The document outlines Standard Bank's role and capabilities in financing power projects across Africa, highlighting its extensive presence in 17 countries and emphasizing its understanding of the region's infrastructure needs. It discusses challenges and requirements for successful private sector involvement in power projects, along with examples of ongoing projects the bank is involved in. The document serves to present Standard Bank as a key partner for financing and advisory in the African energy sector.

1. Financing Power Projects in Africa
Jeannot Boussougouth
Senior Manager: Energy, Utilities and Infrastructure
Investment Banking Coverage
Jeannot.Boussougouth@standardbank.co.za
Standard Bank
1 July 2011
UNECA 2011, Addis Ababa

2. 2
2
Contents
Section Page
1. Introduction 2
2. Standard Bank 4
2.1 Natural partner in Africa 5
2.2 Recent Accolades 6
2.3 Selected Infrastructure Credentials 7
3. Our African Infrastructure Understanding 10
4. Business and Financing Challenges 13
5. Requirements for Successful Private Sector Participation 16
6. Potential Financial Structure 23
7. Standard Bank’s Value Proposition 25
8. Case Study: Morupule B Coal Power Plant Financing 34

3. Private and confidential
Section: 1
Introduction

4. 4
 Standard Bank is the largest bank in Africa
– We are present in 17 countries across Africa (especially Sub-Saharan Africa)
– Our current market capitalisation is USD 24.77billion (11 January 2011) and our Total Assets are USD 182.6 billion (June 2010 Interims)
– We are 20% owned by ICBC (the world’s largest bank)
– In most African countries, Standard Bank operates as an integrated corporate and investment bank
 The purpose of today’s presentation is to :
– Introduce Standard Bank to the audience in terms of our offering, capabilities and strengths in Africa
– Highlight business and financing challenges in the African power space
– Highlight Standard Bank’s proposed financing solutions, including ECAs
– Highlight some of the most attractive power projects in Africa
Introduction

5. Private and confidential
Section: 2
Standard Bank

6. 6
On-the-ground presence in 17 African countries
 Nearly 150 years of experience in Africa
 Largest bank in Africa
– Over 40,000 employees in Africa
– Over 8,000 bank branches headquartered in
Johannesburg
 Growth on the continent is a key strategic focus area
 Investment banking presence across the region and in key
markets strengthened by recent acquisitions:
– IBTC Chartered Bank, Nigeria
– CFC Bank, Kenya
– Recent banking licence awarded - Angola Standard Bank
Angola (33.3 million)
Botswana (1.8 million)
DRC (63.6 million)
Ghana (23.1 million)
Kenya (34.7 million)
Mozambique (20.3 million)
Lesotho (1.7 million)
Malawi (12.8 million)
Mauritius (1.2 million)
Namibia (2.1 million)
Nigeria (154.7 million)
South Africa (47.4 million)
Swaziland (1.1 million)
Tanzania (37.8 million)
Uganda (27.6 million)
Zambia (14.6 million)
Zimbabwe (13.1 million)
Most comprehensive network in Sub-Saharan Africa
Key points
Standard Bank: Natural partner in Africa
On-the-ground
presence in 17
African countries
Unrivalled
knowledge of sub-
Saharan Africa
through on ground
presence
Strong product
teams in
Johannesburg,
Lagos, Nairobi and
London

