A Global Opportunity: WindStream's 2014 Roadmap

A Global Opportunity: WindStream's 2014 Roadmap 
NORTH VERNON, IN  -- (Marketwired) -- 03/31/14 --  WindStream
Technologies (OTCQB: WSTI) 
Topics Covered: 


 
--  Jamaica and Caribbean development
--  India strategy and manufacturing
--  Saudi Arabia and our strategic partner
--  Africa -- lighting the continent
--  Latin America's rural electrification goals
--  United States Military Net Zero objectives
--  Global manufacturing goals
--  Future product developments

 
WindStream Technologies (WTI) is looking forward to 2014, a year of
growth for the Company and its products. The Company has established
very good relationships with its distributors and customers and has
identified significant volume projects all over the world, which are
in various stages ranging from pilot programs to full-fledged
rollouts. In building its near-term business opportunities, WTI has
focused primarily on two markets: where energy is expensive and where
energy is inconsistent or non-existent. More than 1.7 billion(1)
people in the world live without a connection to a power grid.
Developing economies worldwide are desperately trying to connect
these "un-connected" citizens through a variety of programs for rural
electrification. Energy rates are escalating all over the world with
very little relief in sight. While the U.S. may be benefitting from
the boom in natural gas exploration, this new source of energy is not
rippling through to countries that lack access to this finite fossil
fuel resource. These two vast markets have taken the Company's
products all over the world.  
In order to meet the growing demand for its products the Company has
begun diversifying its manufacturing capabilities by establishing
capacity in territories that could generate large-volume sales. The
following pages will define these sales and distribution channels and
the Company's strategy for expanding its operations worldwide. 
Jamaica and the Caribbean:
WindStream started off the year with a large purchase order from
Jamaica Public Service (JPS), the billion dollar national utility of
Jamaica. This contract calls for $14.5 million of products to begin
delivery in Q1 of 2014. With energy rates at greater than $0.43 per
kWh, compared to a U.S. average rate as published by the U.S. Energy
Information Administration of $0.12 per kWh, the SolarMill product
line offers a very compelling solution to customers of JPS.
SolarMills offset the cost of energy with renewables while reducing
the demand on the JPS generation and distribution infrastructure. JPS
now offers the WTI products to its customers as a direct sale through
its chain of eStores as well as advertising the products on national
television. JPS offers direct sales to its customers through its
retail outlets and it is also developing potentially attractive
financing solutions that can be added to a customer's electric bill,
easing the initial cost of ownership and potentially further driving
sales. A sample of the JPS marketing efforts can be found at the
following links:  
No More Fuel Charges: http://www.youtube.com/watch?v=82lJqkfYwuo 
Easy to Own a SolarMill from the eStore:
http://www.youtube.com/watch?v=8cX0KvVKErI 
Take Control of High Fuel Costs with Energy Solutions from the
eStore: http://www.youtube.com/watch?v=2AmQa0c2dK4 
Why Choose a SolarMill: http://www.youtube.com/watch?v=GDva4eTWeh8 
In addition to marketing to the residential customer, JPS has also
begun marketing the SolarMill products as a B2B solution throughout
the country. Large installations are being sold by the Company
ranging from 10kW to 300kW. 
But why is JPS selling renewable energy products to its customers,
potentially cannibalizing its own business model? 
As discussed with senior management, JPS is looking to the future and
assessing how best to reduce the cost of energy. The island of
Jamaica must import almost all of its fuel for energy generation, and
the costs of fuel and transportation continue to rise. To meet
growing demand, JPS will need to diversify its fuel sources as well
as building newer, more efficient generating units. As Jamaica enjoys
abundant sunshine and wind, renewable energy generation provides a
strategic advantage. Moreover, the government also has a policy to
grow the renewable energy portfolio significantly in its 2030 vision
statement. At $0.43 per kWh and rising, energy costs in general and
electricity in particular command a disproportionate share of the
household and operational budgets. The sale and distribution of a
"point of use" renewable energy solution such as the SolarMill allows
JPS to provide its customers with an economical way of reducing
energy costs while providing a new revenue stream for the Company. 
