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Bankability of clean energy projects - South Africa case

This session is part of the Clean Energy Regulators Initiative Webinar Programme.

Theme 3 - Finance

Module 4: Bankability

South Africa launched its Renewable Energy program in 2010. Since then, SA has had four extremely successful rounds of bidding, with over 6,000MWs allocated across wind, solar PV, CSP, landfill gas, biomass and small hydro projects. R193 billion (USD15.5 bn) of FDI has been injected into the economy through this new asset class. The program has been highly commended with applause from local & international developers and the financing fraternity alike.

South African banks have been at the forefront of the financing for these renewables projects, which are funded in Rands with a Rand PPA, backstopped by the SA Government.

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Bankability of clean energy projects - South Africa case

  1. 1. Discussion Materials Overview of the Power Sector in South Africa 22 September 2015
  2. 2. Overview of the Power Sector in South Africa
  3. 3. 2012A 2017E CAGR12-17 Capacity (MW) 44, 289 57, 462 5.4% Net Capacity Addition (MW) - 13, 173 - Electrification rate 76% - - Capacity by Fuel South African Electricity Market Key Statistics Market Overview Capacity Evolution 44,289 45,561 49,579 52,478 55,462 57,462 0 20,000 40,000 60,000 2012 2013 2014 2015 2016 2017 MW 81% 16% 3% ___________________________ Source: BMI Country Report. http://www.ipp-projects.co.za/ Note: (1 ) IRP 2014 is still in draft form and is yet to be promulgated 91% 5% 4% Governing bodies  The Department of Energy (DOE) and the National Energy Regulator of South Africa (“NERSA”) are responsible for setting energy policies and regulation of the energy sector respectively  They determine critical aspects such as the framework for procurement of new generation capacity and consumer pricing regimes Market  South Africa’s electricity market is dominated by the 100% state –owned utility Eskom which generates 95% of the electricity produced in the country and 45% of electricity produced on the continent  As the only transmission licensee, Eskom is responsible for all transmitted electricity  Distribution is shared between Eskom, municipalities and other licensed distributors Energy Agenda  The DOE’s Integrated Resource Plan (“IRP”) 2010 to 2030 (1) puts a framework in place that sets out the scale and mix of new electricity required over the next two decades  Programmes identified in the IRP include:  The Renewable Energy Independent Power Producer Procurement (REIPPP) Programme which is aimed at procuring 6,925 MW of renewable energy  The base-load programme which is aimed at procuring 7,761 MW of base load capacity comprising 2,500MW from coal , 2,652MW of gas power and 2,609 MW of imported hydro power . The Minister has since released a Ministerial Determination for 3,126MWs of gas-to-power projects.  “The medium term risk mitigation” programme aimed at mitigating against supply-demand shortfalls in the medium term, comprising 800 MW from cogeneration and 474 MW of natural gas  DOE Peaker programme is a long standing DOE initiative that involves purchasing power from independently owned Avon (670 MW) and Dedisa (335 MW) power plants (OCGTs) Natural Resources  South Africa has the world's ninth-largest amount of recoverable coal reserves and holds 95% of Africa's total coal reserves  Positioned as the fifth-largest gold producer and accounts for over 6% of the world’s output  In 2013, accounted for an annual production of c. 5 million ounces  South Africa is also one of the world’s largest producer of platinum  In 2013, provided two thirds of the world’s platinum mining output  South Africa produces about 190,000 barrels of oils each and every day land is looking into more prospects with the opening up of new oil wells to expand the business  Currently importing oil and have not reached a capacity to export any oil From 2014 to 2017  4800 MW of REIPPP projects  + 800 MW cogeneration + 474MW natural gas, medium term risk mitigation programme  +/- 1800 MW of Eskom large coal projects (Medupi and Kusile) Contentional Thermal Renewables (incl. hydro) Non Hydro Renewables 1
