Adams Solar PV Project

18/02/2014 NERSA PUBLIC HEARINGS 18/02/2014 NERSA PUBLIC HEARINGS

Northern Cape PV Project 82,5MW

ADAMS SOLAR PV PROJECT PUBLIC HEARING KIMBERLEY 18 FEBRUARY 2014

18/02/2014 NERSA PUBLIC HEARINGS 2

PREFERRED BIDDER IPPID RE_PV_0006_004

Adams Solar PV Project Two (Pty) Ltd 2012/114124/07 Preferred bidder in REIPPPP Round 3 Registered address: No. 3 Atherstone Bower, 77 King Edward Road, Lombardy East 2090 Johannesburg, South Africa PO Box 2005, Edenvale 1610

Tel:

Alternative:

Email:

071 299 1468

072 261 6601

[email protected]

PROJECT COMPANY General information

18/02/2014

18/02/2014 NERSA PUBLIC HEARINGS

COMPANY STRUCTURE: SPV, EPC and O&M Contractors



THE SPONSOR COMPANY OVERVIEW Enel Green Power South Africa BV

A subsidiary of Enel Green Power SpA, the Renewable company of Enel SpA the biggest Italian Electricity Group

Established in 2013, specifically for participation in the Third Bid Submission Phase of the Department of Energys IPP-Renewable Procurement Programme

Awarded in the Third Bid Submission Phase for 6 Renewable Projects (4 PV and 2 WIND) > 500 MW

Participating in Upington PV Project (Northern Cape) awarded during the Second Submission Phase, currently under construction

Focused on long term presence and complex business plan in South Africa



Italy&Europe

Capacity: 4,112 MW Production: 15.3

TWh Technologies:

North America

Capacity: 1,679 MW Production: 4.9 TWh

Technologies:

Iberia & Latin America

Capacity: 2,898 MW Production: 8.5 TWh

Technologies:

Capacity by technology

Production by technology

1. Reported capacity as of September 30, 2013. Reported production latest twelve months 2. Including co-generation

Geo Hydro Wind Biomass Solar

2

Total = 8.7 GW

30%

9%

57%

3% 1%

2 2

Total = 28.7 TWh

39%

20%

38%

1% 2%

2 2

ENEL GREEN POWER GLOBAL PRESENCE September 2013


Presence in 40 countries Installed capacity 97,800 MW Annual production

296 TWh EBITDA 16.7 Bln Customers

61 million Employees

73,700 Capex 2013-17 27 Bln

ENEL TODAY An international energy operator

Data as of 31.12.2012.

Stock exchange Enel is listed on the Milan stock exchange (~1.33 mln shareholders). 14 companies of the Group are listed on Milan, Madrid, Mosca, New York stock exchanges and in other Latin American countries

6


THE SPONSOR COMPANY OVERVIEW Enel Green Power South Africa BV

The primary investment vehicle of the Royal Bafokeng Nation (RBN), a community of approximately 150 000 Tswana-speaking people in South Africas North West Province

Established in 2006 as a community-based investment company

Holding assets across the mining, financial services, infrastructure, oil and gas services and industrial sectors

Looking for stable and long term growing investments



LOCATION OF THE PV PLANT

The Adams Solar PV project is situated in the Northern Cape Province, 21 kilometers south of Hotazel and 39 kilometers north of Kathu along the R380 tarred road joining these two towns, on the farm Adams 328. The site adjoins the tarred road to the east, while Mamatwan manganese mine (owned by the BHP Billiton mining group) occurs west of the tarred road and open pit excavations occur roughly 2 kilometers west of the site

Latitude 27 22' 13.32" S` Longitude 23 05' 52.36" E

Use: Insert Classification

18/02/2014 9 NERSA PUBLIC HEARINGS

PV PLANT GENERAL TECHNICAL INFORMATION

Address: Farm Adams, Number 328, Portion 0 Kuruman RD, Joe Morolang Municipality Total Area: 275 ha Generation type: Solar Photovoltaic Plant (PV) Expected Commissioning: August 2016 Planned Capacity: 82.5 MWp DC Estimated annual output: 167 GWh average over 20 years Specific Output: 2032 kWh/kWp/annum CO2 Saved: 150981 tons/year Coal Saved: 40000 tons/year