In addition to these sales, there is a plan under consideration that
could potentially expand the sale of products to the Jamaican
consumers of energy. This plan is a leasing/power purchase model much
like that offered in the United States by traditional solar
companies. If implemented, the customer would install a SolarMill
system on his or her rooftop and pay a reduced rate for energy
produced onsite for a seven-year period. After that time frame, the
customer may purchase the equipment from JPS and continue benefiting
from the generation of clean renewable energy for the duration of the
product's effective life, estimated at greater than 20 years. JPS
generates revenues on the financing of the products over time, on the
sale of energy, and on the buyout, and it reduces its generation need
for current customers. This allows the utility to move its
traditionally-generated power to other areas of the country where it
is needed. If this plan is finalized, JPS has indicated the rollout
may potentially be greater than 20MW per year for four years. If we
are successful in executing this contract and are able to secure the
needed capital to fulfill this large order, at current rates, this
could potentially result in greater than $120 million of revenue to
WindStream. 
Not only did JPS decide to become the distributor of WTI's products
in Jamaica, but due to the overwhelming response to the products, JPS
asked for and was granted the exclusive right to distribute
SolarMills throughout the Caribbean. Using the access and credibility
of the Caribbean's largest utility company as a springboard, WTI and
JPS are currently moving forward in order to replicate the business
models defined above in other countries that have the same high cost
of energy and need to develop alternative sources. 
India 
With a land mass one-third that of the United States, but a
population three times greater, India offers a potentially massive
market for WindStream and its products. Additionally, the Indian
market is energy challenged, making a low-cost efficient solution
such as the SolarMill even more attractive. It is estimated that 30%
or 400 million of the country's population do not have access to
grid-supplied power and those who do experience regular blackouts or
limited access to energy throughout the day.(2) 
The Indian government has mandated that manufacturers that derive
their power from fossil fuels must offset 5% of that energy use with
renewable sources.(3) 
This mandate has led to a rush by manufacturers to find
cost-effective solutions to the government initiative. WTI has
recently completed a successful pilot in India for ACC Limited. As
one of the largest cement manufacturers in South Asia, with revenues
greater than $1 billion, ACC tested the Company's products at its
facility in Thondebavi in early 2013
 and concluded that the SolarMill
was a cost-effective way of meeting its fossil fuel offset
requirement. This pilot led to a commitment from ACC to deploy 3MW of
products across its twelve plants. The deployment of these products
is slated to begin in Q2 of 2014. ACC, one of the most prominent
companies in India, is highly regarded as a thought leader in the
field of sustainability and sustainable business practices, and as
such, we believe this project will be the model that other
manufacturers, subject to the same fossil fuel mandate, may follow
throughout India. WTI expects to maximize this success with a
marketing campaign that will further drive sales of its products to
other manufacturers that must meet the same challenges that the
government has imposed. 
WTI is currently working on another material project in India with
Bharat Broadband Network Limited (BBNL).(4) BBNL has been charged by
the Indian Government to establish a network of connectivity to
250,000 villages and communities throughout India. This $4 billion
project is now at the pilot stage and 250 test sites are being
established. From these pilots, BBNL will have a clear understanding
of which products should be deployed in order to meet the goals of
this ambitious effort.(5) 
These deployments are typically in rural areas of the country where
energy is scarce or non-existent. If our BBNL pilot is successful, it
is in these remote locations that BBNL could recommend the use of the
WTI products. The energy generated would be used as the means of
charging the batteries that will ultimately provide the power to run
the internet-networked devices that make up the BBNL connected
vision. WindStream currently is slated to be a part of these early
trials to begin in Q2 of 2014.  
The fisheries/aquaculture industry in India is also an area of focus
for WTI and potentially represents a material market for the
Company's products. Ponds and tanks are the prime resources for
freshwater aquaculture in India. Aquaculture in India is an $11
billion industry that has a critical need for reliable power. Fishery
farmers must keep their farms and ponds aerated with a constant flow
of water or their product dies. These farms are located throughout
8,118 kilometers of marine coastline of India and many are in remote
locations. While many of these huge establishments are connected to
the grid, often they are provided only eight hours of energy or less
per day. During the hours when electricity is not available, farmers
must rely on diesel generators to keep their inventory alive. Diesel
generators, as a backup source for power, are very expensive to own
and operate and are a very dirty source of energy. WTI is in
discussions with farmers to provide them with clean energy solutions
to power the equipment required to keep their product alive and
healthy.  