  4. 4. South African Electricity Market (cont’d) Overview  The generation landscape is gradually shifting from single player dominance to a relatively open/competitive system  Single buyer model – Eskom monopoly  Interface with IPPs through 2 units. (i) Eskom’s grid access unit managing connection to the grid (ii) Single Buyer Office (“SBO”) buying power from IPPs  Eskom distributes close to 60% of electricity sales with municipalities and other licensed distributors distributing the balance of electricity sales Participants  Eskom the 100% state owned utility generates c. 95% of South Africa’s electricity  Eskom operates 27 power stations with a total nominal capacity of 41,995 MW, comprising 35 726 MW of coal fired stations, 1 860 MW of nuclear, 2 409 MW of gas fired, 2 000 MW hydro-and pumped storage as well as a 3 MW wind farm  Transmits, distributes and retails electricity  Length of power lines : 359,337 km  # of customers: 800 Municipalities, 3 000 industrial, 1000 mining, 50 000 commercial, 84 000 agricultural and 5.1million residential  Supply sales (TWh): 217.903 IPPs(1)  The REIPPP programme  Launched in 2011 and has generated a total of 64 renewable energy IPPs across 3 of 5 competitive bidding rounds  The 92 successful projects incorporate more than 100 different shareholder entities  Prominent equity players across the bidding rounds include AIIM, Mainstream, Mulilo and Enel Green Power amongst others  DOE Peaker programme  On June 2013, a consortium led by GDF SUEZ signed PPAs with Eskom for two greenfield open-cycle turbine power plants with a combined capacity of 1 005 MW Municipalities & licensed distributors  Distributes c. 40% of electricity sales to customers. Key Municipalities include:  Buffalo City  City of Cape Town  City of Johannesburg  eThekwini Electricity  Ekurhuleni Metropolitan  City Power Johannesburg  Grid length: undisclosed  Supply sales (TWh): undisclosed  Ownership: 100% state owned Generation Transmission/ Distribution Wholesale / Retail ___________________________ Source: Company data, Press. Note: (1 ) South Africa’s Renewable Energy IPP Procurement Programme: Success Factors and Lessons, World Bank Group 2
  5. 5. South African Electricity Market (cont’d) South Africa Transmission Network Regional Interconnection Grid Northern Cape Eastern Cape Limpopo Free State Western Cape North West KwaZulu-Natal Mpumalanga Gauteng Substations Future Substations Current Lines Future 132 220 275 400 765 Lines Currrent 132 220 275 400 533 765 ture 220 275 400 765 Lines Currrent 132 220 275 400 533 765 ___________________________ 1. Eskom website, SAPP website. Comments  The Strategic Grid Plan represents the transmission network infrastructure requirements for a period of 10 years and is updated annually  The purpose is to optimally and reliably transport the power from the source of generation to the location of the load  South Africa’s Eskom forms part of the Southern Africa Power Pool (“SAPP”)  SAPP was formed to provide reliable and economical electricity supply for the consumers of each SAPP member consistent with the reasonable use of natural resources and the effect of the environment  Eskom exports power to SAPPP as a member of Southern Africa Development Community (“SADC”)  EDM of Mozambique, ZESA of Mozambique and Eskom of South Africa have MoUs to develop interconnectors to increase power transfers and stability within the SAPP network  The Interconnector projects will involve the separate development of the following sections of the project  In Zimbabwe  400/330 kV new substation at Triangle  400/330 kV new substation at Orange Grove  Zimbabwe to South Africa  275km 400kV line Triangle-Nzhelele Interconnector (Zimbabwe-RSA)  New Nzhelele substation 400kV line bay  Zimbabwe to Mozambique  185km 400kV line Orange Grove – Inchope Interconnector (Zimbabwe-Mozambique)  Establishment of the new 400/220kV Inchope Substation in Mozambique  360km 400kV Inchope - Matambo line  115km 400kV Matambo – Songo line 3
  6. 6. South Africa Renewable Energy IPP Programme Overview
