Executive Summary

New Energy
Industrial Development Opportunities
United States industrial manufacturing is the largest energy-consuming sector of the economy,
consuming over 33% of the nation’s total energy in the fewest locations.

Our company, Energy Pro-USA, has a proven methodology to aggregate, develop, finance and
own energy and productivity improvement projects inside large industrial manufacturing plants.
These targeted industry sectors are steel, aluminum, refining, chemical and paper industries.
These sectors are defined as energy intensive processes and account for over 75% of industrial
energy consumption.

Energy Pro will make a $145 million investment into this market opportunity over the first and
second quarters of 2009.

Industrial Manufacturing’s Energy Profile

Natural gas, petroleum products and electricity comprise the major energy sources used to heat
and power industrial manufacturing facilities. The industry’s expenditures for heat and power
totaled over $80 billion last year. In addition to heat and power, the industry used about seven
quads of fossil fuels as feedstock to produce industrial materials and products. Usage, combined
with dramatic price increases, forebodes a negative impact on profitability. The target markets
for Energy-Pro are manufacturers in the energy intensive processes. These manufacturing sectors
consume the largest amounts of energy per unit of production/product output.

The State of Industrial Infrastructure and the Current Pressures Facing Energy Intensive Industries

Since the onset of the nine-year economic boon beginning in 1990, more discretionary capital has
gone to investments in new technology as compared to investments in “old-line” North American
industrial infrastructure; specifically refining, chemicals, steel, aluminum, and forest products.
This diversion of capital away from industrial infrastructure has restricted the industrial’s ability
to grow and remain competitive. The result is reduced operating budgets, reduced personnel and
reduced capital budgets necessary to implement improvements and maintain profitability.

Because these “old-line” industrial plants are part of the infrastructure North America relies upon
for countless products and jobs, these plants will not be shut down. While ownership may
change, the important fact is these plants will continue operating as part of our industrial
landscape and these plants will continue to need access to capital. Unfortunately, because of
decreased value, or the credit history of parent companies, many industrial plants will not be able
to acquire capital through traditional lending institutions without restrictive guarantees or liens on
other assets. For most of the industrial plants, these constraints make the capital for
energy/productivity improvements temporarily out of reach. Today, industrial plants need easier
access to capital to remain competitive.
Competitive Approaches

Unlike other sectors, the specific industrial process always determines energy demand. This is
where all competitors fail in their approach to energy intensive manufacturers. Traditional energy
services companies (ESCOs), utilities and others have been unsuccessful at developing and
managing energy opportunities for large industrials. ESCOs focus on replacing lights and HVAC
equipment in commercial properties. This commercial property approach doesn’t transfer to the
needs of energy intensive industrials because every industrial is unique. For example, the
aluminum industry uses large amounts of electricity for smelting while the glass industry uses
large amounts of natural gas to melt silica in furnaces. These inherent industry variations make a
one-size-fits-all approach to energy efficiency – the ESCO approach to commercial property –
ineffective.

With respect to utility companies, their focus on equipment solutions is simplistic and never
achieves measurable financial returns because of the complex nature of processes upstream and
downstream of the installed equipment.

Therefore, to manage energy inside energy intensive industrials, the main driver is controlling the
industrial process – the amount of energy per unit of production.

A New Approach Has a Two-Fold Payback.

Private investment into this opportunity creates increased cash flow from the new improvements
inside the manufacturing facility. However, the increased cash flow is generated not only from
energy efficiency improvements but a corresponding improvement in productivity. Inside energy
intensive industrials, productivity drives energy efficiency and energy efficiency drives
productivity. Consequently, with a properly designed financial infrastructure, improvements
inside energy intensive industrials can be measured and ensures a two-fold payback to investors:
One payback from energy conservation and another payback from productivity/yield
improvements, environmental benefits and associated credits. The energy market for industrials is
an $80 billion industry with the energy intensive industries consuming 85% of those dollars. The
productivity market as related to these industries, the second payback opportunity, is a $742
billion business.

