Eskom CSP / Solar Augmentation ConferenceCSP Project Development

Marc Immerman Director Solafrica

Contents• Bokpoort Introduction

• Key Project Facts

• Project Benefits

• Regulatory & Licensing Challenges

• Financial Challenges

• Why?

Bokpoort CSP 50MW TroughMajor Project Participants

EPC:TSK,

Acciona, Sener, Crowie

O&M: ACWA ,Invest in

Africa

Senior Lenders: Investec,ABSA,

OMSFIN

Equity:Lereko Metier

Funds,ACWA Power,

PIC,Kurisani,

Local Community

Developers:Marc

Immerman,Mike

Goldblatt,Lereko,Metier,

IDC,ACWA

Key Facts• Status: Successful bidder in R2 of the REIPPP, plant in early construction• Technology: Trough • Capacity: 50 MW incorporating 9.5 hrs storage• Size: Approximately 300 hectares• Location: South Africa, Northern Cape Province, Groblershoop. 120 km SE of Upington

• DNI: 2800• Grid Connection: Garona Substation situated on Bokpoort Farm• Development timeframe: 4 years• Construction timeframe: 30 months• PPA term: 20 years

Bokpoort Site: 120km SE of Upington

Project Benefits• Government Objectives

• Renewable energy targets

• Green economy priority (State of the Nation Address)

• Industrial Policy Action Plan (CSP targets)

• Electricity Integrated Resource Plan (CSP allocation)

• Addressing South Africa’s severe energy shortage

• Economic Development

• ED / SED: Significant % of revenue to flow to BEE farming and youth development

• Capital investment: 40% local content

• Local investment: civil engineering, roadworks, site preparation, metals fabrication, etc.

• Construction employment: ± 1,000 jobs from unskilled to highly skilled.

• Permanent employment: ± 60 (formal, permanent jobs)

• Numerous indirect benefits: transport, catering, tourism, real estate, fuel supply, maintenance, waste management, etc.

Development Challenges• Funding ~ risk-return

• Timeframes

• Complexity

• Limited pool of partners

• Grid, Water and Sun

• Varied experience and skillsets required

• Diverse technology options

Regulatory & Licensing Challenges

• Time consuming

• Expensive

• Co-ordination between multiple local, national and provincial government departments

• Trailblazing

• Extensive detail required

• Agricultural land ownership and subdivision complexity

• Stakeholder engagement

• Local community engagement

Permit/Approval Regulatory Agency

Environmental Authorisation (ROD) Department of Environmental Affairs

Waste Management License Department of Environmental Affairs

Water Use License Department of Water Affairs

Obstacle Approval Civil Aviation Authority

Grid Connection Confirmation Letter Eskom

Land Use (Departure)Local Municipality and Department of Agriculture

Land Use (Rezoning)Local Municipality and Department of Agriculture

Biodiversity ConsentDepartment of Forestry and Department of Nature Conservation

Heritage Consent Heritage Resource Agency

Bokpoort – Regulatory Permits

Financial Challenges• Significant investment tickets dictate large number of financing parties

• Limited pool of operational partners

• Scale of debt against average ticket size and number of banks in SA

• Perceived level of technology risk

• Scale of forex and interest rate swap

• EPC balance sheet

• O&M balance sheet

Why Develop CSP?• Commercially proven storage capability

• Only large-scale renewable energy technology able to satisfy the peak demand profile in South Africa

• ‘Less developed’ SS market and high level of local content presents an opportunity for SA to participate meaningfully in supply chains

• Solar resource in SA

• Less competitive than PV and Wind

• Scale benefits

Thank you