Frontier Energy (FHE) Investor update summary

Project status and financial overview

• Stage one at Waroona is fully funded with AUD 310 million CapEx, all major contracts signed, and revenue generation expected in H1 2028, targeting AUD 62 million annual EBITDA and a six-year payback.

• The site covers 830 hectares, with 132 MW solar and 81.5 MW battery storage in stage one, and significant land available for future expansion.

• Revenue certainty is secured through state reserve capacity payments and federal minimum revenue underwriting, de-risking the project until at least 2042.

• Debt is underwritten by major banks with 65% gearing and 18-year amortization; equity raise of AUD 110 million completed with strong management participation.

• Owners team provides on-site oversight, ensuring quality and governance, with experienced contractors engaged under fixed-price contracts.

Market dynamics and growth opportunities

• Western Australia faces high and rising energy prices due to coal retirements and increasing gas costs, creating strong demand for new generation.

• Over 50% growth in energy generation is needed in the next four years, favoring shovel-ready projects with revenue certainty.

• Data center demand is surging, with global and local trends driving exponential energy needs and new regulatory requirements for self-supplied power.

• The Waroona site is strategically positioned for data center co-location, with grid, water, and fiber connectivity, and has received direct approaches from data center operators.

• Expansion plans include stages two, three, and four at Waroona, plus off-grid opportunities, aiming to build a multi-generational energy portfolio.

Risk management and contracting strategy

• Direct equipment procurement and early contractor involvement have reduced costs and minimized variation risks, locking in prices for major components.

• Fixed-price contracts and hedging cover about AUD 150 million of equipment, with savings of 12%-15% compared to fully wrapped solutions.

• Proximity to the grid connection point reduces infrastructure costs, with only a short underground cable required.

• Reserve capacity payments alone cover annual debt servicing and most O&M, providing strong downside protection.

• Regular oversight and collaboration with contractors aim to ensure smooth transition to future project stages.