  7. 7. REIPPP Overview General REIPPP RequirementsREIPPP Overview IPP PPA National Energy Regulator of South Africa (NERSA) Eskom (State Owned Utility) South Africa Department of Energy (DoE)Implementation Agreement Generation Licence Connection Agreement REIPPP Programme  The South African government’s Integrated Resource Plan (“IRP”) sets an ambitious target to add 50,000 MW of new generation capacity to the South African grid by 2028 with renewable energy technologies accounting for approximately 42 per cent of this target  It is against this background that the South African government, through the Department of Energy (“DoE”), launched the Renewable Energy IPP Procurement Programme in August 2011  Under the programme, the DoE initially mandated the procurement of up to 3,625 MW from IPPs of various renewable energy technologies including : wind, solar photovoltaic, concentrated solar power, biogas, biomass, small hydro and landfill gas. An additional 3,100 MW was subsequently made available for procurement under the REIPP Procurement Programme REIPPP Tender Design  Under the REIPP programme, bids are invited from developers in sequential bidding rounds, or “windows”. To date, there have been four bidding windows, with the fifth expected to take place in early 2016. Potential bidders are required to register basic details of their proposed project(s) approximately two months ahead of the relevant bid window and unsuccessful projects can be bid again in future windows  In each bid window, a maximum number of megawatts is made available for each applicable technology and a price cap is set (although the DoE has now removed the price cap for all the technologies, having concluded that intense competition has driven down prices and rendered a cap redundant) Project Structure  This requires a bidder to provide, among other things, a structural diagram showing its debt and equity participants, contractors and key equipment suppliers Legal Requirements  This requires a bidder to indicate, among other things, its acceptance of the terms of the PPA, IA and the other designated project agreements Land Requirements  This requires a bidder to show, among other things, that it has secured the project site, identified all permits and licences required for the project with respect to land rezoning, subdivision and water use Environmental Requirements  A bidder must provide, among other things, the environmental authorisation and related documents Financial Requirements  This requires a bidder to specify, among other things, its price, identify its method of financing the project and demonstrate that it has made sufficient progress in securing financing for its project and the necessary proof of its ability to raise such financing Technical Requirements  A bidder is required to provide, among other things, information on the technology to be used, resource data, contractor capability and track record and a cost estimate letter for grid connection Economic Development  A bidder must make binding commitments (during both construction and operations phase) with respect to share ownership by black South Africans and local communities, local content, job creation, preferential procurement, management control, socio-economic development and enterprise development Value for Money  Each project must provide net benefit to the South African government and consumer taking into account, without limitation, the price offered, the bidder’s internal rate of return and level of success payments  The bid documents contain detailed and complex requirements. Bid responses must comply with all of the qualification criteria to be compliant  The qualification criteria requires bidders to provide detailed responses as to the extent of their readiness to deliver their projects in key areas such as project structure, compliance with specific legal, land, environmental, financial, technical and economic development requirements. Detail on each of these requirements is shown below:  The commercial structure of the REIPPP is shown below: 4