7. 7
Recent Accolades
Global Finance Magazine – 2009
 Best Africa Investment Bank (2009)
 Best Africa Research Team (2009)
 Infrastructure Deal of the Year for Gautrain (2008)
Africa Investor – 2009
 Best Investment Bank in Africa (2010)
 Best Investment Bank in Nigeria (2010)
 Best Bank in South Africa (2010)
 Best Equity House in Africa (2009)
 Lakatabu Expansion - Africa Industrial Deal of the
Year (2009)
 MTN Uganda - Africa Telecoms Deal of the Year.
(2009)
 Zain - Middle East Telecoms Deal of the Year
(2009)
Euromoney – 2010, 2009
The Banker – 2010, 2009, 2008
 Deal of the Year Africa: Bonds (2010)
 Deal of the Year Africa: Capital Raising (2010)
 Deal of the Year Africa: Structured Finance
(2010)
 African Bank of the Year (2009, 2008)
 Bank of the Year, South Africa (2009, 2008)
 Best Investment Bank from Africa (2009, 2008)
 Best Bank in Botswana, Lesotho, Malawi,
Swaziland , Tanzania (2009)
 Deal of the Year for the Ruashi Copper Mining
Project in DRC (2008)
 Deal of the Year - Botswana for National
Development Bank BWP100 million 11.25% notes
due 2017 (2008)
 Deal of the Year - DRC for the Ruashi Copper
Mining Project (2008)
 Deal of the Year - Finland for Talvivaara Nickel
Project US$320m debt facility (2008)
 Deal of the Year - Germany for Kreditanstalt fur
Wiederaufbau NGN28.7 billion 8.5% notes due by
2011 (2008)
 Deal of the Year - Tanzania Electricity Supply
Limited TZS300 billion syndicated loan (2008)
 Deal of the Year - Zambia Sugar Project (2008)
 Deal of the Year (South Africa) for the 20%
investment by ICBC in Standard Bank (2008)
 Deal of the Year Award - Bahrain for Arcapita
Bank US$1.1b syndicated Murabaha facility
(2008)
 Most innovative in Trade and Project Finance
(2008)
 Ranked No 1 in sub-saharan Africa and No 106 in
The Banker Top 1000 World Banks (2008)
Standard Bank has won various awards that demonstrate our capabilities across the entire range of advisory and funding services in Africa
EMEAFinance – 2009, 2008
 Best Investment Bank in Africa (2009, 2008)
 Best Investment Bank in Nigeria (awarded to
Stanbic IBTC Bank) (2009)
 Best Natural Resources Deal in EMEA:
Kayelekera Uranium project (2009)
 Best Oil and Gas Deal in Africa: Oando (2009)
 Best Project Finance Deal in Africa: Botswana
Power Corporation (2009)
 Best Project Finance House in Africa (2009)
African Banker – 2009, 2008
 Investment Bank of the Year, Africa (2009)
 Best Issuing House in Africa (awarded to Stanbic
IBTC Bank) (2008)
 Deal of the Year - ICBC 20% acquisition of
Standard Bank (2008)
Environmental Finance Magazine - 2009
 Carbon Finance Deal of the Year for Camco-
Standard Bank Structured Carbon Credits
Transaction (2009)
 Best Debt Bank in Africa (2009)
 Best Foreign Exchange Provider in South Africa
(2009)
 Best Investment Bank in Africa (2009)
 Best Investment Bank in Nigeria (2009)
 Best Investment Bank in South Africa (2009)
Key points
Euromoney: Best
Investment Bank in
Africa (2010)
African Banker:
Investment Bank of
the Year, Africa
(2009)
Africa Investor: Best
Africa investment
Bank (2009)

8. 8
 Ongoing – Scatec Solar, South Africa
Standard Bank has been mandated as Sole Financial Arranger and Underwriter, and BEE funding provider to Scatec Solar on its
various Solar PV project in the Northern Cape and Eastern Cape provinces of South Africa
 Ongoing – Solar Reserve, South Africa
Standard Bank has been mandated as financial advisor to Solar Reserve on its Solar CSP plants, using molten salt storage
technology, totalling [80-100]MW, in South Africa
 Ongoing – Confidential, Africa
Standard Bank has been mandated for a confidential Equity raise in Africa
 Ongoing – The Power Company/Built Africa, South Africa
Mandated as financial advisor for The Power Company/Built Africa [20]MW Solar PV Project, over several South African sites
 Ongoing – Gitson Energy, Kenya
Mandated lead arranger & financial advisor for Gitson Energy’s [300MW] Wind Power Project in Bubisa, Kenya
 Ongoing – Solar Capital, South Africa
Standard Bank has been mandated as financial advisor and main lead arranger for Solar Capital on its five Solar PV plants in the
Northern Cape
 Ongoing – African Clean Energy Developments, South Africa
Standard Bank has been mandated as main lead arranger for African Clean Energy Development (ACED) to develop a [400MW]
wind farm in cookhouse in the Eastern Cape
 Ongoing – CGNPC, South Africa
Standard Bank has been mandated as a financial advisor to China Guangdong Nuclear Power Corporation (“CGNPC”), China’s
largest Nuclear Energy company, in support of their bid to build South Africa’s potential nuclear power programme
 Ongoing – Just Energy, South Africa
Financial Advisor to Oxfam’s energy subsidiary, Just Energy, to develop [74MW] of wind farms in the Eastern Cape
 Ongoing – Italgest, South Africa
Standard Bank has been mandated as Financial Advisor to Italgest on its [100 MW] Solar PV project.
Recent Energy, Power & Renewables Credentials (1/3)