PV Module Technology: Thin Film Mounting Structure: Fixed ground mounted 14 x 3

portrait tilted at 20, oriented at 0N



PV PLANT SITE & GRID CONNECTION 1/2

The proposed construction of a line from the Project site to the Dougnor substation was dependant on the construction of a second line between the Dougnor Substation and the nearby Ferrum-Umtu 132kV line. This second line has been delayed and therefore it will no longer be possible for Adams Solar PV 2 to supply into the Dougnor substation. As a direct consequence the solution as presented in the Cost Estimate Letter is no longer feasible. The new solution under consideration involves the construction of a Switching Station adjacent to the Ferrum Umtu line. A line of roughly 700m between the on-site transformer and this switching station will be built. Eskom proposes this as a Self-Build project.



Dougnor Station 132kV/32kV

New Ferrum-Umtum OHL ADAMS PV PLANT

Switching Station

PV Plant Step Up

700 m OHL between Step-Up

and Switching Station

PV PLANT SITE & GRID CONNECTION 2/2


LIST OF PERMITS

Permit Status Comments EA Granted Date: 28/03/2013

Civil Aviation Granted Date: 17/06/2013 Heritage Consent Granted Date: 20/04/2012 Consent for Subdivision of Agricultural Land

Expected Mid March

Currently drafting approval letter

Consent for Site Access Granted Date: 12/07/2013

SKA Approval Granted Date: 19/07/2013

DMR Consent Granted Date: 28/11/2012

LCC (Land Claim Consent) No Claims Date: 13/08/2012 Water General Authorization Submitted To be obtained prior to Financial Close Consent to Change Land Use - Rezoning

Granted Approved by Municipality (22/01/2014)

Building Plan Approval Pending To be obtained prior to Financial Close


FINANCIAL INFORMATION

Construction Operations Start date 01-Jul-14 01-Aug-16 Duration 25 months 20 years End date 31-Jul-16 31-Jul-36

TIMING

Capital Costs % of Total Modules 37.2% BOP 58.1% Land Acquisition 0.2% Development Costs 2.5% Connection - Eskom 0.3% Connection - EPC 0.6% Scada (BOP - Movable) 0.1% Engineering costs 0.1% Safety costs 0.9%

Socio Economic Development 0.1% TOTAL 100%

CAPEX SUMMARY AND DRAWDOWN PROFILE

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

01-J

ul-1

4 01

-Aug

-14

01-S

ep-1

4 01

-Oct

-14

01-N

ov-1

4 01

-Dec

-14

01-J

an-1

5 01

-Feb

-15

01-M

ar-1

5 01

-Apr

-15

01-M

ay-1

5 01

-Jun

-15

01-J

ul-1

5 01

-Aug

-15

01-S

ep-1

5 01

-Oct

-15

01-N

ov-1

5 01

-Dec

-15

01-J

an-1

6 01

-Feb

-16

01-M

ar-1

6 01

-Apr

-16

01-M

ay-1

6 01

-Jun

-16

01-J

ul-1

6

ZAR

cos

ts

Cumulative Capex Spend

13


KEY TENETS OF IMPACTFUL ED

1. Learn from Historical Lessons

Involve community from the beginning

Plan for worker demobilisation

2. Compliance Is Threshold, Development Is Target

3. Give The Communities Voice

4. Recognise Existing Assets: Leverage Resources

5. Legacy achieved only through Sustainability

14


JOB CREATION

Sub-Elements Compliance Obligations

Construction Jobs

Operations Jobs

Beyond Compliance

South African Citizens 93.34% 4 973pm= 414 jobs

17 320pm= 1443 jobs

Youth and women ensuring representation via EPC contractors

Black Citizens 78.06% 3 449pm= 287 jobs

15 180pm= 1265 jobs

On-site apprenticeship for unskilled labour

Skilled Black Citizens

56.24% 463pm = 39 jobs 3 500pm= 292 jobs

Demobilisation strategy that will focus on post-construction education (bursary)

Local Citizens 61.81% 2 472pm = 206 jobs

12 280pm= 1023 jobs

On-site training for O&M phase (diploma programmes)

15


Sub-Elements Compliance Obligations Beyond Compliance

Key Components 51,87% Early identification of key suppliers- WOV, QSEs, SMES, local suppliers

