Rafikh Ismail Industrial Development Corporation


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Overview & Opening Address

Rafikh Ismail, Senior Account Manager, Green Industries SBU, IDC

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Rafikh Ismail Industrial Development Corporation

  1. 1. Industrial Development Corporation11 June 2013Showcase of Successfully Financed IndustrialEnergy Efficiency ProjectsImproving Competitiveness of South African Industry ThroughEnergy Efficiency ProjectsRafikh IsmailSenior Account Manager
  2. 2. Contents PageIntroducing the IDCSouth Africa’s Energy MixGreen SBUFocus AreasConclusion
  3. 3. The Industrial Development Corporationo Established: 1940o Type of organisation: Development Finance Institution (DFI)o Ownership: South African Governmento Main business area: Providing funding for entrepreneurs andprojects that are contributing to theindustrialisation and job creationo Geographic activities: South Africa and the rest of Africao Products: Wide range of custom financial products to suit a project’s needsincluding debt, equity, guarantees or a mixture of theseo Stage of investment: Early stage (feasibility), commercialisation, expansiono Project development: Identification and development of projects adding tothe industrial base* At R6.90 per US$
  4. 4. Corporate ProfileThe IDC’s Head Office in Sandton (Johannesburg)Provides financing to entrepreneurs engaged incompetitive industries and enterprises based onsound business principlesPays income tax at corporate rates and dividends tothe shareholderThe vision of the IDC is to be the primary source ofcommercially sustainable industrial developmentand innovation to the benefit of South Africa andthe rest of the African continentAims to maximize developmental and financial returnswithin an acceptable risk profile
  5. 5. IDC in action
  6. 6. Growing the Green EconomyThe development of Green Industries in the Green economy is becoming a key focusarea for development in South Africa and especially the Industrial DevelopmentCorporation of South Africa (IDC).IDC has been at the forefront in supporting industrial growth anddevelopment in South Africa since its inception in 1940. Morerecently, IDC adopted a pro-active approach in developing thegreen economy and specific focus and effort has been given togreen industries and technologies. The objective is to develop,grow and invest in green industries focusing on investments toenhance the environment, support carbon emission reduction,avoidance and adaptation.
  7. 7. Investment in the Green EconomyThe IDC’s role in growing the Green Economy would be through investments in:1. clean production,2. clean energy,3. energy efficiency,4. demand side management interventions,5. emission and pollution mitigation,6. waste reduction and7. bio fuels.A value chain approach will apply with the emphasis on industrial development(including localization) and job creation.
  8. 8. TransitionChallenges:Carbon intensity;Natural resource management;Unemployment;Economic concentration;Competitiveness; Protectionism;Operating environment.Current drivers:New Growth Path;Integrated Resource PlanIndustrial Policy Action Plan;National Climate ChangeResponse White Paper;National Development Plan.Opportunities:Amongst best solar resources;Wind energy potential;Biodiversity;Economic diversification throughinfant industries;Job creation;Up-skilling of workforce;First mover advantage.Green Economy transition in SA
  9. 9. Contents PageIntroducing the IDCSouth Africa’s Energy MixGreen SBUFocus AreasConclusion
  10. 10. South Africa: Current Market and Energy Situation• Since the South African economy largelyrelies on coal reserves for electricity, manyopportunities exist for Renewable energy(RE) and Energy Efficiency (EE)improvements.• Currently, future energy supply is notexpected to be sufficient to match theanticipated demand, and increased pressureon price and energy security, force industryplayers to focus on green initiatives (mainlyRE and EE).• Recurring power outages since early 2008have highlighted the fact that electricitygeneration is unable to keep pace withdemand. In the light of adversity comesIn the light of adversity comesIn the light of adversity comesIn the light of adversity comesopportunity!!!opportunity!!!opportunity!!!opportunity!!!
  11. 11. South Africa’s Current Energy Mix• The South African(SA) economy isdominated by energyintensive industry.• SA is also one of thelarger emitters of CO2in the world. This isprimarily due to thefact that 86% of itselectricity generationis coal based.Eskom Installed Generation CapacityMWCoal 37755 MWOCGT 2426 MWNucler 1930 MWConventionalHydro 600MWPumped Hydro1400MWWind 3MW