  8. 8. South Africa Power and Energy Sector Overview IPP Procurement Programmes Renewable Energy Program  Total of 7, 025 MWs of renewable energy across five different phases  Technologies include wind, solar pv, solar thermal, biomass, mini-hydro, landfill gas  Program is currently in its fourth phase Baseload IPP Procureme nt Program  Coal - 2,500 MWs which will be divided into two phases to commence in 2015  Import hydro - 2,690 MWs  Gas – 3,126 MWs Medium Term Risk Mitigation Projects  Cogeneration - 800 MWs  Gas OCGT/ (MTRMP) - 474 MWs  The cogeneration programme is expected to commence in Q3 2015 You may be interested in the upcoming 2,500MW coal baseload programme and the 3,126 MW gas baseload programme  A summary of the IPP programmes is shown below: 2,500 2,690 2,652 7,842 Coal Import Hydro Gas Total MW 800 474 1,274MW Cogeneration Gas OCGT Total The Energy Regulatory Framework  South Africa has put into place transformative policies to ensure energy supply security and this is demonstrated in a number of legislative actions including the White Paper on the Renewable Energy Policy of RSA (2003), the National Energy Bill (2008), and the National Energy Act (2008)  The Integrated Resource Plan 2010-2030 (“IRP 2010”) developed by the Department of Energy (“DoE”) is a public policy document that outlines the energy mix contemplated for South Africa until 2030  The DoE is in the process of implementing the following IPP Programmes: Renewable Independent Power Producer Procurement Programme (“REIPPPP”), the Baseload IPP Procurement Programme and the Medium Term Risk Mitigation Programme Successful Renewable Programme to Date Commentary  There is an immediate opportunity to participate in the Coal Baseload Programme  The Coal Baseload Programme Request For Proposals document (“Coal RFP”) was released on 15 December 2014 to potential bidders and bid responses for round 1 of the programme will be due on 8 June 2014  The Coal RFP states that a total of 1,600 MWs will be procured in round 1 of the programme with 1,000 MWs being allocated to projects within South Africa and 600 MWs from outside of South Africa  There is a longer term opportunity to participate in the gas baseload programme and the hydro programme which will be undertaken following the coal base load programme 2,820 3,325 600 280 7,025 Solar PV Wind CSP Other Total MW ___________________________ Source: NIPP website, Department of Energy website  The REIPPP programme has generated 92 new renewable energy IPPs across the four bidding rounds to date totaling R193 billion in investment has been committed for the construction of over 6,200 MWs of capacity in technologies like onshore wind, solar PV and concentrated solar power  The DOE issued a media statement in April 2015 stating the intention to launch an expedited procurement process of 1,800 MWs from all renewable technologies. The RFP was issued in June 2015 Energy Allocation per Determination Energy allocated (Round 1- 4) Remaining Energy (MW) Remaining Energy (%) Wind 3 325 MWs 2 656 MWs 669 MWs 20% Solar PV 2 820 MWs 1 899 MWs 921 MWs 33% CSP 600 MWs 600 MWs 0 MWs 0% Landfill/ Biomass/ Hydro/ Biogas 280 MWs 79 MWs 201 MWs 72% 5
  9. 9. REIPPP Overview (Cont) REIPPP Programme to Date REIPPP Competitiveness & Trends(1) Socio Economic Features of REIPPP South African Participation  A bidder must ensure that at least 40 per cent of the beneficial shareholding in the project company is directly or indirectly held by South African citizens Job Creation  Each bidder must make commitments to ensure that a certain percentage of its employees during the construction and operation phase are South African citizens of which a certain percentage must be black South Africans Local Content  This is intended to measure the construction expenditure of a project and to express the South African products and services component as a percentage of the total project cost  Local content minimum threshold requirements have increased and require a minimum SA entity participation of 40%, a BEE contributor status level of 5, indicating the extent of the South African entity participation Local Community Ownership  This requires a bidder to ensure that the project company allocates a certain percentage of its ultimate beneficial shareholding to local communities this requires a bidder to ensure that the project company allocates a certain percentage of its ultimate beneficial shareholding to local communities Socio Economic Development  This requires a bidder to identify socio-economic needs of the surrounding communities where the project site will be located and formulate strategies on how such needs could be met utilising the socio-economic development financial contributions Management Control  Commitments that a certain percentage of the project company’s management will comprise black South Africans Enterprise Development  Commitments to initiatives that will enhance the capacity