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• Alessandro Bragantini
• Chief Operating Officer
• Building Energy S.p.A.
• Italy
Kathu 81 MWp Solar Farm
Kathu, Northern Cape, South Africa
BUILDING ENERGY IS A GLOBAL INTEGRATED INDEPENDENT POWER PRODUCER. OUR MISSION IS TO BE A LEADER IN THE CREATION OF RENEWABLE ENERGY, DELIVERING VERTICALLY INTEGRATED SOLUTIONS, THROUGHOUT OUR EXPANDED VALUE CHAIN, INTO COMMERCIAL AND UTILITY SCALE POWER PLANTS WORLDWIDE.
Contents
RSA Regulatory Framework
Financial Arrangement
Technical Solutions and Considerations
“The biggest barriers to developing renewable energy in Africa to date are not technological, but financial”.
President Jacob Zuma of South Africa November 2011, Durban.
Global Trends – Beginning of an End? Global New Installed Capacity (GW) (Bloomberg)
Global Trends – Renewable Market
Annual Energy Outlook end 2014, forecasts the global
installed capacity of renewable energy to double from
1,566 GW (in 2012) to 3,203 GW in 2025 at an average
annual growth rate of 5.7%
Solar photovoltaic (PV) technology shall account for 33.4%
of total renewable energy capacity additions over the 2012-
2025 period. Global solar capacity is due to increase from
94 GW in 2012 to 670 GW in 2025.
Wind follows (32.7%) with hydro power at 25.3%.
Other renewable technologies will represent the remaining
8.6% of capacity additions.
Global Trends - Macroeconomics Global Economic difficulties and oil price crisis are affecting
the short term outlook for renewable energy.
Western world economic climate has impacted support
schemes, which continues to be the lifeline for certain
renewable energy installation.
Yet, technological innovation & scale economies yield a
decline in the cost of renewable energy, such to allow grid
parity achievement (LCOE) in several urban areas.
Fast deployment of renewables vs/ traditional powergen
enabled developing countries to adopt these technologies,
also as a response to rapid consumption growth.
REIPP Programme
Technologies and Allocations (Round 1 – 4)
Technology MW Allocated
in Round 1 MW Allocated
in Round 2 MW Allocated
in Round 3 MW Allocated
in Round 4
Onshore Wind 1850 1470 653,6 590
Solar PV 1450 1075 401,3 400
CSP 200 400 200 -
Biomass 12,5 47,5 60 40
Biogas 12,5 47,5 12,5 -
Landfill Gas 25 - 25 15
Small Hydro 75 60 120,7 60
Small projects with a max. capacity of 5MW
100 100 - -
Total MW 3725 3200 1473,1 1105
REIPP Programme
Technologies and Allocations (Round 4)
– Wind
• Roggeveld – 140MW
• Karusa – 140MW
• Nxuba – 139MW
• Golden Va.y – 117MW
• Oyster Bay – 140MW
– Biomass
• Ngodwana - 25MW
– Hydro
• Kruisvallei – 5MW
– Solar
• Sirius PV 1 – 75MW
• Droogfontein 2 – 75MW
• Dyason’s Klip – 75MW
• Dyason’s Kilp 2- 75MW
• Konkoonsies II – 75MW
• Aggenys – 40MW
REIPP Bid Structure
IPP procurement Programme based on 6 Bid Submission
Phases
Round 1 submission date 4 November 2011 (following bid
March 2012 and then every year in August thereafter)
Bidders must meet financial, technical and localization
qualification criteria in order to be evaluated
Bids evaluated based on price (70%) and socio-economic
development criteria (30%)
28 Preferred Bidders announced in December 2011 who
reached Financial Close in November 2012
Kathu - Financial Arrangement Business model
EPC
FINANCIAL ARRANGEMENTS
O&M
Green and Brownfield project development
activities worldwide
Engineering, Procurement & Construction
contractor for turnkey power plant solutions,
in accordance with bankability standards
and best market practices
Advisory and Arrangement for the
securement and structuring of the debt
(project finance and leasing) to finance plant
construction
Operation and maintenance of PV plants through
long term contracts (10 years – 20 years)
ASSET MANAGEMENT
Direct equity investments and asset
management of property plants, guaranteeing a
return according to the plant performance
DEVELOPMENT Greenfield
Permitting
Brownfield
Engineering Procurement
and Construction
Operations and
Maintenance
Financing and Asset
Mgmt
VALUE
CREATION
AT ALL
STAGES
OF
THE
VALUE
CHAIN
Kathu - Business Model
2
Land rights
Permits
PPA, IA, DA Grid connection/
IPP
authorization
Debt
Equity
Kathu REISA spv
Engineering
& Design
Construction (sub-contracting)
PV Panels
Inverters
Tracking
System
Operations
&
Maintenance
Performance
Guarantee
VentusaLocalDeveloper
DOE ESKOM/ NERSA
Investors
EPC O&M
Business Model
Kathu - Debt and Equity Structure Debt and Equity Structure
Kathu Solar Community Trust
Equity finance
AIIM
EQUITY: 20%
DEBT: 80%
34% 10% 28,5% 25% 2,5%
100% 90%
Key figures “Italian developer Building Energy has closed the financing for its 81MW Kathu
solar photovoltaic project in South Africa. Drawdown on the R2.9 billion debt
began on 19 November 2012, and construction on the plant is expected to be
completed within 21 months.”