9. 9
 Ongoing – BHP Billiton, DRC
Mandated Transaction Advisor to BHP Billiton SA (Pty) Limited on the INGA 3 hydro-electric project concept study in the Democratic
Republic of Congo.
 Ongoing – Mphanda Nkuwa Hydropower Project, Mozambique
Financial advisor to the Mphanda Nkuwa consortium on the development of 1500 MW hydro electric project in Mozambique
 Ongoing – Anglo American, South Africa
Standard Bank has been mandated as the Financial Advisor to Anglo American’s [450MW] discard coal-fired IPP near Witbank
 Ongoing – SARGE, South Africa
Standard Bank has been mandated as the sole Project and Equity Raising Financial Advisor and Lead Arranger to the SARGE 50 MW,
Solar PV project in the Northern Cape, as well as 216 MW of wind projects
 Ongoing – Forest Oil Corporation, South Africa
Standard Bank has been mandated as Financial Adviser to Forest Oil Corporation in connection with the development of an
integrated [750-800 MW] natural gas to power project
 Ongoing - Oelsner Group Wind Farms , South Africa
Standard Bank mandated Financial Advisor and Lead Arranger to Oelsner Groups’ two wind farms being Kerrifontein (20.8MW) and
Langefontein (50MW)
 Ongoing – Confidential , South Africa
Standard Bank has been mandated as the sole Project and Equity Raising Financial Advisor and Lead Arranger to a SA renewable
energy company on a multiple wind farm project
 Ongoing – Volta River Authority, Ghana
Standard bank has been mandated as Financial advisor to VRA on the expansion of the Takoradi power plant
 Ongoing - Aldwych International, Kenya
Joint Lead Arranger for long-term financing to Aldwych International for the 300MW Lake Turkana Wind Project valued at US$760m
 Ongoing - Gulf Power, Kenya
Co-lead Arranger of the Greenfield 84MW Athi River HFO power plant developed by Gulf Energy
Recent Energy, Power & Renewables Credentials (1/2)

10. 10
 Ongoing – redcap, South Africa
Standard Bank has been mandated as the Lead Arranger for the Kouga Wind Farm project
 Ongoing - AMD Energia, South Africa
Standard Bank has been mandated as the Lead Arranger for Alt-E’s multiple solar PV projects
 Ongoing – Confidential, Africa
Standard Bank has been mandated as the Buyside Financial Adviser for the purchase of a power station
 Ongoing – Confidential, Africa
Standard Bank has been mandated as the Sellside Financial Adviser for the sale of a power station
 Ongoing – Aeolus, Kenya
Standard Bank has been mandated as the Financial Advisor and Lead Arranger to Aeolus Kenya Ltd on a 60MW wind farm project
 Ongoing – Electromaxx, Uganda
Sole Lead Arranger of the expansion from 25MW to 50MW of the Electromaxx HFO power plant facility
 2010 – Companhia Moçambicana de Hidrocarbonetos, S.A. (“CMH”), Mozambique
Standard Bank acted as FA and lead arranger to Companhia Moçambicana de Hidrocarbonetos, S.A. for the funding of its share of the project
costs for the expansion of the Central Processing Facility at the Pande and Temane fields’ reservoirs near Bazaruto
 2009 - Mmamabula Energy Project, Botswana
Mandated by CIC Energy for a 1200 MW coal fired power plant, coal mine and related infrastructure in Mmamabula, Botswana. Project size of
US$5 billion and mandated as co-lead arrangers for the ECIC covered ZAR tranche as well as the ZAR commercial facility.
 2009 – Eskom, South Africa
Standard Bank acted as the Mandated Lead Arranger in the Kusile Boilers contract. Standard Bank acted with 4 international banks in funding
the Euro 705 million contract over 12 years. Export Credit was also arranged with Euler Hermes (German ECA) over the foreign content of the
contract with Hitachi Power Europe.
Standard Bank – Recent Energy, Power & Renewables Credentials (3/3)

11. Private and confidential
Section: 3
Our African Infrastructure Understanding

12. 12
 Positive correlation between infrastructure expenditure and GDP
growth (Economic Research (Aschauer, 1989; Munnell, 1990) )
_e.g. through increased productivity, reduced logistics costs etc.
 Conversely, inadequate infrastructure is cited as a key constraint to
investment and growth (ADB, 2007)
 Therefore, the provision of quality infrastructure is a necessary
element of any strategy for economic integration and sustainable
development in Africa
 SSA requires $93bn/year in infrastructure investment to meet MDG,
(or around 15% of GDP)
 15 countries in Africa are land-locked, with 40% of the continent’s
population estimated to live in these countries
 Hence efficient cross-border transportation is vital for their
economic development
 However, the cost of trucking increases in Africa by between 684%
- 1560% due to poor road conditions, with 40% of food produced in
rural Africa degrading due to the lack of roads and bridges (Council
for Scientific & Industrial Research (CSIR))
 Opportunity 1: Potentially high economic returns to investment in
infrastructure, but requires better policy frameworks to attract
investment and align economic returns with investor risks/returns
 Opportunity 2: Although investment currently dominated by public
sector, there’s a strong shift towards private sector (IPP, PPP,
Corporate etc.).
African Context
African Infrastructure Context
Table 1: Overall Infrastructure Spending Needs for SSA
Key points
Inadequate
infrastructure is
cited as a key
constraint to
investment and
growth
SSA requires
$93bn/year in
infrastructure
investment to meet
MDG
Better policy
frameworks to
attract investment
required

