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executive mba oil & gas - project finance - eskom renewable energy project

executive mba oil & gas - project finance - eskom renewable energy project

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  • 1. PROJECT : Eskom Renewable Energy Project Sere Wind FarmCountry : Republic of South Africa Sarjeevan Sainbhi 20104006
  • 2. ___________LOCATION Western Cape Province, 2 km off the coastline of the Atlantic OceanSarjeevan Sainbhi 2
  • 3. About Eskom____________________• Eskom is a South African electricity public utility, established in 1923 as the Electricity Supply Commission by the government of South Africa.• Eskom generates approximately 95% of the electricity used in South Africa and approximately 45% of the electricity used in Africa. Sarjeevan Sainbhi 3
  • 4. Sere Wind Project Objective_______________ Increased renewable energy supply  Avoidance of greenhouse gas emissions CTF-leverage investments in renewable projects  Job creation  Sarjeevan Sainbhi 4
  • 5. Project DescriptionTARGETS:• 700 MW by 2013 & 3100 MW by 2019• Job Opportunities: 140 direct jobs and 1371 indirect jobs during construction and additional 10 jobs during operation.• Reduction in 0.44 million tons of CO2.• Increased Renewable Energy supply to 219 GWh Sarjeevan Sainbhi 5
  • 6. Project Schedule Sarjeevan Sainbhi 6
  • 7. Sarjeevan Sainbhi 7
  • 8. The estimated cost of the Sere wind project does notinclude the forward cover. Sarjeevan Sainbhi 8
  • 9. 1 UA = 1.5619 US Dollar Unit of Account Unit by which value of a thing is accounted and compared. Sarjeevan Sainbhi 9
  • 10. Project FundingAfrican Development Bank (AfDB) : USD 45millionCTF through AfDB : USD 50 millionWorld bank (WB) : USD 90 millionCTF through WB : USD 50millionAgence Française de Développement (AFD) : USD 130 millionEskom : USD 10 millionTotal Cost : USD 375 million Sarjeevan Sainbhi 10
  • 11. Funds Approval Process Due Diligence report by AfDB & IBRD in 2010 Application to CTF for Funding Approval in 2010Committee Approval of CTF Allocation of USD 350 Million in 2011The Agence Française de Développement (AFD) driven by CTF to leverage financing. Late June 2011, AfDB will co-host the Climate Investment Funds2011 Partnership Forum & showcasing Sere wind farm as flagship projects Sarjeevan Sainbhi 11
  • 12. BORROWER : Eskom Holdings SOC Ltd.EXECUTING AGENCY : Eskom Holdings SOC LtdProject type : Investment loan. Sarjeevan Sainbhi 12
  • 13. Sarjeevan Sainbhi 13
  • 14. Sarjeevan Sainbhi 14
  • 15. CONTRACTUAL PLANSImplementation arrangements :• Eskom, a wholly-owned government entity, will be solely responsible for implementing all components of the project.• Eskom will the sole beneficiary of the loan, which will be guaranteed by the Government of South Africa. Sarjeevan Sainbhi 15
  • 16. CONTRACTUAL PLANSProcurement arrangements• Works, goods and consulting services will be procured in accordance with the Banks Rules.• Jointly financed components and activities will be procured in accordance with the IBRD’s procurement guidelines and the IBRD’s standard bidding documents will be used. Sarjeevan Sainbhi 16
  • 17. CONTRACTUAL PLANSThe EPC contracts proposed for joint financingare as follows:– AfDB, jointly with the IBRD & the AFD will finance the procurement of an EPC contract for the Sere Wind Facility, consisting of the supply and installation of wind turbines and generators, a tower and other equipment. Procurement will be carried out through prequalification under International Competitive Bidding. Sarjeevan Sainbhi 17
  • 18. CONTRACTUAL PLANSFinancial management, audit , reporting &monitering :– The project’s financial transactions will be managed by the project implementing agency (Eskom) within its existing set-up: namely, the Finance Division and the Group Capital Division, under the overall management of Eskom’s Board of Directors Sarjeevan Sainbhi 18
  • 19. Recommendations________________• Waiver of the rule for Procurement of Goods & services as per Bank’s Rules and Procedures in connection with the EPC contract that are subject to joint financing arrangements.• The estimated cost of the Sere wind project should include the forward cover. Sarjeevan Sainbhi 19
  • 20. Thank you Sarjeevan Sainbhi 20

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