Project Finance Magazine, 26 November 2012
PROJECT HIGHLIGHTS:
• 81MWP Single Axis Tracker
System
• 180GWh/annum produced
• 350 M€ Project Investment
Cost;
• Equity raised: 70 M€
• Debt: 280 M€
• 21 month construction
period
• Equity sponsors include
Macquarie, Old Mutual
BUILDING ENERGY’S ROLE:
• Lead member and sole sponsor to
Financial Close
• Developer, EPC contractor, O&M
Contractor
• Debt and Equity arranger
Technical Solution and Considerations Project Location
The facility will be installed on Portion 5 of the Farm Wincanton 472, located approximately
17km North-West of the town of Kathu in the Northern Cape Province on the following
approximate coordinates as shown below
Latitude 27,58660 S Longitude 22,93590 E.
Initial Project Site
Preliminary Layout – prego mettere quello vero finale
Technical Details
The photovoltaic modules to be installed will have 230 Wp
of peak power each.
The generating units have following data:
• N° 108 inverters of 750 kW rated power,
• N° 352.107 PV modules,
• N° 16.767 strings, each of 21 modules
Total generating power of about 81 MWp (80,985 MWp)
Economic Development Community Involvment
The Project Company has developed the Enterprise Development and Socio-Economic
Development projects, mainly in a 50km radius from the project site.
These areas include communities of , Hotazel, Kuruman, Dingleton, Kathu, Mapoteng,
Shesheng, Deben, Dibeng, Olifantshoek
Socio-Economic Development and Enterprise Development contributions has been spent on
85% black beneficiaries, across the projects.
Manpower Planned vs/ Actual Job Creation
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Manpower Histogram
Planned Quantity - workers
Actual Quantity - workers
Planned Quantity - management
Actual Quantity - managers
Planned Quantity - Cumulative
Actual Quantity - Cumulative
Lesson learnt – more and more challenges
Today’s private renewable investors execute
projects within increasingly complex environment
in the technical sector
In the financial setup
In the legislative frame
In the socioeconomic expectations
The ability to successfully execute these projects
drives, ultimately, the achievement of business
objectives
Lesson learnt- Community Involvement Trust has 2,5% shareholding in project.
The Socio-Economic Development initiatives were
undertaken by the Project Company hand in hand
with Contractor and Operator.
The project has well exceeded the threshold
requirement of 1 percent of revenue on Socio-
Economic Development initiatives.
Several types of initiatives held in health, education,
safety & security, environment, arts & culture, etc.
ALL IN ALL A VERY POSITIVE EXPERIENCE,
BOTH HUMAN AND PROFESSIONAL
Lesson learnt – technical KATHU 81 MWp – 2012
Monoaxial Tracker Tilt 0°
No. 13 masonry Electrical /
Inverter Buildings w/HVAC
Masonry control building,
wharehouse, offices
21 months construction
Several subcontractors
Substation 2 x 100%
redundant equipment
Main equipment imported
Grid code: modified after
NTP, compliant after variations
AGGENEYS 86 MWp – 2015
Monoaxial Tracker Tilt 0°
No. 24 Outdoor Inverter /
Trafo pads
Prefabricated buildings
15 months construction
Most works in direct hiring
Substation 1 x 100%
equipment
Main equipment local
manufactured
Grid code: clear and fixed
requirements from NTP
Lesson learnt – simplify and streamline
KATHU 81 MWp - 2012
16 months from preferred
bidders to NTP
No. 5 law firms involved
Contractual structure
defined after preferred
bidder status
Exchange rate risk (foreign
manufacturing)
Limited solar engineering knowledge in the market
PPA Tariff = “X”
AGGENEYS 86 MWp - 2015
Planned 8 months from
preferred bidder to NTP
No. 2 law firms involved
(transactional Lawyer)
Contractual structure
streamlined
Limited excgange rate risk
(mostly local procurement)
Well developed engineering
knowledge in the market
PPA Tariff = “1/3 of X ”
Lesson learnt – conclusions
The world we live in - and how it will change –
creates an ever increasing flow of new challenges /
opportunities
Agile leadership can create an adaptive company
internal environment and foster agile innovation
practices
Strategy in fast paced environments: It is about a
sound framework, not about a detailed plan
The mindset is the key - an agile company can create
and maintain the mindset needed to succeed
Lesson learnt – #2 takeaways
Strenght: "the ability [of a system] to withstand an
applied load without failure”.
Resilience: "the ability [of a system] to absorb energy
when it is deformed elastically, and release that energy
upon unloading”.
In a way:
#1 “Resilience is the ability to cope with changes“.
Further, especially in Renewables:
#2 “ It’s not the big that eat the small… it’s the fast
that eat the slow”. Jason Jennings