13. 13
 Context:
 Investing in African power / infrastructure is not usually for the marginal player – more a specialist activity so less subject to
boom and bust
 Project lead times will likely take longer than the credit crunch/global recession, e.g. often 3 years plus
 Developer Perspective:
 Some cut backs in capital expenditure (e.g. focus on lower risk markets) but reduced bank financing capacity is a larger issue
 Financing Perspective:
 Ability of African banks to raise USD has been dramatically affected, hence a focus on local currency financings which caps
project size
 Current turmoil in the global credit markets has impacted on closings and increased borrowing costs. However, few clients have
walked away with more club deals seen. Limitation on banks’ liquidity/capacity BUT project finance less affected than most debt
financing classes
 Flight to ECAs and DFIs across all markets, not just Africa. Follow on question is their ultimate African appetite given competing
liquidity demands
 Supplier Perspective:
 Recent softening of forward-looking equipment prices but no dramatic plummet. Note most bail-outs encourage infrastructure
spending
African Infrastructure Characteristics
African Infrastructure Characteristics
Key points
On-the-ground
presence in 17
African countries
Ability of African
banks to raise USD
dramatically
affected
Flight to ECAs and
DFIs across all
markets

14. Private and confidential
Section: 4
Business and Financing Challenges

15. 15
 Opportunity Costs of insufficient electricity supply/electrification
– Cost of Unserved Energy: $1.50/kWh (IRP 2010), $10/kWh (Dept of Energy)
– Small Diesel Generator: $1/kWh plus
– OCGT Diesel turbines: 30c – 50c/kWh peaking power
– Subsistence charcoal: destruction of our forests
– Reality Check: the real developmental costs of delayed decisions!!...
 New Generation Planning
– A complete financial model not a shopping list of projects
– Should include interest during construction (IDC)
– As an indicator to politicians, regulators and consumers about what realities we face
– Greater certainty in future tariffs is key to funding new investments today
– Greater support to credit ratings of utilities (key to tapping current EM liquidity)
 Effective Domestic Wheeling framework
– Framework must be standardised and transparent for all arrangements
– Pricing and risk sharing should facilitate wheeling not prevent it
Key Issues
Business and Financing Challenges
Key points
High opportunity costs
of insufficient
electricity supply
Greater certainty in
future tariffs is
paramount
Effective domestic
wheeling framework
needed

16. 16
 Leveraging credit quality private off-takers
– Allocating risk to those that are able to best manage it
– Creating a domestic industrial/mining offtaker group. e.g. CEC Energy
– Innovative commodity risk management (commodity price indexation in loan terms)
– Allowing more private players on regional power pools (e.g. SAPP)
– Enables smaller countries to reduce burden on their utilities/Treasury
 Cross-border PPAs
– Chicken and Egg situation (smaller countries can’t build large projects alone)
– Mozambique’s Mpanda Nkuwa 1,500MW hydro project would benefit entire region but needs Eskom
– Challenge: CESUL line and Mpanda Nkuwa require back-to-back contracts
– Could a Mozambique coal IPP sign a private PPA with mine in SA or Zambia?
 Integrated Mining/ Power projects
– Reality check: new mining investment is key to our economies over next 20 years
– Using Diesel Generators cost GDP and jobs
– New quality creditors for power projects: Commodity Buyers
Key Issues (Contd...)
Business and Financing Challenges
Key points
Effective risk
allocating approach
Unrivalled
knowledge of sub-
Saharan Africa
through on ground
presence
Strong product
teams in
Johannesburg,
Lagos, Nairobi and
London

17. Private and confidential
Section: 5
Requirements for successful private sector participation

18. 18
 Finalise the enabling framework to allow and facilitate private sector participation in the power sector
– E.g. In SA. New Generation Regulations of August 2009 is a positive step, but market requires more clarity on process
(amongst several other issues)
– Rules on Selection Criteria for Renewable Energy Projects
 Market requires a bankable PPA (which allows for the appropriate risk allocation between the private sector and the buyer
(SOEs or any Integrated System Operators)). This should include such items as:
– A balanced liability regime
– Appropriate protections for the generation companies for risks not within their control
– A stablisation clause for changes of law
– Fair termination events for buyer and seller
– Appropriate termination compensation regime
– Clauses allowing for restructuring which may affect the buyer (e.g. unbundling of the Public utility)
 Government support required to stand behind buyer, in order to provide comfort to private sector (developers, equity
participants, lenders, etc.) that PPA availability payments will be made accordingly and termination provisions are fair (and
termination payments will be funded)
– E.g. In SA, if buyer is Eskom, NT support for PPA required as Eskom is already highly leveraged. Further PPA-type
commitments could negatively impact on Eskom’s balance sheet and current debt covenants. Risk that private sector not
prepared to enter into PPAs with Eskom without Government backstop
Overview
Key Requirements
Key points
Finalise the enabling
framework
Bankable PPA are
required
Government support
required to stand
behind buyer