Local supplier Chain Support- formalisation & record keeping

Educate SMMEs & WOV about RE Opportunities

Marketing: Cross-project linkages despite different EPC/O&M

LOCAL CONTENT

16



BBBEE 77,04% Early identification of key suppliers- WOV, QSEs, SMES, local suppliers

QSE 17,7% Local supplier Chain Support- formalisation & record keeping

Women Owned Vendors 5,26% Educate SMMEs & WOV about RE Opportunities

Marketing: Cross-project linkages despite different EPC/O&M

PREFERENTIAL PROCUREMENT

17



Black People 100% 100% Black top management

Women 50% Skills development in key areas to grow IPP specialisation

Working with willing BEE partners to become true Energy Service Providers

MANAGEMENT CONTROL

18



Beyond Compliance

Enterprise Development Contributions

0,6% Invest in ED during construction to leverage project opportunities

Develop local industry to respond to the infrastructure needs of the sector & beyond

Connect local enterprises to national & global value chains

Create community-based development professionals

Measure Impact, not just accounting for expenditure

ENTERPRISE DEVELOPMENT

19



Beyond Compliance

Socio-Economic Development Contributions

1,5% First SED project to be implemented during construction phase to avoid delayed social benefit

Link skills development to enterprise opportunities to ensure post-qualification demand

Measure Impact, not just accounting for expenditure

Build a local development institution with research, fund-raising and project management capabilities

SOCIO-ECONOMIC DEVELOPMENT

20


45 Participants in focus groups drawn randomly from various

communities

5 Semi-Structured Interviews with leaders ranging from Black

Farmers Union to Govt. LED Officer

Community Priorities: 1. Health Care 2. Education

3. Jobs on existing infrastructure & mining projects

IDP Priorities: 1. Water & Sanitation 2. Road Maintenance 3. LED- SMME Dev

Results of Primary & Secondary Data

Analysis

SOCIO-ECONOMIC NEEDS ASSESSMENT

21


Key Beneficiary Communities Tlapeng

Tsineng

Matoro

Magobing

Dinokaneng

Magojaneng

Tsineng-Kop

Masankong

Mokalanoga

Kanana

Gasese

Gatshekedi

Maipeng

The PRA Tools also revealed the

relative development status of each

community

DEFINING THE COMMUNITY

22


Construction Phase Targeted Need

Agricultural exchange programme Agricultural skills Transfer & Social Cohesion

Enterprise Development Developing SMMEs to become procurement ready

Operations Phase (first 5 years) Targeted Need

Community-Owned Jobs Fund Job Creation & Bridging work experience gap

ENELSI Training programme Developing construction workers skills

Starting Chance: ECD Addressing education from developmental phase

SMME Support Technical and financial support for new and existing entrepreneurs

Community Healthcare Developing NGO capacity to deal with diagnostic health services & mental wellness

PROGRAMMATIC RESPONSE

23


A training programme to develop technical skills in solar photovoltaic, solar PV installation and general business management

1. Basics and advanced elements of electricity & solar photovoltaic

2. How to set up and manage an enterprise

3. Business plan of a solar PV installation

4. Client relationship management

Key Outputs

Trainees will be capable to deliver solar photovoltaic installations throughout South Africa.

Graduates to set-up and manage small businesses individually or as small groups.

Long-term Vision

EGP franchising network for rooftop installations

Preferential procurement for EGP Programme Graduates

ENEL GREEN POWER Flagship training programme

24

ADAMS SOLAR PV PROJECTPUBLIC HEARINGKIMBERLEY18 FEBRUARY 2014Slide Number 2COMPANY STRUCTURE: SPV, EPC and O&M ContractorsTHE SPONSOR COMPANY OVERVIEWEnel Green Power South Africa BVENEL GREEN POWER GLOBAL PRESENCESeptember 2013ENEL TODAYAn international energy operator THE SPONSOR COMPANY OVERVIEWEnel Green Power South Africa BVSlide Number 8Slide Number 9Slide Number 10Slide Number 11Slide Number 12FINANCIAL INFORMATIONKEY TENETS OF IMPACTFUL EDJOB CREATIONSlide Number 16Slide Number 17Slide Number 18Slide Number 19Slide Number 20Slide Number 21Slide Number 22Slide Number 23Slide Number 24

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Adams Solar PV Project

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