The AIP Value Proposition

Within the refining, chemical, steel, aluminum and forest products industries, many systems and
operational improvements to maximize productivity and energy efficiency are not implemented.
There are more one-year to four-year payback projects than the capital markets can accommodate
via current financing protocols. What energy intensive industries require are: i) independent
entities to provide capital, management, systems integration and development resources; entities
with a history of developing capital projects with quick paybacks, and ii) a financial infrastructure
willing to provide capital based upon increased cash flow from the improvements.
Energy Pro-USA has underwritten a new financing model that provides this “new” type
of capital and financial infrastructure targeted at the most energy intensive consumers in
America…Manufacturing.

Energy Pro is the premiere Advantaged Industrial Producer (AIP), our company develops,
manages, finances and owns the improvements for a shared ownership right to the resulting cash
flow. Focused upon heavy industrial facilities (the largest energy consumers in the fewest
locations) Energy Pro not only saves energy, reduces emissions and implements other
environmental improvements, but also increases productivity/yield – the largest critical factor in
the plant’s energy consumption. Energy Pro has a proven record of successes inside industrial
manufacturing plants. Many more industrials would implement AIP improvements but lack the
management system, measurement modeling, and “new” financing tools to avoid securing loans
with cumbersome corporate guarantees; they also need engineering and management personnel to
analyze and implement improvements. Energy Pro-USA provides these needed resources to
industry thereby improving energy conservation and enhancing productivity improvements inside
large industrial facilities.

For more information visit our website at energyprousa.com.

Click on our presentations and access our operational and financial presentations.

Contact Michael Ratteree, Managing Director, directly at 314-303-5645

BENEFITS SUMMARY
Advantaged Industrial Producer SM – Our ability to aggregate resources and our commitment to
collaboration, cuts costs and increases innovation beyond what can be achieved in a single
transactional supplier relationship.

Capital – Energy Pro funds all analysis, staffing and implementation of energy/productivity
projects. This results in bringing optimization on line quicker with zero out of pocket costs for
our client partner. Our methodology lets you achieve an infinite Internal Rate of Return (IRR).

Resources – We staff our projects in order to free your time and personnel to focus on core
productivity. Having our project team on-site daily, over the course of our three-year contract,
allows us to deliver daily management reports and creates immediate response capability to
variances in the energy management system.

Measurement – Energy Pro provides a proprietary and quantifiable Energy Management System.
Our Enterprise Optimization Model (EOM) measures for management and for dollarized values.
The EOM can delineate existing initiatives and measure major equipment process across the
enterprise. Models are extremely accurate (plus or minus 1% per year) and are approved by our
client partner before implementation.

Savings – Operationally, actual savings as measured by the EOM are split 50/50 over the three-
year contract. Energy Pro reimburses itself for implementation costs out of its share of the
savings. After 36 months, our client partner owns all improvements and receives 100% of the
savings. Shared savings on capital projects are also measured by the EOM and negotiated on a
contract-by-contract basis.

Project Narrative: The evolution of a typical client/Energy Pro collaboration.

• Client corporate and operations consensus that Energy Pro’s business model should be
piloted in a plant with $25,000,000 plus in yearly energy spend and a list of viable capital
improvement projects.

• An approximate 90-day analysis period at the selected plant to assimilate into the client’s
culture, mutually earmark opportunities, and build predictive modeling based on up to
three years of operational data.

• An approximate 90-day benchmark period where the models are tested, adjusted, and
approved; program implementation is initiated.

• A 36-month operations contract where savings are measured as the difference between
predicted energy demand and actual energy demand.