19. 19
– If buyer is ISO, NT support required as will be newly formed company with no trading history. Private sector will require
Government backstop for new entity
– Cash-flow timing risk – monthly payments under PPAs versus collections from distribution companies (municipalities),
large industrial users and Eskom Distribution
 Market is looking for independent offtaker / buyer – e.g. Eskom is seen to be conflicted as a fellow generator and
somewhat higher risk creditworthiness
 Independent buyer is seen as key by private sector
 Independent systems operator has been a successful model in other jurisdictions, seen by the market in a favourable light
Overview (Contd...)
Key Requirements (Contd…)
Key points
Need for
independent offtaker
/ buyers
ISO has been a
successful model

20. 20
 The PPA grants the concession and sets the tariff. It is the primary document that the SBO would focus on. To some extent all
the others are secondary
PPA 101
Key Requirements (Contd…)
Key points
Grants the concession  Grants the concession - gives the project the right to
exist, and the right to generate electricity. Term
typically 20-25 years from completion of construction
Ownership  BOO or BOT
Sale and purchase of
Net Electricals
 Variable O&M costs recovered through the sale of the
net electrical energy dispatched
Sale and purchase of
capacity
 Generator (IPP) paid on the availability of net
dependable power capacity irrespective of despatch
sufficient to cover debt service, equity return and fixed
O&M
 Procurer (SBO) takes price and despatch risk
 Take or Pay
Indexation  Tariff payments may be indexed for inflation and
movements in Foreign Exchange rates
 Procurer may take inflation and forex movements
risk
 The responsibilities will be split
Specifications and
Performance Standards
of the Plant
 PPA sets out the responsibility of the Generator to
build by a given date a plant to very precisely
documented specifications, operating standards and
designs
 Generator / EPC Contractor takes the responsibility
and risk of building the plant to the requirements of
the Procurer
Revenue Write Down
provisions for non-
Performance
 PPA includes provisions to reduce the payments
payable to the Generator if the tested dependable
capacity at any time or the actual availability [or the
heat rate] is worse then the levels the Generator is
contracted to provide
 Generator takes performance risk
Delay LD’s for late
commissioning
 Delay LDs payable for late commissioning payable by
Generator/ EPC Contractor
 Generator takes risk of late commissioning
Performance criteria

21. 21
 The responsibilities will be split (Contd…)
PPA 101 (Contd...)
Key Requirements (Contd…)
Key points
Third party
responsibilities
Force majeure /
political events
Water and Power
Transmission
interconnections
 Generator would seek to make it an
obligations of the Procurer to design build
and commission all required water and
transmission linkages by an agreed date
and prior to scheduled testing
 Procurer takes responsibility for providing Water and Power
Interconnections
 The PPA sets out provisions for the Procurer to keep the
Generator whole and / or pay compensation if such
facilities are late
Supply of Gas / Coal / Fuel  In many markets, the Generator would seek
to make it an obligation of the Procurer to
supply Gas / Coal / Fuel (ie energy
conversion)
 Generator may take fuel / hydrology risk
assuming satisfactory pricing and supply
risks
 Procurer takes risk of fuel supply and pays deemed
commissioning if fuel is not available Generator takes
efficiency risk through an incentive penalty regime
Permits  PPA allocates responsibility for obtaining
permits
 Split between Procurer and Generator
Natural Force Majeure  PPA sets out provisions in relation to relief
of liability and the provision of insurance
(both damage and business interruption) to
mitigate Natural Force Majeure Risk
 (Lightening, fire, earthquake, accidents,
explosions, epidemics etc.)
 Insurance
Political Force Majeure  There are certain risks which are
uninsurable, political in nature and which
Generators will not accept and need to be
taken by the Procurer
 (Act of war, blockade, boycott, rebellion,
civil commotion, Change in Law and / or
unjustified failure to renew permits)
 Procurer Risk
 Payments of deemed commissioning [or termination buyout
if prolonged] or tariff adjustments to compensate for
additional costs or revenue losses

