Another company that benefited from the Green Energy Efficiency Fund is a Cape Town based sportswear and leisurewear manufacturer of branded clothing under an international licence. The company is the first carbon neutral clothing manufacturer in South Africa Here, the fund, financed the installation of a rooftop grid connected solar PV system, which will provide 25% of the company’s annual energy requirements. Investment costs, including interest expenses will be fully covered by electricity cost savings with a payback period of ca 14 years and will result in 50 CO 2 tons/year of carbon emission reductions
IDC, through the Green Energy Efficiency Fund, provided a loan to South African Carbon Carbide (SACC), a leading producer of calcium carbide on the African continent. The company is based in Kwazulu Natal. The chemical, calcium carbide, is used in the desulphurisation of steel and the production of acetylene which is used in the welding industry. The loan will be used to finance the company’s investment in 4 co-generation units and a scrubber unit which will reduce the company’s reliance on grid supplied electricity and related costs The company will be able to meet 18% of the their annual energy requirements through this intervention Investment costs, including interest expenses will be fully covered by electricity cost savings with a payback period of ca 3.2 years and will result in 46,000 CO 2 tons/year of carbon emission reductions
Solar water heating systems are one of the most cost-effective uses of solar energy in South Africa as they replace more than 40% of electric heated water. The need for Solar Water Heating ( SWH) as an alternative to electricity for thermal application is thus undeniable . However, the SWH market in South Africa faces many challenges including high capital costs and affordability. To unlock these barriers to market penetration, IDC, through the Green Energy Efficiency Fund, provided finance to a financial intermediary who provides Solar Water Heaters (SWH) on a lease-to-own agreement to private households and commercial buildings (e.g. guest houses) Investment costs, including interest expenses will be fully covered by electricity cost savings with a payback period of each installed system being ca 8 years and will result in 2.8 CO 2 tons/year/system of carbon emission reductions
Jose Luis Bobes, Team Leader KfW Facility (GEEF), GFA Consulting GmbH & IDC
Green Energy EfficiencyOverview of Financed CasesJose-Luis Bobes, June 2013
South Africa: Energy Challenges• 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.COP17
Late2010201120122013• Market Launch of the R500M Green Energy Efficiency Fund(GEEF)-Aggressive marketing with Industry Associations & Partnership withEskomIDC and KFW sign loan agreement for €48M and €2. 1M TechnicalAssistance and Capacity Building GrantESCO Market Study published-access to finance barrier to entry17 companies financed at R174 million ( ca 35% of GEEF)69% of funds committed to SMEsMARKET SITUATIONConstrainedelectricity supplyand high pricesConstrainedelectricity supplyand high pricesAccess to financebarrier to EE/REinvestmentsAccess to financebarrier to EE/REinvestmentsRESPONSEIncreased demandfor ESCO servicesHigh cost of smallscale REdevelopmentIncreased demandfor ESCO servicesHigh cost of smallscale REdevelopmentHIGHLIGHTS/IMPACT8MW cogenSACC plant-45GWh/yr and46ktCO28MW cogenSACC plant-45GWh/yr and46ktCO2mass rollout of310GWh/34MWshowerheadsmass rollout of310GWh/34MWshowerheads60% ofcommittedfunding toESCOS60% ofcommittedfunding toESCOS27 FREEWalk throughaudits and 4investmentgrade audits27 FREEWalk throughaudits and 4investmentgrade auditsIndustrial EnergyEfficiencyIndustrial EnergyEfficiencyWHY GEEF: FINANCIAL ENABLERS:IDC impact
GEEF: Developmental and Environmental ImpactsCO2 TonsEquivalentAvoided383,445/yearEnergy saved386,930/year
Future Focus17Number ofDeals approvedProgramme supported by the German Cooperation and Development MinistryFutureR174mAmount committedcirca: 35% of R500mSWHEnergy Performance ContractsCogenerationWaste to EnergyVariable Speed DrivesRoof Top PVINDUSTRIAL ENERGYEFFICIECYAND SELF USE RE
Frequently Asked Questions about GEEF• Is GEEF compatible with Eskom IDMprograms?– Yes• Can GEEF finance the end user?– Yes• Do we have to pay for the GEEFEnergy Audits/TechnicalAssessments?– Depends• Are the loans in Euro or Rand?– Rand• Local Requirements?– Standard IDC strategy• Pricing is always prime -2%
Frequently Asked Questions about GEEF (II)• Can GEEF finance ESCOs?– Yes• Why should I get a loan if mycompany has enough capital tofinance from balance sheet?– Cost of capital• Will I get a loan even if I am (fillwhatever the mental barrier)?
