Discussion Materials Overview of the Power Sector in South Africa

22 September 2015

Overview of the Power Sector in South Africa

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

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

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 765Substations Future

Substations Current

Lines Future

132

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

South Africa Renewable Energy IPP Programme Overview

REIPPP Overview

General REIPPP Requirements REIPPP 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

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 1,274 MW

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

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

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

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

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

● 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

Appendices

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

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 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