1. Financing sustainable
Infrastructure for the
Biogas to Energy Project
21 February 2012
Presented by
Maria Ncube : Financial Strategy Unit
Finance desk
Barney Kgope : Director Air Quality & Climate Change
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. The Joburg 2040 GDS paradigm 3
The 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. 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. 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. 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
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. 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 .