We believe supplementing this energy need with SolarMills will be a
win-win for the farmer and WTI. Initial discussions with this sector
have taken place and are continuing toward possible contracts.  
The Indian Government has launched many initiatives for rural
electrification which lead to the "public good" and "quality of life"
improvements that are being carried out by national and regional
governments all over the country. With 400 million people living off
grid and another 300 million with sporadic power at best, there is a
national effort to bring affordable energy solutions to the people of
India. In order to participate in these immense projects, WTI will
have to obtain certification by these appropriate technical agencies.
WindStream is in the process of acquiring these certifications from
the Ministry of New and Renewable Energy (MNRE)(6) and the Center for
Wind Energy Technologies (CWET)(7). The Company expects to have the
required certifications by Q2 of 2014. Once certified, the SolarMill
and its associated products will be eligible to be included as an
authorized product for use within any government-promoted
initiatives. Additionally, customers of the products will be eligible
for the government incentives offered for the use of renewable energy
products. 
Saudi Arabia
WindStream is proud to announce that it has recently established a
distribution agreement with Riyadh Renewables (RR), a new company
formed to bring renewable energy to Saudi Arabia and the Gulf
Cooperation Council (GCC) countries: Bahrain, Kuwait, Oman, Qatar,
Saudi Arabia, and the United Arab Emirates.  
The partnership with Riyadh Renewables holds great potential for WTI
as fossil fuel producing nations throughout the GCC migrate to the
use of renewable energy. 
Riyadh Renewables is not only the exclusive distributor of the WTI
products for the GCC, but it is also an equity partner of WindStream.
Riyadh Renewables is owned by a member of the royal family of Saudi
Arabia and as such is extending its influence and credibility in
securing projects throughout the region.  
We are honored to have a partner of this stature working with WTI
throughout the region. 
Riyadh Renewables will market and sell WTI's products that will
include B2B sales and government contracts in Saudi Arabia and
neighboring countries.  
Projects being contemplated range in scope from rural electrification
and urban deployments to street lighting and more. Countries
throughout the region are experiencing explosive growth and as a
result the demand for energy is rising. This growth is driving
governments towards the use of renewable energy rather than relying
on fossil fuels. In Saudi Arabia, the King Abdullah Centre for Atomic
and Renewable Energy (KACARE) has mandated that by 2032 renewable
energy generation in Saudi Arabia will meet or exceed 16 GW from
Solar PV to provide approximately 28 to 35 TWh/yr and 9 GW from wind
power.(8) 
This mandate and the new partnership with Riyadh Renewables creates a
substantial opportunity for our Company in the GCC. 
GCC Opportunity Defined 
Riyadh Renewables, WindStream's exclusive distributor for the GCC,
will be making sales efforts in this ever expanding territory. 
The data below indicates that the GCC is fully committed to the
deployment of renewable energy and Riyadh Renewables is well
positioned to help meet this growing demand. 