• Our Industrial Development Fund will financially design comprehensive capital project
recommendations for asset renewal to be evaluated/recommended during 90-day analysis
period.
 The Energy Pro “Enterprise Optimization Model”
Energy Pro-USA (EP) works with industrial companies to help reduce energy usage and associated costs. In
return for EP’s services, clients pay EP a percentage of their cost savings over a three-year period. To quantify
the amount of the energy savings (and to calculate EP's bill to the client), EP creates a model of the energy
usage at the facility based on facility-specific data. This model is called the Enterprise Optimization Model
(EOM) and is based on the statistical analysis of as many as 150 variables collected over approximately three
years using professional engineering and operational judgment. After EP creates an EOM for a facility that is
agreed to by the client company, EP develops Energy Savings Initiatives (ESIs) to reduce energy use at the
facility. Typical ESIs include installation of energy efficient equipment, changes to production methods and
changes to production schedules. After implementation of ESIs, the EOM is used to estimate the quantity of
energy that would have been used at the facility without implementation of the ESIs. The actual energy use is
then subtracted from the predicted energy use to calculate the energy savings.

EOM development begins with the preparation of input/output block diagrams and process flow charts
describing operations at the facility. EP personnel then collect information regarding the facility's individual
unit processes. Examples of unit processes include furnaces, mills, grinders, heat exchangers, boilers, and
waste treatment systems. After the facility's unit processes are evaluated, EP has a process to systematically
identify all of the special or assignable causes of variability in energy consumption (e.g., energy use will
generally increase when production rate increases). Three types of independent variables (i.e., production
values, weather, and time) are identified during this process.

Even at the initial model development stage, some variables may be eliminated from consideration as model
variables if they would be directly affected by energy savings. For example, if the number of furnaces in
operation is correlated with energy usage, it might be a good model variable. However, if EP believes it may
want to make a change to the number of furnaces in operation to reduce energy use, that variable would not be
appropriate for use in the model, as it would not give a true picture of the energy savings resulting from that
improvement.

In all cases, the accuracy of the model is checked by testing its ability to predict the energy use for the historical
data set. EP calculates the accuracy of the model by computing the percent deviation between the actual and
predicted energy use on a daily, monthly, and yearly basis. If the monthly deviation is more than ± 5 %, or if the
yearly deviation is more than ±1 %, the model is rejected. Additional statistical parameters such as the R2 term
are also used to evaluate the effectiveness of the model. If the model is rejected, one or more additional
independent variables for the unit process are identified and added to the model and the new model is retested.
This refinement of the model is repeated until the model meets the predictive accuracy tests described above.
Once the model is refined using the tests described above, in most cases EP states that the predictive ability of the
model is further checked by testing its ability to predict energy use over an independent validation data set.

Validation data consists of sets of data beyond that included in the building of the model. The ability of the
model to make acceptably accurate predictions over such an independent data set increases confidence that the
model captures the fundamental elements of the process it is intended to represent, and can thus be applied to
accurately estimate energy savings resulting from process improvements.
THE CASE FOR ENERGY THE NEED FOR
EFFICIENCY INVESTMENTS THIRD-PARTY CAPITAL
t Energy productivity can help world t Industrial sectors need an investment
in achieving 50% of greenhouse gas of $83B in annual investments to
INDUSTRIAL
emission reduction targets capture energy efficiency
ENERGY
t Many high-return investments are EFFICIENCY t Many energy productivity actions
possible with current technology- + CAPITAL require skills, systems, and
minimum is 17% IRR PRODUCTIVITY resources…with global scope

t Industrial sectors represent ~40% of t Incentives for electric utilities to

opportunity for energy productivity, with realize benefits from-and therefore
high return opportunities (e.g. 30%+ IRR to invest in- energy efficiency are not
in steel and pulp/paper) widely in place

Industrial Global Fund, LLC

Prioritizing sectors: steel, pulp/paper, aluminum, chemicals, refining
Cash on hand and available: Industrial GlobalFund, LLC
Proven capabilities: methodology, trained staff, modeling, contract forms,
systems established
Proven equity-like returns for customers and investors
Source: McKinsey Global Institute Analysis