of emerging businesses owned/controlled by black South Africans Preferential Procurement  Commitments to procure goods and services from businesses owned or controlled by black South Africans  The REIPPP programme has generated 92 new renewable energy IPPs across the four bidding rounds to date  R193 billion in investment has been committed for the construction of over 6,200 MW of capacity in technologies like onshore wind, solar PV and concentrated solar power  The DOE issued a media statement in April 2015 stating the intention to launch an expedited procurement process of 1800MW from all renewable technologies. The RFP has been issued 114.3 275.8 302 - 89.7 164.5 282 140 65.6 88.1 164 0 100 200 300 400 Onshore Wind Solar PV Concentrated Solar Power Biomass REIPPP 1 Average Bid Prices REIPPP 2 Average Bid Prices REIPPP 3 Average Bid Prices Project Evaluation  Project evaluation is based on a weighting of 70:30 ratio of price to economic development criteria Average Tariffs  Increased competition across the bidding rounds have seen average tariffs of IPP preferred bidders drop dramatically  Onshore wind tariffs have dropped close to 43% ,with Solar PV tariffs having dropped 68% and concentrated solar power tariffs having dropped close to 46%  Certain criteria have been designed to advance the South African government’s socio- economic development policy objectives  Most of these criteria have minimum compliance thresholds as well as higher targets which a bidder can commit to if it wishes to enhance the competitiveness of a bid at the evaluation stage. ZAR cents / kWh Technology, MW Round 1 Round 2 Round 3 Round 3.5 Round 4 Round 4.5 MW Capacity remaining Solar PV 631.8 417.12 435 415 687 626.08 Wind 634.10 558.90 787 676 398 664 CSP 150 50 200 200 - - Small hydro - 14.40 - 5 115.6 Landfill Gas - - 18 - 7 Biomass - - 16 25 19 Biogas - - - - 60 Total 1,415.9 1,040.42 1,456 200 1,121 1,085 1,691.68 ___________________________ Source: Company data, http://www.energy.gov.za/IPP/List-of-IPP-Preferred-Bidders-Window-three-04Nov2013.pdf 1. Refers to Round 1 to 3. 6
  10. 10. REIPPP Overview (Cont)  One qualification criteria which has become a key part of the programme is the engineering, procurement and construction (“EPC”) arrangements. A bidder has to provide details of its EPC contractor, including its track record and capability in building the power plant  Although this is not a specific bid compliance requirement, a competitive EPC price is essential for a successful project and a balance needs to be struck between risk transfer to the EPC contractor and price. Lenders will want the project company to be insulated from risk, yet a blanket approach will not be accepted in the market. With experienced and well resourced sponsors in place, there is scope for the project company to take on appropriate risks – but this is all in the context of fixed “upstream” project documents (the PPA and IA) that govern the process and place fixed obligations and timings on the project company.  These documents (and their impact on the EPC and operations and maintenance arrangements) need to be understood, as they establish a framework for the construction and operation of the projects.  The correct flow-through of processes (in particular during commissioning and commercial operation) and project relief (whereby the EPC contractor’s relief under the EPC contract is limited to that which the project company obtains under the project documents) are essential and must be considered pragmatically and commercially.  Other key issues that need to be addressed include:  dealing with delays caused by Eskom (in particular in relation to grid connection);  site risk under the PPA;  site access;  payment structures and security;  how issues particular to the local construction market can impact on construction and operation;  exchange rate risk;  economic development obligations; and  access to the transmission or distribution system.  