22. 22
 The responsibilities will be split (Contd…)
PPA 101 (Contd...)
Key Requirements (Contd…)
Key points
Termination
Termination
Water and Power
Transmission
interconnections
 Generator would seek to make it an
obligations of the Procurer to design build
and commission all required water and
transmission linkages by an agreed date
and prior to scheduled testing
 Procurer takes responsibility for providing Water and Power
Interconnections
 The PPA sets out provisions for the Procurer to keep the
Generator whole and / or pay compensation if such
facilities are late
Supply of Gas / Coal / Fuel  In many markets, the Generator would seek
to make it an obligation of the Procurer to
supply Gas / Coal / Fuel (ie energy
conversion)
 Generator may take fuel / hydrology risk
assuming satisfactory pricing and supply
risks
 Procurer takes risk of fuel supply and pays deemed
commissioning if fuel is not available Generator takes
efficiency risk through an incentive penalty regime
Permits  PPA allocates responsibility for obtaining
permits
 Split between Procurer and Generator
Termination  The Agreement will stipulate the Events of
Default, cure periods and the termination
regime
 In the event of termination due to Procurer default, the
Procurer is obligated on request to purchase the plant for
an agreed sum that covers debt and probably an equity
return
 In the event of termination due to Generator Default, the
Procurer has the right but not the obligation to purchase the
plant but for a lesser sum covering only debt
Credit Support  In the event of termination due to Procurer
Default and a purchase price being payable
then lenders may seek some form of
backstop credit support in respect of the
payment to be made, typically in the form of
a payment guarantee
 It is a matter of commercial negotiation as to whether SBO
would be required to provide such a backstop. It may be
possible to structure without

23. 23
 A number of different tariff structures are feasible – in this document we have focused on the most commonly used structure:
‘Availability’ payment structure
 The RFP for an IPP tender will specify the tariff structure which bidders must adhere to and will form the basis of payments to /
from the Project Company (Generator) and the offtaker (Procurer)
 Each bidder will be invited to bid a number of Charge Rates
– Occasionally charge rates can be firmly fixed and bidders would have to target LEC (Levelised Electricity Cost) based on an
Asset Value (Brownfield)
– Lower charge rates however may not always equate to better value for money for the procurement Authority
 For an availability driven tariff, payments will typically be split between Capacity and Output
– Capacity Payments are designed for recovery of all the fixed costs of the plant, including debt service, taxation, equity return
and fixed O&M costs. Typically deductions for non-availability and / or poor plant performance would be netted off against these
capacity payments
– Outputs Payments recover the variable operating costs of the plant and may also include an adjustment for fuel consumption
 In the case of a merchant plant or ‘Take or Pay’ agreement, the tariff structure is much simpler. Revenue = Plant Output (MWh)
* Market Price (ZAR/MWh)
Tariff structure – integral component of PPA
Key Requirements (Contd…)
Key points
Service Payment
Capacity Payment
Base capacity component Fixed O&M component
Output Payment
Fuel adjustment
payment
Variable O&M payment
Availability payment
structure
Bidders would have
to target LEC
Payments typically
split between
Capacity and Output

24. Private and confidential
Section: 6
Potential Financing Structure

25. 25
Financing Structure
Coal Mine Co
IPP
PortCo
RailCo
Utility/Single Buyer
Commodity Offtaker
PPA
Discard coal
Mine or
SmelterCo
Security of supply
for Coking Coal
Offtaker
Sale of coal to
local industry
and smelters
Potential Financing Structure
 Leveraging credit quality of end-users
– Mines
– Smelter or Steel mill
– Commodity offtakers
 Unlocks the Chicken/Egg problem
– Facilitates investment in interdependent power, port and mining infrastructure
at same time
 PPP basis
– Private sector partnerships with public electricity, rail and port utilities
– But reduces investment, guarantee and operations burden on
utilities/Treasury
 Standard Bank can facilitate:
– Advisory
– Bring in foreign partners
– Debt Funding
– Commodity Risk Management

