Fluence Achieves Financial Close for US$48 Million San Quintin, Mexico Project

Fluence to build and operate a 22 million litre/day seawater
desalination plant

30-year operating agreement in place prior to plant transfer

Off balance sheet, non-recourse, project finance put in place

High-volume water sales enhance Fluence’s recurring revenue streams

MELBOURNE, Australia & NEW YORK–(BUSINESS WIRE)–Fluence
Corporation Limited (ASX: FLC) is pleased to announce that it has
reached financial close for its seawater desalination project for its
customer, Comisión Estatal del Agua de Baja California (CEA), the State
Water Commission of Baja California, to provide water for the town of
San Quintin, Mexico.

This project is a milestone for Fluence, as it is the first off-balance
sheet, non-recourse project funding arranged by the Company. For this
US$48 million project, Fluence has arranged debt financing covering 75%
of the project cost from the North American Development Bank (NADB). The
remaining equity investment will be provided by Fluence in combination
with its local partners.

The project calls for Fluence to build and operate a 5.8 million
gallon/day (approximately 22,000 m3/day) seawater
desalination plant. The Special Purpose Vehicle owned by Fluence and its
local partners will sell the produced water to the area of San Quintin
for the next 30 years, after which ownership of the plant will be
transferred to the customer.

Like similar projects in Mexico, the San Quintin project faced
legislative hurdles that delayed closing since the contract was
initially awarded in 2015. Following the passage of local legislation by
the government of Baja California in mid-December 2017, Fluence has now
successfully achieved financial close.

Fluence expects to receive first disbursement and start construction as
early as the beginning of the 3rd quarter of this year,
subject to resolution of the local legislation appeal process, which
could result in project commencement later in the second half of 2018.
The Company expects the plant to be fully operational within 20 months
of project commencement, after which water sales are expected to
generate US$10 million of recurring annual billings for Fluence.

Commenting on this major milestone, Fluence Managing Director and CEO,
Henry Charrabé said: “The San Quintin water desalination plant project
is important for a number of reasons. It supports Fluence’s projected
revenue for 2018, reaffirms the Company’s position as a project finance
partner for our clients, and increases our recurring revenue base that
will underpin future growth. We are targeting additional Build Own
Operate Transfer projects later this year.”

Commenting on this important project, NADB Managing Director Alex
Hinojosa, said: “NADB is pleased to provide this financing for a second
desalination plant in Baja California. As groundwater resources become
increasingly strained, collaborating with all levels of government in
finding the necessary solutions to provide safe water for human
consumption and economic development is a priority for the Bank.”

When completed, the San Quintin plant’s capacity will serve over 100,000
residents in Baja California, a region the Mexican government has
declared in drought since 2014. The plant will provide a safe and
reliable source of water to San Quintin and neighboring communities in
the municipality of Ensenada.

About Fluence Corporation Limited (ASX: FLC)

Fluence has experience operating in over 70 countries worldwide and
employs more than 300 highly trained water professionals around the
globe. The Company provides local, sustainable treatment and reuse
solutions, while empowering businesses and communities worldwide to make
the most of their water resources.

Fluence offers an integrated range of services across the complete water
cycle, from early stage evaluation, through design and delivery to
ongoing support and optimization of water related assets. With
established operations in North America, South America, the Middle East
and Europe, Fluence is also expanding into China’s rural wastewater
treatment market.

Global consultancy Frost and Sullivan recently awarded Fluence
Corporation “2018 Global Decentralized Water and Wastewater Treatment
Company of the Year”, noting in their award dissertation:

“While typical decentralized water treatment systems are relatively
expensive, complicated, and inefficient, Fluence Corporation leverages
innovative and smart technology solutions backed by decades of
industrial know-how to excel in water and wastewater treatment
solutions. Fluence’s excellence becomes apparent through its success, as
the company continues to expand its existing offerings as well as
partnerships with other prominent companies in the industry. With its
easy to use, sustainable, smart and cost-effective solutions as well as
a remarkable year of growth, innovation, and leadership, Fluence
Corporation earns Frost & Sullivan’s 2018 Global Company of the Year
Award in the decentralized water and wastewater treatment industry.”

Further information can be found at https://www.fluencecorp.com/.

Contacts

Corporate:
Henry Charrabé (USA), +1 212 572 3766
Managing
Director & CEO
[email protected]
or
Richard
Irving (USA), +1 408 382 9790
Executive Chairman
[email protected]
or
Ross
Kennedy (Australia), +61 409 524 442
Company Secretary & Advisor to
the Board
[email protected]
or
Investors
(Australia):
Market Eye
Ronn Bechler, +61 400 009 774
[email protected]
or
Media
(Australia):
Market Eye
Tristan Everett, +61 403 789 096
[email protected]
or
Investors
& media (USA):
The Blueshirt Group
Gary Dvorchak, CFA
+1
323 240 5796 (US) or +86 138 1079 1480 (China)
[email protected]