With continued pressure on tariff pricing there may be a move towards split contract structures (where the project company employs an equipment supplier and a separate balance of plant contractor – and manages the interface between the two). The Role of EPC & Bidding Considerations Challenges and Lessons Learned Simplified Bidding Requireme nts  The cost of bidding has been high due to the detailed and complex nature of the bidding requirements. The DoE has sought to simplify bidding requirements (and therefore lower bidding costs) by making the following changes to the bid documents for the remaining bidding rounds:  Bidders no longer need to submit shareholders’ agreements in respect of the project company or heads of terms with their contractors and key equipment suppliers at the time of submission. This eliminates advisory and other associated costs incurred through negotiating these documents at the bid stage;  Certain licences and consents are not required until the preferred bidder stage;  The terms on which lenders can issue a letter of support to provide debt financing have been relaxed; and  Bidders only need to provide two hard copies and a soft copy of the bid response as opposed to seven hard copies and seven soft copies as was the case in previous bid windows. Licenses and Consents  Currently, the requisite licences and consents are obtained under different pieces of legislation and from different government departments with different timings and procedures. A single umbrella legal framework for renewable energy procurement with a “one-stop shop” government department for licenses and consents would make the bidding process more efficient and this would also help reduce the costs associated with liaising with different departments Project Site  Securing the project site is a key component of the bidding process. It is therefore important for a bidder to identify the project site and conclude the necessary contracts in sufficient time to ensure that the land arrangements meet land use and acquisition criteria. It is also important for bidders to resolve any land tenure issues such as any third party rights, existing mortgages Grid Connection  Due to financial constraints, there have been concerns regarding Eskom’s ability to build the network infrastructure necessary to connect the large number of successful projects to enable them to achieve commercial operations within the time frames specified in the PPAs. In addition, grid connection costs have now become an issue as the initial cost estimate letters provided by Eskom at bid submission vary substantially from subsequent budget quotes provided to preferred bidders. This has caused a delay in successful third bid window projects reaching financial close 7
  11. 11. REIPPPP: Expedited Bid Submission Window The Minister of Energy announced that the Department of Energy would be issuing Request for Proposals (“RFP”) for an expedited renewable energy IPP procurement process, for which 1,800 MW would be allocated MW Allocation and New Price Caps Key Dates Overview 650 520 450 100 40 25 15 0 100 200 300 400 500 600 700 Onshore wind Solar PV CSP Biomass Small hydro Biogas Landfill gas R760/ MWh R870/ MWh 1,370/ MWh 1475/ MWh 1117/ MWh 1475/ MWh 990/ MWh  The Expedited Bid Submission Window (“EW”) was released June 2015 by the Department of Energy (“DoE”)  The EW is open to all projects that are ready for submission within the required timelines, and not only to projects which were unsuccessful in previous bid submission phases  The Minister has allocated 1,800 MW to be allocated during the EW. However, the Department is not obliged to allocate all 1,800 MW during the EW  It is also anticipated that the Minister will issue a Third Determination that will provide for the procurement of a further 6,300 MW to be generated from renewable energy sources  The EW RFP is one of the various procurement processes that the Government will develop to procure this further generation capacity from renewable energy sources  Interested parties have until 6 October to respond to the RFP, the DoE has advised bidders to apply for cost estimate letters from the relevant grid provider as soon as possible The Price caps per Technology have been updated. Notably the Department has elected once more to impose a Price cap on Onshore Wind and Solar PV technologies. Previously, the Price cap was removed for these Technologies 3 Jul ‘15 8 Sept ‘15 8 Oct ‘15 Release of the EW RFP volumes Expedited bid submission date Signing of PPA, IA, DA, Connection Agreements and Financial Close 11 Dec ‘15 31 Jul ‘16 31 Dec ‘19 Bid registration date Announcement of preferred bidders COD proposed by a bidder to fall before D3c 2019 ___________________________ Source: IPPRenewables MW 8