26. Private and confidential
Section 7:
Standard Bank’s Value Proposition

27. 27
Our Project Advisory and Finance Services
Standard Bank’s Value Proposition: Robust Project Advisory/Finance Services
 A Standard Bank team of about 70 project finance specialists (based in Johannesburg, Lagos, Nairobi, London, Beijing, and
Sao Paolo) provides advisory and arranging services to government and private sector clients on limited recourse projects
 Our experts come from diverse disciplines, are knowledgeable in a variety of sectors and have an understanding of local
regulatory frameworks and financial market constraints
 Our project finance team is able to work closely with other areas of our banks to create customised solutions that draw on
sector and product expertise from across the banks
Strong
Multi-Disciplinary
Team Structure
Project Finance
Services
Excellent
Relationships with
DFIs and ECAs
 Standard Bank can act in any one or a combination of the capacities of financial advisor, arranger and underwriter of senior
debt, mezzanine debt and equity for all large capital projects. Our project finance services include:
– Project evaluation and feasibility studies
– Financial modelling and sensitivity analysis
– Risk evaluation and risk mitigation strategies
– Advice on the structure of project contracts
– Taking an active role in negotiations
– Financial structuring
– Foreign exchange risk mitigation techniques
– Arranging of multi-source funding, including development finance and export credit financing
– Arranging and underwriting bank financing
 We have established excellent relationships with development finance institutions, multilaterals and major credit export
agencies having closed numerous project financings with them across a range of emerging markets
 Standard Bank Group is an Equator Principle Financial Institution, having adopted and integrated all 10 of the Equator
Principles which relate to Project Finance

28. 28
Selected Experience with DFIs
Standard Bank’s Value Proposition: Experience with DFIs
Transaction Year Amount DFIs involved SB Role
Pulkovo AirportExpansion Project Current EUR1.2bn
EBRD, IFC, DEG, NIB, BSTDB,
EDB
MLA and Bookrunner
Lake Turkana Wind farm project,Kenya Current
EUR450m
AfDB,DEG, FMO, Proparco
Mandated co-arranger
and lender
Petromax Power Project,Bulgaria Current Undisclosed EBRD Advisor, MLA
Nairobi Northern Corridor Concession,
Kenya
Current Undisclosed
IFC, DEG, FMO, IDC, AfDB,
PAIDF, EAIF
Advisor
Guinea Allumina Project,Guinea Current US$2.8bn AfDB,EIB, IFC Advisor
Lekki-Eppe Expressway PPP 2008 US$300m AfDB Advisor and Lender
Monastir & Enfidha airportconcessions,
Tunisia
2008 €562m
EIB, AfDB, IFC, OPEC,
PROPARCO
Arranger and
Underwriter
Eleme Petrochemicals Company Ltd,
Nigeria
2007 US$125m IFC Arranger
Federal Grid Company, Russia 2007 RUB5.0bn EBRD Arranger
Empresa Nacional de Hidrocarbonetos de
Moçambique,Mozambique
2007 ZAR1.08bn EIB, MIGA Arranger
Chelyabinsk Tube Plant,
Russia
2007 €145m EBRD Arranger
RusHydro,Russia 2006 RUB6.3b EBRD Co-Arranger
Pervouralsk New Pipe Plant,Russia 2006 €115m EBRD Arranger
INDORAMA
INDORAMA

29. 29
Selected Experience Working with ECAs
Standard Bank’s Value Proposition: Experience with ECAs
Transaction Year Amount ECAs involved SB Role
Lake Turkana Wind farm project, Kenya Current EUR450m EKF, SACE Co-arranger and lender
Nord Stream Pipeline Project Current EUR3.9bn Hermes, SACE Arranger, lender
Kusile Power Project, South Africa Current Undisclosed Hermes TBC
Mmamabula, Botswana Current Undisclosed ECIC, China Exim MLA
El Boleo Project, Mexico Current US$1.2bn US Ex-Im, EDC, KDB Advisor, lender
Guinea Alumina Project,
Guinea
Current US$5.0bn COFACE, China Exim and ECIC Club participant and
arrangerof ECIC tranche
Kolwezi Copper Cobalt Mine, DRC Current Undisclosed EDC, EFIC and ECIC Club participant and
arrangerof ECIC tranche
Mozal Aluminium Project,
Mozambique
Current Undisclosed COFACE Club participant and
arrangerof ECIC tranche
Federal Palace Hoteland Casino,
Nigeria
2008 US$167m ECIC Lead arrangerand
underwriter
Akwa Ibom Power Project, Nigeria 2006 US$60m US Exim, ECIC Club participant and
arrangerof ECIC tranche
Empresa Nacionalde Hidrocarbonetosde
Moçambique,
Mozambique
2006 ZAR1.08bn ECIC Arranger
Sasol Natural Gas Project, Mozambique 2004 ZAR 2.5bn SACE and EFIC Lead Arranger and
underwritter
Kansahi Copper project,
Zambia
2004 US$120m ECIC Arranger