According to a July 2013 report from the International Renewable
Energy Agency, Middle East investment in renewable energy projects
rose 40% in 2013 to $2.9B, and could reach as much as $13B within the
next few years. Energy consumption per capita in GCC countries is
expected to rise at an annual rate of 2.5% through 2035 with the
largest energy consumption in the area of residential use.(9) 
Kuwait is currently aiming to get at least 15% of its energy needs
met via renewable energy sources by the year 2030 -- with the
country's aim being to eventually move away from its dependency on
oil. Not a surprising goal, nor one unique for the region -- Saudi
Arabia, Qatar, Oman, Bahrain, and the UAE have all made their
renewable energy goals publicly known.(10) 
Of the six GCC countries, Saudi Arabia leads the group with the most
expansive plan to increase generating capacity from 55 GW to 120 GW
by 2020 and further increases planned by 2032. Renewable energy
comprises 55 GW of the planned 2020 capacity with 41 GW allocated for
solar. (11) 
In the United Arab Emirates, investment in renewable energy
technologies is primarily dr
iven through the Masdar initiative, a
company focused on developing sustainable and renewable energy in Abu
Dhabi. The Abu Dhabi Government committed to a 7% goal of renewable
energy by 2020 while Dubai has set a goal of 6% solar generation by
2030.(12) 
Qatar, a country relying almost solely on natural gas, is the highest
per capita greenhouse gas emitter in the world. The country has set a
goal of 200 MW of generation from solar by 2020.(13) 
In 2013, the Bahraini Cabinet approved a plan to establish a center
for renewable energy and energy efficiency. Further to their progress
and planning, their first 5 MW solar project was commissioned at the
end of 2013 and another project is in the works.(14) 
Oman has a nascent renewable energy sector, with several projects
making progress in 2013. In its 2012 Annual Report, Oman's Rural
Areas Electricity Company detailed five renewable electricity
projects of which three are solar and two are wind. The combined
capacity of the five projects is over 6 megawatts, but none of the
proposed facilities are ready to begin operations.(15) 
Africa
The entire continent of Africa needs power. Regardless of the
location, there is a lack of available, stable, grid-supplied energy.
This material need has resulted in a keen focus by WTI on how to
establish relationships and distribution channels to begin providing
its products to this vast market.  
The Obama Administration has also recognized the need for providing
power to the continent and has established the "Power Africa"
initiative, a $7 billion effort to bring energy to the continent.
According to the Power Africa website:  
Two out of three sub-Saharan Africans or 600 million people, lack
access to electricity, forcing them to spend significant amounts of
their income on costly and unhealthy forms of energy like diesel to
run factory generators and smoky and scarce wood for indoor fires for
cooking... Power Africa will start by working with African
governments, the private sector, and other partners such as the World
Bank and African Development Bank in six focus countries -- Ethiopia,
Ghana, Kenya, Liberia, Nigeria and Tanzania -- to add more than
10,000 megawatts (MW) of clean, efficient electricity generation
capacity. By expanding mini-grid and off-grid solutions and building
out power generation, transmission, and distribution structures,
Power Africa will make electricity access available for 20 million
people and commercial entities. At the same time, Power Africa will
enhance energy resource management capabilities, allowing partner
countries to meet their critical energy needs and achieve
sustainable, long-term energy security.(16) 
WTI has worked to establish relationships and is now in the process
of setting up its first trials in Kenya, Nigeria, Ghana, and Liberia
with additional countries signing up for pilot projects. The Company
believes it will see growth in these markets if the pilot projects
are successful. Coupled with its partners in Africa, WindStream
intends to access the needed capital for deployments from governments
and local partners and from the funds available through the USAID and
Power Africa initiatives.  
Latin America
WindStream has completed the formation of a Latin American
wholly-owned subsidiary, WindStream Technologies Latin America (WTI
LatAM), which is designed to service the countries in Central and
South America. The company was set up in Lima, Peru, with the intent
of establishing not only a general Latin American presence, but a
specific Peruvian one that can bid on government projects for rural
electrification. 
The first project that WindStream is responding to is "Osinergmin."
This $620 million RFP divides Peru up into three regions, North,
Central, and South. Companies are asked to respond to the RFP in the
territories where they are interested in participating. WTI LatAm
became an officially registered participant in the bid process and
will be applying for contracts in the North and South, excluding the
Central region as it contains predominantly jungle areas free of wind
and solar irradiance. The RFP applications are due in Q2 of 2014, and
the contracts will be awarded sometime in Q3 of 2014. WindStream has
partnered with prominent Peruvian businessmen and legal teams in the
country with hopes of winning a material portion of the project as a
provider of a hybrid solution bidding on the project.  
In addition, WTI anticipates entering into a Memorandum of
Understanding with the finance arm of the Peruvian Government,
COFIDE(17), to help it promote its clean energy products to
municipalities, local governments and entities looking to deploy
low-cost renewable energy solutions. If successful, this strategic
partnership will allow customers of WTI LatAM to finance the purchase
of products using any number of the COFIDE financial vehicles
available. 