  12. 12. Cogeneration IPP Procurement Programme Overview On 4 June 2015, the DoE issued request for bids for the Cogeneration Independent Power Producers Procurement Programme due 10 August 2015 MW Allocation & Price Caps Key Dates  The DoE issued a request for bids for the Cogeneration IPPP. The total MW is 800MW to be allocated for the first bid window across the technologies is as follows:  Waste to Energy (200MW): The primary permitted fuels are waste heat, process furnace off-gas and any other non- renewable energetic waste emitted from an industrial process. However waste or discard coal is not a permitted primary fuel under the programme  Combined Heat and Power (250MW): The primary permitted fuels are coal, waste or discard coal, natural gas and primary liquid fuels  Industrial Biomass (350MW): The primary permitted fuels are sugar bagasse, field trash and other sugar related renewable wastes associated with the host facility process; mill wastes, including chips, saw dust, shavings, soaps, methanol, sludges, bark and black liquor; and agricultural or forestry residue including alien vegetation clearing  It is anticipated that there will be four bidding windows under the Cogen IPP Procurement  The first bidding window bid submission date and announcement date on 10 August 2015 and 17 September 2015 respectively  It is anticipated that the second bid submission date will be 1 September 2015, the third bid submission date will be 27 October 2015 and the fourth bid submission date will be 23 November 2015 Overview 22 Jul ‘15 10 Aug ‘15 17Sept ‘15 Notify DoE on intention to submit a bid response Announcement of preferred bidders 11 Nov ‘16 Bid registration date due Projects bid to reach COD before this date R0.90 /kWh 350 250 200 0 100 200 300 400 Industrial Biomass Combined Heat and Power Waste to Energy MW R1.00/kWh R1.20 /kWh Price caps for each technology under the first bidding window ___________________________ Source: DoE The Cogen IPP Procurement Programme has two common characteristics across all the technologies. First, the fuel and / or energy source originates from an underlying industrial process and secondly, the cogeneration facility is coupled to the industrial process of a host plant 9
  13. 13. ● Following from accelerating and expanding REIPPP in August 2015, the Minister issued a determination in August 2015 for an additional 6,300MW of capacity allocation for future bid windows under REIPPP ● The additional MW made available by this determination are to be allocated across technologies as follows: ● Onshore wind 3,040MW, solar PV 2,200MW, CSP ● With this determination, the capacity allocation for the procurement of new generation capacity in future bid windows will almost double from previous determinations which totaled 6,725MW ● The Minister has also issued a separate gas-specific determination stating that new generation capacity for the procurement of 3,126 MW can come from any gas type or source ● This includes natural gas delivered to the power generation facility by any method (including by pipeline from a natural gas field or elsewhere or a liquefied natural gas (LNG) based method), coal bed methane, synthesis gas or syngas, above or underground coal gasification, shale gas and any other gas type as may be considered appropriate ● The Minister has issued an amendment to the existing determination relating to the Medium Term Risk Mitigation Project IPP Procurement Programme 2012 by including additional capacity allocation for new generation capacity for the procurement of 1,800 MW to be generated from: ● Waste heat or furnance off gas ● Cogeneration (i.e. the simultaneous generation of electricity and useful thermal energy from a common fuel source); and ● An energy source which is a co-product, by-product, waste product or residual product of an industrial process and / or sustainable agricultural or forestry activity South Africa Renewable Energy IPP Programme Overview Significant Announcements on SA’s Energy Programmes In August 2015, the Minister of Energy issued new ministerial determinations for additional capacity allocation for the country's renewable energy, gas and cogeneration programmes New Renewable Energy Determinations The renewable energy determination provides the desired certainty that there will be a pipeline of renewable energy projects in South Africa’s procurement of much needed new electricity generation capacity. The determinations on gas and cogeneration projects signal the government’s commitment to diversify South Africa’s energy mix ___________________________ Source: The Department of Energy Renewable Energy Gas Cogeneration 10
