Financing a sustainable transport system

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  • Onika: Cover letter, photo’s Speak Syl - fees, act, underwriting, David? Cynthia – table and copy to review
  • Onika: Cover letter, photo’s Speak Syl - fees, act, underwriting, David? Cynthia – table and copy to review
  • Financing a sustainable transport system

    1. 1. Financing sustainable Infrastructure for the Biogas to Energy Project 21 February 2012 Presented by Maria Ncube : Financial Strategy Unit Finance deskBarney Kgope : Director Air Quality & Climate Change
    2. 2. Background 2• The City of Johannesburg (CoJ) covers about 9.7% of the to total land surface area of the Gauteng Province (16 927 km 2).• Population of ~ 10 451 713 (Community Survey 2007).• Generates 16% of South Africa’s GDP, employs 12% of the national workforce, and houses 74% of national head houses.• CoJ economy projected to grow by approximately 5% per annum over the next decade.
    3. 3. The Joburg 2040 GDS paradigm 3The Paradigm has defined four inter-related drivers namely: • Human and social development; • Inclusive and productive economic growth;• Environment and services Each of these concepts are interrelated in a (including the sense that they may support the achievement related of resilience, sustainability and liveability infrastructure); and 3 • Governance
    4. 4. Flagship Sustainability Projects 4 Waste to Energy plant: 500,000 tons per year facility (PPP underway) Rea Vaya Bus Rapid Transit (BRT) extension NMT master plan: city-wide bike path system Household rollout of solar water heaters Landfill gas to energy – 5 landfill sites (PPP underway) Wastewater biogas project
    5. 5. Biogas to Energy 5– City has 5 major waste water treatments facilities that already in some cases have biodigesters installed as sunk costs– Joburg Water faces a R120m ($16m) annual electricity bill.– Electricity tarriffs have gone up by 25% for 3 years in a row and are expected to increase annually at 8-12% for the next 10 years– Joburg Water can become 85% self-sufficient in the production of energy from biogas at its wastewater facilities
    6. 6. Other benefits from the Biogas Project 6 – Source of Renewable energy – Reduction of GHG emissions – Soften the impact of increasing power costs – Long term savings in electrical power costs – Payback of capital invested over a relatively short period of time
    7. 7. Project Financing Requirements
    8. 8. Funding Shortfall for 3 plants: R350 million / 46.7 $m 8 Northern Works 450 million liters per day Refurbish digesters + heating +mixing R100m 3 x 1 MW engines R 30m Biogas container R 10m Total R 140m ($ 18.7m) Goud koppies 140 million liters per day Refurbish digesters +heating +mixing R70m 2 x 300 kW engines + 2 x 750 kW R 40m engines Biogas container R 10m Total R 120m ($ 16m) Olifantsvlei 250 million liters per day Refurbish digesters +heating+mixing R40m 2 x 300 kW engines/ 2 x 1 MW R 40m Biogas container R 10m Total R 90m ($ 12m)
    9. 9. Key Financial Indicators 9 Ratio’s Benchmark Target for Adjusted Actual as at 2012/13 Budget Dec 2011 2011/12 Current ratio 1:1 0:91:1 1:1 0:73 Debt: Own Revenue (Excluding grant funding ) 40-45% 40% 45% 48% Debt to equity 0,50 0,56 Interest: Expenditure <7% 5% 5% 7% An increase on long term debts will affect the City’s debts to revenue ratio .
    10. 10. Legal requirements 10 Municipality Financial Management Act (MFMA ) requirement . Chapter 6 ,section 45 -51 .
    11. 11. 11THE END 11

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