30. 30
 An Export Credit Agency (“ECA”) is typically a government agency or parastatal organisation. Its goal is to promote its domestic
industries and to foster economic growth through the provision of financial support to exporters.
 This is most often achieved by providing political and commercial insurance cover or loan guarantees to banks.
 A financing solution incorporating an ECA represents one of the most attractive financing solutions where there is a cross-
border movement of capital goods and/or services.
 Given the general decrease in available liquidity and risk appetite for emerging markets and emerging market assets, the
significance and importance of ECA supported funding has increased.
 ECA backed funding is especially beneficial in transactions requiring a longer tenor, large amounts and for higher risk grade
countries.
 Repayments can be “stretched” to match future cash flows, not country limit constraints
 Lower interest rates and competitive USD funding, eg Libor + 2.50% for ECIC-backed financing from South Africa
 Alternative source of funding (not tying up all credit lines with Standard Bank)
Export Credit Agencies
Advantages of an Export Finance structure
Standard Bank’s Value Proposition: Export Finance Solution (1/4)

31. 31
 If a client or its subsidiary is sourcing capital goods and services from a supplier in South Africa, Standard Bank can provide an
Export Finance backed term loan which is partly guaranteed by the ECIC.
 A lending rate of LIBOR + 2.50% is payable by the Borrower under the South African Export Finance scheme and an ECIC
premium for political risk insurance and commercial risk insurance is also payable by the Borrower.
 The ECIC premium (for the provision of political and commercial cover) may be payable up-front as a lump sum payment or
payable over the drawdown period or annualised over the tenor of the loan.
 The premium is determined by a number of factors including country, tenor, drawdown schedule, repayment profile and the
security package relating to the loan.
Mechanics
USD term loan
(plus hedging if
required)
Borrower
Equipment supplier
eg in South Africa
Standard Bank
ECA
eg ECIC from South Africa
Insurance cover
exported equipment
Standard Bank’s Value Proposition: Export Finance Solution (2/4)

32. 32
 The principal objectives of the ECIC are:
– to facilitate and encourage South African export trade by underwriting bank loans and investments outside the country, in order
to enable foreign buyers to purchase capital goods and services from the Republic; and
– to provide investment insurance to South African companies investing in assets offshore.
 Unlike a number of other export credit agencies (such as EFIC for instance), ECIC does not lend directly to projects.
– ECIC provides insurance cover (100% Political and 85% Commercial Risk cover) to Lenders that are signatories to their Export
Credit Support Agreement and Standard Bank provides the liquidity.
 The ECIC have appetite for most countries in Africa and are mandated to cover countries around the world in general.
– Their appetite both in terms of number of transactions supported as well as quantum of support per transaction differs from
country to country.
– They are actively looking to diversify their insurance portfolio and are most keen on countries where they currently have low
levels of exposure.
ECIC
Standard Bank’s Value Proposition: Export Finance Solution (3/4)

33. 33
 Tied Export Programme
– The ECIC will support projects (under their “tied” export program) where there is an export of capital goods and services from
South Africa.
– ECIC will support 85% of the South African export contract (SA contract value) and will require the Borrower to make a down
payment of 15% of the SA contract value to the South African exporter.
– The minimum ECIC requirement for South African content is 50% of the value of the South African export contract.
– The ECIC provides insurance for credits of a minimum of 2 years and typically up to a maximum of 12 years (in the recent past
we have seen longer tenors).
Criteria to qualify for ECIC support
Standard Bank’s Value Proposition: Export Finance Solution (4/4)

34. Private and confidential
Section: 8
Case Study

35. 35
Case Study: Morupule B Coal Power Plant Financing
 Chinese partners: USD1.6bn coal-fired power plant, 600MW, built by Chinese contractor CNEEC, funding arranged by ICBC/Standard Bank
 Cost effective: The all-in cost of the whole project was USD 2.91m per MW (compared to USD4.5m per MW for the Kusile plant in South Africa)
 Single financial solution: Standard Bank and ICBC arranged a US$ 825mn loan for 20 yr, backed by a Botswana Ministry of Finance guarantee, Sinosure ECA 15
yr guarantee and the World Bank 15-20 yr guarantee. A US$ 140 mn bridge finance facility was provided by ICBC, guaranteed by Standard Bank. The BPC sells
power in Botswana Pula (BWP). Standard Bank swapped the BPC’s floating USD exposure to a fixed BWP exposure for the whole 20-yr period.
 Standard Bank’s expertise: Our local banking presence in Botswana, power sector expertise and deep relationships with Chinese partners allowed us to bring
together all the parties to present the Botswana Government with a single, quick and cost-effective solution to secure its domestic power supply.
Ministry of
Finance
Guarantee
Standard Bank
ICBC
BPC
ICBC
World Bank
Partial Credit
Guarantee
Sinosure
Guarantee
Standard Bank
$140mn $140 mn
Guarantee Bridge 9 month
Currency and
Interest rate hedging
$825 mn 20 year loan
16 – 20 year
15 year Political/
Commercial cover
Bridge

36. 36
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