WTI has investigated other countries in Latin America that can avail
themselves of the Company's products. Distribution agreements are
being sought in Brazil, Argentina, Panama, Costa Rica, Columbia, and
Bolivia. These potential new relationships for WindStream will take
time to be fully vetted before any sales channels can be opened up
and any revenue generation can begin. 
United States Military
In 2014, the United States military will continue its efforts to
drastically improve its environmental impact in regards to water,
waste and most notably energy. The Army is pursuing a goal of a "Net
Zero" carbon emission policy by 2020 through a program that was
initiated in 2011.(18) 
In Q2 of 2014, the SolarMill will become part of the landscape at the
U.S. National Guard facility in Sea Girt, New Jersey. Once
construction of new roofs are completed on buildings damaged during
hurricane Sandy, pilot SolarMills will be delivered, installed, and
monitored with the goal of a wider deployment throughout the campus
later in the year. Conversations are ongoing with other National
Guard bases interested in utilizing our technology as well. 
WindStream Technologies has made further inroads in positioning the
SolarMill products and is working to provide its technology to bases
across the country to assist in the Department of Defense's efforts
to achieve the Net Zero mandate. Meetings are being set up now at key
Army bases on both coasts that are motivated and have significant
budgets for renewable energy solutions.  
Manufacturing
The worldwide nature of WindStream's opportunities creates complexity
and challenges. The SolarMill products are currently manufactured in
North Vernon, Indiana in a 50,000 square foot facility and are
shipped to customers all over the globe. The added costs of shipping,
import taxes and tariffs, time on the water, and the variable nature
of foreign currency all contribute to the difficulty of selling the
products globally. In order to avoid some of these problems,
WindStream plans to establish assembly/manufacturing facilities in
territories where the Company feels significant sales volume are
possible. We believe the benefits of local manufacturing outweigh the
challenges and logistical concerns.  
We are currently planning to establish our first facility in
Hyderabad, India, with WTI's partner, HBL Power Systems.(19) HBL will
potentially be WTI's contract manufacturer for all products sold in
India and the Company is anticipating its first SolarMills to come
off the line in Q2 of 2014. If this is achieved, we believe the
products built in India will benefit from the reduced cost of
logistics, labor, and the dollar-to-rupee conversion as well as being
eligible for the government incentives that are currently being
offered. 
Riyadh Renewables plans to develop an assembly and manufacturing
facility to service the GCC market. This facility will begin as an
assembly plant, with components delivered out of the North Vernon
factory. As volumes increase throughout the GCC, we believe that more
manufacturing responsibility will be given to the Saudi Arabia
facility. 
WTI intends to establish a manufactu
ring facility in order to service
Latin America. Countries and or locations are under consideration.  
We anticipate that the terms and business points of all of these
facilities are similar for each territory: WindStream has or will
establish a Joint Venture with a local parent and offer its IP and
know-how for the Company's stake in the JV to be controlled by WTI.
This arrangement allows the Company to book the revenue from sales
and maintain the quality of the products being produced.  
Future Products
Communications towers in emerging markets suffer from a similar
problem: many rely on energy that is inconsistent, unreliable,
expensive, and in many cases, diesel-power generated. According to
Scientific American, there are about 5,000,000 cell phone towers
worldwide, 640,000 of which are not connected to an electrical grid
and largely run on diesel power. WindStream is developing what we
believe is a unique technology, a derivative of its SolarMill
products, which harnesses the power of the available renewable
resources and uses that energy to power these communication towers. 
By taking the efficient and affordable design of the SolarMill
technology and installing the turbine component of the product along
the side of the communications tower, the electronic components can
then be powered from clean renewable energy. This new product line,
the "TowerMill," is slated to be deployed in trials in off-grid
settings in the Middle East and India in Q2 / Q3 of 2014. We believe
that these early-phase trials will prove the efficiency of the
product and the ultimate cost savings to the owner and/or operator of
the tower and its supporting electronics. 
