26
KUDU POWER PROJECT MAY 2014
KUDU POWER PROJECT
MAY 2014
UPDATE ON THE POWER SUPPLY
SITUATION IN NAMIBIA
May 2014 2
Short-Term Supply initiatives planned for 2012-2017
o The following initiatives are being investigated to address
the anticipated power supply shortage during 2012 – 2016:
1) Increase imports from the region
2) Possible refurbishment of the Van Eck Power Station,
3) Possible refurbishment of Ruacana Unit 1, 2 & 3,
4) IPP projects: solar, wind & biomass
Kudu remains the long-term flagship
power generation project
for NamPower and Namibia.
May 2014 3
0
200
400
600
800
1000
1200
Low Demand +Reserve
High Demand + Reserve
May 2014 4
Namibian Forecast Demand (including Reserve) and Firm Power Station Capacity
0
200
400
600
800
1000
1200
Hydro
Coal
Kudu Firm
STCS & Renewables
NP Small Thermals
Firm Imports
Ruacana Firm
Low Demand +Reserve
High Demand + Reserve
Namibian Forecast Demand (including Reserve) and Firm Power Station Capacity
May 2014 5
PROJECT PROFILE
May 2014 6
Power Station developers/partners:
NamPower: 51%
CEC Africa 30%
Strategic Equity Partner: 19%
Location of power plant: Uubvley (25km north of
Oranjemund)
Technology: CCGT
Power Output: 800MW (nominal)
Main Off-taker: NamPower
Secondary off-takers: Zambia & South Africa
Overview: Downstream Structure
May 2014 7
Kudu Gas Field developers (owners):
Namcor - 54% (in the process of securing a carry partner)
Tullow Oil - 31%
ITOCHU - 15%
Location of gas field: 170km off-shore
Proven reserve: 1.3tcf (trillion cubic feet)
Off-taker of the gas: KuduPower (Pty) Ltd
Overview: Upstream Structure
May 2014 8
Location of Kudu Power Station
May 2014 9
Gas Field – Power Station scheme
10
Gas pipeline route
May 2014 11
Kudu Gas field reserve & location
Water depth : 170m
Reservoir depth 4400m
170km from shore
Deterministic GIIP estimates (tscf):
EA GCA
Proved 1.38 1.45
Probable 3.28 2.72
Possible 9.92 7.12
May 2014 12
Upstream
Namcor (54%)
Tullow Oil (31%)
ITOCHU (15%)
Downstream
800 MW CCGT Power
Station
KuduPower (Pty) Ltd
(NamPower + Partners)
Gas
Sales/Supply
Agreement
Power
Purchase
Agreements
NamPower
Domestic supply
Power Export
Agreements
May 2014 13
Kudu commercial structure
4
Kudu Project Commercial Arrangements
NamPower& other
equity partnersLenders
Shareholders A
greement
Financing A
greements
O&
MA
greement
Operations and Maintenance
Company
OEM & EPC Contractor
EPC & LTSA
Contract
Gas Sales/Supply Agreement
UpstreamParties
KuduPower NamPower
Power PurchaseAgreement
Regional Buyers
Power Export
Agreem
ent
Transmission Agreement(s)
Power to Namibia
May 2014 14
KUDU’S REGIONAL COMPETITIVENESS
May 2014 15
Kudu’s regional competitiveness
o Regional project comparison that was carried out indicates
that:
Kudu is forecast to cost approximately US$11-12c / kWh
which is competitive with any regional new build coming
on-stream by 2017/18,
Kudu’s technology is environmentally clean compared
to several regional coal projects planned,
it will be the first CCGT power station in the SADC
region, and the first CCGT of this size in Africa.
May 2014 16
Figure 4: Basic Cost Comparison
0
2
4
6
8
10
12
14
16
ITT (120MW) Maamba (300MW) Kafue Lower
(600MW)
Kudu
US
c/k
Wh
Transmission markup
Plant Gate Cost
Basic Cost Comparison (Zambian Projects vs. Kudu)
Source Copperbelt Energy Corporation: 2011
Indicative 2015 Tariffs
May 2014 17
Regional Pricing Forecast (Border Price)
May 2014 18
Regional Perspective of Pricing Trends
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
US
D c
en
ts/
kW
h
Average Electricity Price
2006
2007
2008
Forecast of Industrial Tariffs (2010 - 2020)
0
2
4
6
8
10
12
14
16
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Year
US
c p
er k
Wh
RSA
Zambia
•Low Tariffs but rising to cost
reflectivity
•Annual increases of 20-30%
•Driven by new investments
needed to meet growing
demand
Source Copperbelt Energy Corporation: 2011
May 2014 19
LATEST PROJECT UPDATE
May 2014 20
Update on Government support/guarantees:
o Engagement with Government on-going on:
o Shareholder (parent) guarantees,
o Policy & regulatory support for guaranteed tariff & protection
from impacts of future change of law.
o Africa Development Bank (AfDB) has been contracted by the
Government to advise it on how best to structure the
guarantees required for the project.
o Government has availed N$1.6bn during the 2014/2015 FY for
Kudu. Further funding support envisaged for the 2015/2016 &
2016/2017 FY’s.
May 2014 21
Procurement of additional equity partners
o Procurement of Strategic Partner(s):
The Joint Development Agreement (JDA) between NamPower
and CEC Africa was signed on 7 February 2014.
A JDA Steering Committee has been established to oversee the
development of the Kudu Power Project.
CEC Africa has committed to take 30% equity in KuduPower
(Pty) Ltd.
The remaining equity (19%) in KuduPower will be allocated to a
Strategic Equity Investor by the end of May 2014.
May 2014 22
Power Export negotiations
PXA Termsheet negotiations with CEC Plc was signed on 7 February
2014. The negotiations for the full PXA is expected to commence in
May 2014.
An additional of-take by Eskom for +-100MW is still being
negotiated.
Delays in progressing the negotiations with Eskom were largely due
to the new legislation on procurement of power from IPP’s and
imports from the region.
There has been high-level discussion with DoE in 2013, and there
seems to be positivism in advancing the off-take negotiations.
May 2014 23
Update on Kudu tenders
Kudu tenders that are under evaluation:
o EPC tender - evaluation completed
o Investor tender - evaluation completed
o Financing tender - evaluation completed
o O&M tender - evaluation nearly complete
All commercial agreements on the above expected to be
negotiated and concluded by June/July 2014.
May 2014 24
Indicative project timelines (2014 – 2018):
o Conclusion of all agreements: July 2014
o Final Investment Decision: July/Aug 2014
o Financial Close: Jan 2015
o Commencement of construction: 1st or 2nd Q 2015
o Commercial Operations Date (COD): 1st quarter 2018
o (36 months construction period)
May 2014 25
For more info contact:
The Kudu Project Office
Tel. +264-61-205 2221
Tel. +264-61-205 2214
Fax: +264-61-205 9221
E-mail: [email protected]
For attention: Mr. S. Muyenga-Muyenga
Project Coordinator: Stakeholder Management & Project Promotion
E-mail: [email protected]
Email: [email protected]
Website: www.nampower.com.na
May 2014 26
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