Marketing ToolsConference Users ForumShare experiencesLearn from each otherProvide feedbackTarget Audience:ESCOsESCO clientsIndustry Workshops:Foundries, Plastics, Automotive..Remind the resources for your business:GEEF Brochure6 Funded Cases6 Industry Sector brochuresIndustry WorkshopEnergy AuditsGEEF Website:www.idc.co.za/development-funds/geef
Case Study 1: 25% Reduction in Grid ElectricityConsumption by Installing a Solar Photovoltaic (PV) System• A Cape Town-based company that producessport wear and leisurewear under license to aninternational brand.• The company has embarked on a project toinstall a grid connected (grid-tied) rooftop PVsystem to generate 25% of the company’s annualelectricity requirement“Electricity accounts for more than 90% of ourcarbon emissions and is a scarce resource thatis vital to the successful operation of ourbusiness. We are confident that the solarinstallation will generate between 30 – 40% of ourenergy requirement, thereby reducing our carbonfootprint, save money and improve oursustainability into the future.”William Hughes, MD, Impahla ClothingSector Textile IndustryRegion Western CapeGoals Reduced reliance on coalbased electricity from gridInvestments Solar Photovoltaic (PV)system – 30kW peakFinancialSavingsInvestment cost covered byenergy and cost savingsOtherBenefitsPositive image as aprogressive environmentallyfriendly companyCO2Reduction50 CO2 tons per annum
Case Study 2: 18% Energy Savings from Utilisation ofWaste Gas to feed a Combined Heat and Power (CHP) Plant• The chemical production company wants touse the waste gas as fuel for a 7.8 MW CHPplant to replace part of the power supply fromthe grid.• This results in 18% savings from using thewaste gas to feed the CHP plant.“The company spends close to R7-million onelectricity a month, and this new co-generation plant will cut this bill by about20%. The additional 8 MW capacity willenable the company to operate at fullproduction compared with the 70% capacitybecause of electricity constraints. „Claudio Siracusano, GM, SACCSector Chemical IndustryRegion KwaZulu-Natal/South AfricaGoals Reduced reliance on coalbased electricity from gridInvestments • 4 co-generation units• Scrubber plantFinancialSavings• Investment cost covered byenergy and cost savingsOtherBenefitsIncreased reliability fromown energy supplyCO2Reduction46,000 CO2 tons per annum
Case Study 3: More than 40% Savings in EnergyConsumption with Solar Water Heaters• A financial intermediary that provides Solar WaterHeaters (SWH) on a lease-to-own agreement toprivate households and commercial buildings.• Solar water heating systems are one of the mostcost-effective uses of solar energy in SouthAfrica as they replace more than 40% of electricheated water.“The Green Energy Efficiency Fund will enable usto roll-out Solar Water Heaters to at least 400households, by removing the challenge faced bymany clients in financing the high upfront costsof SWH.”Quinton Zunga, CEO, Solar NetworkSector Financial ServicesRegion GautengGoals Reduced reliance on coalbased electricity from gridInvestments Solar Water Heater (SWH) –lifetime of >20 yearsEnergySavings2,700 KWh per annum (avg)FinancialSavingsInvestment cost covered byenergy and cost savingsOtherBenefitsPositive image due to carbonfootprint reductionCO2Reduction2.8 CO2 tons per annum persystem
Thanks!Visit: www.idc.co.za/development-funds/geeffor more information aboutGEEF: Green Energy Efficiency Fund
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