As more and more cellular technology is deployed in rural parts of
the world, there will be an increased need to construct and install
these types of communication towers. In India alone, there are
greater than 350,000 such towers that are completely off-grid and
require regular fuel runs and scheduled maintenance to keep the
diesel generators operational and the towers with a 100% up-time.  
The government of India has recently mandated that 50% of towers in
rural areas be supplied by renewable hybrid generation sources.(20)
The TowerMill, being a hybrid solution, will naturally fit this
requirement and thereby create a potentially massive opportunity for
the Company. 
As a newly listed public company, 2014 expects to be an exciting year
for WindStream Technologies (WSTI) and its shareholders. The Company
has identified its distribution partners and channel opportunities
and has a clearly defined path for growth and new product
development.  
We look forward to making 2014 a success for all! 
Sincerely,
Dan Bates
President & CEO
WindStream Technologies, Inc. 
Forward-Looking Statements
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995: Certain statements in this press release constitute
forward-looking statements for purposes of the safe harbor provisions
under The Private Securities Litigation Reform Act of 1995. We have
based these forward-looking statements largely on our current
expectations and projections about future events and financial trends
that we believe may affect our financial condition, results of
operations, business strategy and financial needs but they involve
risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements, such as
business and political conditions in the geographic areas in which we
sell our products; weather and natural disasters; changing
interpretations of generally accepted accounting principles; outcomes
of government reviews; inquiries and investigations and related
litigation; continued compliance with government regulations;
legislation or regulatory environments, requirements or changes
adversely affecting the businesses in which we are engaged.  
The information set forth herein should be read in light of such
risks. You are urged to consider these factors carefully in
evaluating the forward-looking statements herein and are cautioned
not to place undue reliance on such forward-looking statements, which
are qualified in their entirety by this cautionary statement. The
forward-looking statements made herein speak only as of the date of
this press release and the Company undertakes no duty to update any
forward-looking statement to conform the statement to actual results
or changes in the Company's expectations.  
(1) http://www.modernghana.com/news/164812/1/17bn-people-live-in-dark
ness.html 
(2) http://phys.org/news/2013-11-rural-india-electricity.html 
(3)
http://mnre.gov.in/information/renewable-energy-regulatory-framework 
(4) http://www.bbnl.nic.in/content/ 
(5) http://articles.economictimes.indiatimes.com/2013-07-31/news/4091
5892_1_gigabit-passive-optical-network-foreign-vendors-gpon 
(6) http://www.mnre.gov.in/ 
(7) http://www.cwet.tn.nic.in/ 
(8) http://www.windpowermonthly.com/article/1173394/analysis---financ
ing-saudi-arabias-wind-energy-plan 
(9) http://www.deloitte.com/assets/Dcom-MiddleEast/Local%20Assets/Doc
uments/Industries/Energy%20&%20resources/E&R%20whitepapers/me_er_whit
epaper4_energy_efficiency.pdf 
(10) http://cleantechnica.com/2013/09/26/280-mw-solar-thermal-power-p
lant-built-kuwait-contract-signed-3-27-billion-dollar-project-al-abda
liya/#GUsJDt4zShDD6J6P.99 
11 http://www.eia.gov/countries/country-data.cfm?fips=sa 
(12) http://www.masdar.ae/en/masdar/detail/united-arab-emirates-leadi
ng-the-renewable-energy-charge 
(13) http://dohanews.co/qatar-to-boost-renewable-energy-with-reservoi
r-rooftop-solar-panels/ 
(14) http://www.oxfordbusinessgroup.com/economic_updates/bahrain%E2%8
0%99s-renewable-energy-plans 
(15) http://www.eia.gov/countries/cab.cfm?fips=MU 
(16) http://www.usaid.gov/powerafrica 
(17) http://www.cofide.com.pe/ 
(18) http://www.defense.gov/releases/release.aspx?releaseid=14420 
(19) http://www.hbl.in/ 
(20) https://sv.tie.org/event/tie-sig-energy-powering-india%E2%80%99s
-poor-mobile-phones-mini-grids-and-community-power 
Contact:
WindStream Technologies 
Investor Relations Department
ir@windstream-inc.com
 
 
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