions to the financial obstacles in transport and energy sector. COSTA I - CO2 & Ship transport emissions abatement by LNG Project: LNG Masterplan for Med, Black Sea and Atlantic. COSTA II EAST Global plan for LNG infrastructure development / Poseidon Med Project: Conceptual Studies for East Med. POSEIDON-MED II Global plan for LNG infrastructure development Project: Detailed Studies and works. Proposal CYnergy Establishment of a Natural Gas supply system on the island of Cyprus (Under Evaluation): Studies for Cyprus – Project of Common Interest (PCI): Removing bottlenecks to end island gas isolation.

Recommendations Transport and Energy dedicated budget increase within the context of CEF Synergy. Shipping sector is expected to be a heavy LNG user – more favorable terms are required for increasing investments. Shipping sector investments should be equally treated as roads and rails investments by CEF Transport.

Dr. Panayotis Zacharioudakis Managing Director Ocean Finance Ltd. info@oceanfinance.gr Telephone: 215 5002901