FUNDING OF ENERGY INFRASTRUCTURE ENERGY INDABA 2017 November 2017 - - PowerPoint PPT Presentation

FUNDING OF ENERGY INFRASTRUCTURE ENERGY INDABA 2017

November 2017

Business Overview

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BioTherm Energy (“BTE”) is the leading African renewable energy project developer with a focus on wind and solar power development

• BioTherm develops, finances, owns, and operates both wind and solar power plants to provide long-term clean

electricity in South Africa (“RSA”) and Rest of Africa (“RoA”)

BioTherm Snapshot

>3,000 MWs fully permitted, bid ready in South Africa

• >250MW’s of PPA’s in rest of Africa in the process of being secured
• Secured two of the largest private PPA’s in South Africa
• Attractive C&I portfolio with expansion into the off-grid sector

Over 9 GW under development

4 Solar PPAs Awarded Zambia Winner of 34MW of Solar Projects Burkina Faso

Rest of Africa: Successes

Shortlisted in 20MW Solar PV Bid Ghana Shortlisted 250MW wind and 200Mw solar Egypt 27 MW Klipheuwel Wind Project

• W. Cape

South Africa: Projects In Operation

11 MW Aries Solar Project N.Cape 11 MW Konkoonsies Solar Project N.Cape 4.2MW PetroSA Waste Gas Project W.Cape

South Africa: Projects Approaching Financial Close

120MW Golden Valley Wind Project

• E. Cape

45 MW Aggeneys Solar Project

• N. Cape

86 MW Konkoonsies II Solar Project N.Cape 33 MW Excelsior Wind Project W.Cape

Our presence across Africa – utility large scale projects

Outside of South Africa, BioTherm is increasing its footprint in the rest of Sub-Saharan Africa through ground mount and rooftop projects.  BioTherm has been awarded projects in:

 Burkina Faso: 2 solar projects (38 MW), FC in Q2 2018  Ghana: 1 solar project (20 MW), FC in Q2 2018  Both projects have been awarded a US$ 1m USTDA grant.

 BioTherm was also prequalified in the following countries:

 Ethiopia: 2 solar projects (200 MW)  Senegal: 2 solar projects (60 MW)  DRC: 1 solar project (100-200 MW)  Egypt: 1 solar project (200 MW) and 1 wind project (250 MW)  Ivory Coast: 1 solar project (25 MW)  Cameroon: 2 solar project (25 MW)

 Countries where greenfield/direct negotiations are taking place:

 Ghana (60 MW)  Zambia (80 MW)  Mozambique (30 MW)

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Operational plants/ awarded projects Countries where BioTherm is prequalified Greenfield / direct negotiations

Funding of Energy Infrastructure in Africa

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 Our continent needs close to $300bn of investment in energy to fuel development.  To attract any form of investment into energy infrastructure, be it from local investors or

foreign direct investors, ensure that we hold all stakeholders to account

 Ensure that investments in Africa’s energy sector does not enrich the few at the expense

• f the many. In short, broaden the shareholder base with active participation while

ensuring that there is a obligation towards skills transfer and job creation.

 Huge emphasis on clean energy to meet 2030 Climate targets but a balanced energy

mix is the ideal solution

 In 2008, only 6% had access to electricity – 4x growth in under 9 years.  RDC – Development of energy infrastructure as one of 6 pillars in its Vision 2020 – a

detailed and well implemented strategy framework through partnerships.

Opportunity is ripe A balanced energy mix Broaden the shareholder base Rwanda

Opportunities to grow the economy

 Civils  Electricals  Local Assembly (learn from our motor industry – BMW in particular)  Services Industry  Legal  Technical  Operations and Maintenance  Avoid manufacturing of complex equipment – focus on components that can serve multiple markets  Focus on job creation rather than local content targets  But to ensure a thriving local industry, policy certainty is a must

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 Electricals  Export Opportunities for locally produced or assembled products  Services industry  Developer/IPP’s

Domestically Regionally

Constraints

 Policy:

 must be long term in nature,  must be implemented in succession and with consistency  “stop start” strategies kill local supply chains  Requires buy in at the highest levels with implementation frameworks that form part of the National Development Plan

 Skills:

 Invest in relevant (and transferable) skills development – this should not be an

• bligation on just the private sector, government must work with the private

sector to implement well funded training programs  South Africa lacks a risk taking/entrepreneurial environment. Use of grant mechanisms/match funding  Develop local capacity to attract foreign direct investment (not the other way around)  Skills transfer should be an obligation and not just a commitment. 7

Typical Project Model

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Project Company Joint Lenders EPC Consortium O&M Contractor Governments regulator Developer/IPP Investor Two Investor One Financing Documents Debt Funding EPC Contract Maintenance & Availability Guarantee Agreement AM Service Agreement Construction Management & O&M Agreement PPA Agreement Distribution Agreement Distribution Direct Agreement PPA & IA Direct Agreement Electricity public utility 40% 100% 60% PPA & IA Direct Agreement

Equity Debt Development Capital – risky!!

Funding as a constraint

 Funding:

 Development is costly – huge sunk costs before you see any returns.. Ideally suited to those with large balance sheets – to create and grow a local developer supply chain, invest in people.  BUT there is no shortage of capital for a well developed project.  Manage both lender and equity investor expectations.  Targeting the lowest tariff does not solve for all of South Africa’s problems especially when we want to promote inclusive growth, skills development, and job creation. It all comes at a cost. 9

The unknown successes of REIPPPP

 Job Creation  Socio Economic development  Enterprise Development  Management control  Skills Development

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BioTherm Energy Group Building 1 Ground Floor Design Quarter, Leslie Ave East Fourways, 2055 South Africa Email: jnyker@biothermenergy.com Tel: + 27 11 367 4600 Website:

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