  14. 14. Appendices
  15. 15. REIPPP Round Winners List of successful bidders in the REIPPP program Round 1 Winners Round 2 Winners Round 3 Winners Round 4 Winners Solar CSP = 2 deals MW Khi Solar One 50.00 KaXu Solar One 100.00 TOTAL 150.00 Onshore Wind = 8 deals Red Cap Kouga Wind Farm- Oyster Bay 77.60 Cookhouse Wind Farm 135.00 Dorper Wind Farm 97.00 Noblesfontein 72.80 Dassieklip Wind Energy Facility 26.20 MetroWind Van Stadens Wind Farm 26.20 Jeffreys Bay 133.90 Hopefield Wind Farm 65.40 TOTAL 634.10 PV = 18 deals MW Slim Sun Swartland Solar Park 5.00 RustMo1 Solar Farm 6.80 Mulilo Renewable Energy Solar PV De Aar 9.70 Aries Solar 9.70 Konkoosies Solar 9.70 Greefspan PV Power Plant 10.00 Mulilo Rnewable Energy Solar PV Prieska 19.90 Herbert PV Power Plant 19.90 SoutPan Solar Park 28.00 Witkop Solar Park 30.00 Touwsriver Project 36.00 De Aar Solar PV 48.30 South African Mainstream Renewable Power Droogfontein 48.30 Letsatsi Power Company 64.00 Lesedi Power Company 64.00 Kalkbult 72.50 Solar Capital De Aar (Pty) Ltd 75.00 Kathu Solar Energy Facility 75.00 TOTAL 631.80 TOTAL MW’s ALLOCATED in BD1 1415.90 CSP = 1 deal MW Bokpoort CSP Project 50.00 TOTAL 50.00 Wind = 7 deals MW Amakhala Emoyeni 133.70 Gouda Wind Project 135.50 Tsitsikamma Community Wind Farm 94.80 West Coast 1 90.82 Grassridge 59.80 Waainek 23.28 Chaba 21.00 TOTAL 558.90 PV = 9 deals MW Jasper Power Company 75.00 Solar De Aar 3 Proprietary Limited 75.00 Sishen Solar Facility 74.00 Dreunberg 69.60 Boshoff Solar Park 60.00 Linde 36.80 Aurora-Rietvlei Solar Power 9.00 Upington Solar PV plant 8.90 Vredendal Solar Park 8.82 TOTAL 417.12 Small Hydro = 2 deals MW Stortemelk Hydro (Pty) Ltd 4.40 Neusberg Hydro Electric Project 10.00 TOTAL 14.40 TOTAL MW’s ALLOCATED in BD2 1040.42 CSP = 2 deals MW Xina CSP South Africa 100.00 Karoshoek Consortium 100.00 TOTAL 200.00 Wind = 7 deals MW Red Cap- Gibson Bay 110.00 Nojoli Wind Farm 87.00 Longyuan Mulilo De Aar 2 North Wind Energy Facility 139.00 Longyuan Mulilo De Aar Maanhaarberg Wind Energy Facility 96.00 Khobab Wind Farm 138.00 Noupoort Mainstream Wind 79.00 Loeriesfontein 2 Wind Farm 138.00 TOTAL 787.00 PV = 6 deals MW Adams Solar PV 2 75.00 Tom Burke Solar Park 60.00 Electra Capital 75.00 Pulida Solar Park 75.00 Muililo Sonnedix Prieska PV 75.00 Mulilo Prieska PV 75.00 TOTAL 435.00 Landfill Gas = 1 deal MW Johannesburg Landfill Gas to Electricity 18.00 Biomass = 1 deal MW Mkuze 16.00 TOTAL MW’s ALLOCATED in BD3 1456.00 On-shore Wind = 5 deals MW Roggeveld Wind Farm 140.00 The Karusa Wind Farm 140.00 The Nxuba Wind Farm 139.00 Golden Valley Wind 117.00 Oyster Bay Wind Farm 140.00 TOTAL 676.00 Solar PV = 6 deals MW Sirius Solar PV Project One 75.00 Drrogfontein 2 Solar 75.00 Dyason’s Klip 1 75.00 Dyason’s Klip 2 75.00 Konkoonsies II Solar Facility 75.00 Aggeneys Solar Project 40.00 TOTAL 415.00 Hydro= 1 deal MW Krusivallei Hydro 5 TOTAL 5.00 Biomass = 1 deal MW Ngodwana Energy Project 25.00 TOTAL 25.00 TOTAL MW’s ALLOCATED in BD4 1121.00 Indicates Barclays deals Indicates Barclays BEE Funding 11
  16. 16. REIPPP Overview (Cont) List of successful bidders in the REIPPP program Round 4.5 Winners Onshore Wind = 7 deals MW Soetwater Wind Farm 139 Kangnas 137 Perdekraal East 108 Excelsior Wind Energy Facility 32 Wesley-Ciskei 33 Copperton Windfarm 102 Garob Wind Farm 136 TOTAL 687 Solar PV = 6 deals MW Solar Capital Orange 75 De Wildt 50 Bokamoso 68 Zeerust 75 Greefspan PV Power Plant No 2 Solar Park 55 Waterloo Solar Park 75 TOTAL 398 TOTAL MW’s ALLOCATED in 4.5 1,085.00 Indicates projects that Barclays participated in 12
  17. 17. 17 Contact Details Barclays Africa – Contact Details Bhavtik C. Vallabhjee Barclays Africa – Corporate & Investment Banking Director – Power, Utilities & Infrastructure T: +27 11 772 7422 M: +27 76 258 3301 E: Bhavtik.Vallabhjee@Barclays.com Physical Address: 15 Alice Lane, Sandton, South Africa

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