  12. 12. South Africa’s Integrated Resource Plan (IRP2010)According to the IRP2010 atotal of 19 GW of overallelectricity will begenerated from RE,estimated to cost closeto R500bn over the next20 years up to 2030(close to R100bn overthe next 5 years).IDC’s targeted investmentover the next 5 years isR25bn (includingmanufacturing of greencomponents for greenindustries).Future Generation Plannedby 2030Coal 6300 MWOCGT 3900 MWNucler 9600 MWHydro 2600 MWCCGT 2400 MWWind 8400MWSolar PV 8400 MWCSP 1000 MWDriving opportunities to developthe Green economy from anenergy generation perspective
  13. 13. Contents PageIntroducing the IDCSouth Africa’s Energy MixGreen SBUFocus AreasConclusion
  14. 14. Green Industries SBU:FocusEnergy efficiencyEnergy efficiencyHeat,Electricity& buildingefficiencyCleanerproduction /IndustrialEfficiencyTransportEfficiencyWaste to EnergyFuel Based EnergyFuel Based EnergyCo-generationEmission and pollution mitigationEmission and pollution mitigationAir pollutioncontrolWasteManagement/RecyclingCleanstovesBio FuelsBio FuelsBio Ethanol Bio DieselRenewable Energy: Non-Fuel PowerRenewable Energy: Non-Fuel PowerWind PowerGenerationConcentratedSolar PowerSolar PhotoVoltaic PowerServices relatedto renewableenergy & energyefficiencyServices relatedto renewableenergy & energyefficiencyLocalmanufacturingrelated torenewableenergy & energyefficiencyLocalmanufacturingrelated torenewableenergy & energyefficiencyHydroEmerging Industries!
  15. 15. Fuel BasedEnergy12% EnergyEfficiency4%RenewableEnergy76%Biofuels8%GreenPortfolioR10,4 bnR7.5 bnR1.4bR422m16 ProjectsExposure R620m20 ProjectsExposure R185m3 ProjectsExposure R193m20 ProjectsExposure R1.5bnGreen Industries SBU:Portfolio
  16. 16. Contents PageIntroducing the IDCSouth Africa’s Energy MixGreen SBUFocus AreasConclusion
  17. 17. IDCTotal Investment -R631mTotal Round1 & 2InvestmentR74.7bnTotal Investment –R16bnTotal Investment –R24bnTotal Investment –R34bn6%94%IDC32%68%SOLAR PV WINDCSP HYDRO8%92%IDC22%78%IDCRenewable Energy:IDC’s participation
  18. 18. Energy Efficiency:Current reality & IDC focusIndustrial energyefficiencySolar waterheaters &heat pumpsLighting Solar PVrooftop –self useEnergy servicingcompanies(ESCOS)IDC focus areasReluctancein themarket isdue to:EE notbusiness asusualUncertainty: Lack ofawarenessCapital ExpenditureRequired – notnecessary budgetedforRelatively LowTariffs comparedto internationalbenchmarksEE SolutionIncentives –ThoughRebates,PerformanceContractingFunding :Concessional ratesavailableMarket andTechnologyAwareness• EE is simply the process of doing more with less energy.• EE is globally accepted to be 3 times cheaper than traditional coal firedpower stations and is quicker to implement and achieve immediate savings.
  19. 19. Energy Efficiency:Green SBU industry participationParticipationon the Inter-DepartmentalGovernmentSWH ProjectSteeringCommitteeR4.7Bn Approvedfor the Roll out ofSWH to achievethe 1 million SWH– 2012 BudgetSpeechLocalisation:Designation donethrough DTI forSWHSAIA : SouthAfrican InsuranceIndustry proposalto get all electricalgeysers replacedwith EnergyEfficientAlternativesKnowledgeSharingandCapacityBuildingPresenting to :1. German Chamberof Commerce PVConference2. SAPVIA : PVAssociationPresentationsCarbonconference:Greentech 2012SAEEMany otherindustryparticipationeventsWorkshops arranged:-GEEF Conference on Funded Case-National Foundry Network-National Cleaner Production Centre-Plastics Association of South Africa-Irrigation and Pack-housesInternal SBU awareness andintegration:- Energy and Carbon ImpactAssessment Tool-All Regional Offices trained onGEEF and EE/RE- 9 SBUs and PIMD
  20. 20. Fuel Based Green Energy:IDC focusCo generation Waste toenergyBiogas WasterecyclingAir pollutionIDC focus areasMeat to MarketJan KempdorpSACC
  21. 21. Renewable Energy:Opportunities in the rest of AfricaMOZAMBIQUE-hydroNAMIBIA-hydroBOTSWANA-solarKENYA-wind, geothermalUGANDA-biomassTANZANIA-hydroZAMBIA-hydro, solarSWAZILAND- biomass, hydroD.R. CONGO- hydroETHIOPIA-windZIMBABWE-hydro, solarSENEGAL-solarMOROCCO-wind, solarKey challenges:• Political instability• No clear PPA frameworkand process• Project cost• Grid connection• Lack of strong projectpartners & developers
  22. 22. Conclusion• Pro-active approach to develop Green Industries• Renewable energy• Energy efficiency• Fuel based green energy• Emission and pollution management• Bio fuels• As well as localisation opportunities• Focus on early phase project development;• Develop specific funding interventions;• Support and development of an emerging industry at various level.• Value chain approach with an objective to develop a long term sustainableindustry.
  23. 23. Day Month YearThe Industrial Development Corporation19 Fredman Drive, SandownPO Box 784055, Sandton, 2146South AfricaTelephone (011) 269 3000Facsimile (011) 269 2116E-mail callcentre@idc.co.zaThankYou!AnyQuestions?RAFIKH ISMAIL+2711 269 3297+2776 984 9893rafikhi@idc.co.za