Energy Savings Opportunity

• Electricity rates in the Philippines are second

highest in Asia (Singapore is highest)

• 40 – 60% of energy costs at most industrial plants

in Philippines come from electric motors

• 50%+ electricity wasted on motor systems due to:

Inefficient ‘induction motor’ technology

Inefficient Drive systems

Power Anomalies

Lack of maintenance (only ‘fixed when broken’)

2

Motor System Inefficiencies

3

Induction

Motor

Power Anomalies

Drive

System

Energy Efficiency Solutions

• Replace Induction Motors (IM) with Permanent

Magnet Synchronous Motors (PMSM), Super

Premium, or IE4 Efficiency Class.

• Correct Power Anomalies

• Refurbish and recalibrate Drive System

4

Motor Electrical Losses

5

PMSM: Rotor loss & rotor iron loss are eliminated = energy savings

Efficiency is equivalent to IE3 or NEMA Premium

Motor Savings

(7200 operating hours/year)

6

0

20000

40000

60000

80000

100000

120000

140000

160000

Existingpower drawn

RewoundMotor

Rewound +EMDS

Upgrade toHEM

HEM +EMDS

kW

Hrs

kWhr, 45kW

26%41%

61%

Other Technologies

7

Under an Energy Savings

Performance Contract (ESPC)

What is ESPC?

• Develops, finances and implements end-use energy efficiency projects (EEPs) at energy consuming facilities (Hosts) and risks payment for its services on actual savings performance of the EEPs.

9

A performance-based contract with an Energy Services Company (ESCO) that:

ESPC Illustration

E + O&M

E + O&M E + O&M

HOST Profit

ESA Services

FinancingDebt Servicing

HOSTProfit

E+O&MCost Savings

Ho

st C

ash

flo

w

Before During After

ESCO “Turnkey” Services

• Investment Grade Energy Audit (IGA)

• Comprehensive Engineering Design

• Project Financing

• Complete Installation and Commissioning

• Long-term Performance Guarantees

• Savings Measurement &Verification (IPMVP)

• Ongoing Equipment Maintenance

11

Who is Machine HealthCareTM?

• MHC is a local ESCO that implements and funds

new energy-efficient industrial motor systems

under the ESCO Shared Savings model.

• Under Shared Savings, MHC provides 100% of all

upfront capital cost for it to implement the Motor

Systems in exchange for receiving a majority of the

Savings over the specified ESPC term.

Host approves

Project Concept

MHC Develops initial

“Project Concept” Proposal

No Host

Payment

Host signs LOU for MHC to conduct IGA with agreed

“Minimum Criteria” as basis for “IGA Fee”

IGA completed that meets

“Minimum Criteria”

MHC Begins Project Installation

NO

YES

Host signs ESA with MHC

to implement Project per IGA

YES

NO

Host Pays

IGA Fee

No Host

Payment

NO

YES

MHC Project Development Process

YES

MHC MANAGEMENT TEAM

LEONARDO A. DAYON

• President, Machine HealthCare

• Founder, ALPS Maintaineering Services, Inc.

• Professional Electrical Engineer

JESSIE L. TODOC

• Project Manager, Machine HealthCare

• Registered Electrical Engineer

• MBA

14

MHC Principals

Thomas K. Dreessen

• Formed ESCOs in 10 Countries & developed EEPs in 24 Countries

• Financed over $200 million of “savings-based” EEPs including

the first ones in eastern Europe in 1995

• Created SPC “paid-from-savings” structure and debt guarantee

mechanisms for EE financings in Mexico

• Created/conducted EE loan training program Mexican banks

• Past President of US National Association of ESCOs

• Past Board Member & Chairman of International Committee for

the Alliance to Save Energy

• Chairman of Evaluation Efficiency Organization (“EVO”)

• BBA - Accounting; MBA and a Certified Public Accountant

Bruce K. Colburn, Ph.D., P.E.

• 30+ years of experience in energy engineering and

development of EEPs for ESCOs

• Involved in developing over $300 million of EEPs including:

- $ 10 Million project Brazil Aluminum plant

- Design of $12 million ESCO project at Russian Steel Mill

- Implementing a $4 Million ESCO project @ GE Aircraft.

• Former principal for 13 years of Texas Energy Engineers

• Member of U. S. Association of Energy Engineers

• Ph.D. - Electrical Engineering

MHC Principals

MHC Core Strengths

•Management Team with deep experience in local

motor implementation combined with international

ESCO, project finance and industrial EEP expertise

•Unique financial and industrial technical know-how;

•Access to best-in-class international and domestic

technologies that deliver most cost-effective energy

efficieincy solutions;

•Access to cost effective capital for funding EEPs on

a Shared Savings basis.

17

Host Benefits from ESPC

• Positive Cash Flow:

No upfront capital to develop/implement EEP;

Savings payments from current operating costs

• Ownership transferred to Host at end of ESPC Term

• No development or implementation costs or risks

• Savings are Measured & Verified per IPMVP

• Improved competitiveness and “green” footprint