An Independent Transmission System and Market Operator (ITSMO) in SA - - PowerPoint PPT Presentation
An Independent Transmission System and Market Operator (ITSMO) in SA A dialogue hosted by Nedbank, EE Business Intelligence and JCSE at Wits University With opening keynote address by Public Enterprises Minister Hon. Pravin Gordhan DATE: Thursday
A dialogue hosted by Nedbank, EE Business Intelligence and JCSE at Wits University
With opening keynote address by Public Enterprises Minister Hon. Pravin Gordhan DATE: Thursday 15 October 2020 TIME: 12h00 to 14h30
Opening keynote by
Minister of Public Fnterprises
Presentation 1 by Mr Andre de Ruyter CEO of Eskom
Perspectives on the Independent Transmission and System Operator as an enabler for generation investment
André de Ruyter Eskom Group Chief Executive 15 October 2020 Nedbank/ EE/ JCSE Energy dialogue
Approximately 10 000 MW will be retired in the next 10 years resulting in additional strain on the system and the need for new generating capacity
5 Source: Generation shut down dates/ rates
600 2030 2020 2024 2023 2021 2022 2025 950 2026 400 2027 2028 2.000 2029 800 600 1.500 400 1.000 700 1.100
New generation capacity must be brought on line to replace retired assets
Shutdown rates per year (based on 50 year life) MW Hendrina Komati Kriel Grootvlei Arnot Camden Matla
While DMRE Bid Window 5 is welcomed, more capacity is needed to bridge the gap, even assuming no market growth
6
MW Peak demand
6
Options for new capacity Capacity conundrum PV Wind New coal Nuclear 18-24 months 24-36 months 10-12 years 12-15 years ➢ If demand reaches 34 000 MW, we will be constantly short of capacity ➢ DMRE gazetted Bid Window 5 will help to close the existing gap ➢ However, more capacity is required in the short term to replace retired capacity Technology Average build time ➢ New build timelines and LCOE limit the viable technology options to meet required generation capacity ➢ Renewable energy has load factor of 25% - 30%, so much more capacity has to be installed 28,000 10,000 11,000 2,000 Installed capacity UCLF 5,000 Other PCLF 46,000 Reliable supply 34,000 LCOE1 2020 (c/kWh) 70.6 117 128.5 62.0
Source: Integrated Resource Plan (2019 ); EPRI ( 2017 NREL Annual Technology Baseline ( 2019 ); 1 CSIR, 2020 Systems analysis to support increasingly ambitious CO 2 emissions scenarios in the South African electricity system, system,” Technical Report, July 2020 1 LCOE is approximate
MW to retire 16,000 16,000 MW gap by 2030
7 Source: DEA/CSIR Wind & Solar, EIA & Applications
New RE will be built where the sun shines and the wind blows
1) Allocate RE to where available network capacity already exists to save on costs and time 2) Where applicable, upgrade and increase existing substation transformer capacities for IPP connections 3) Establish new infrastructure (substation and lines) to meet the IRP 2019 requirements in areas of interest with limited network capacity 1 2 3
Using existing transmission by repurposing old power stations will be done, but won’t fill the gap
The expansion of the Transmission grid will require significant funding support and project capacity
8
20,0 3,0 79,0 1,7 Definition phase 30,0 Concept phase 4,8 Execution phase 129,0 9,5 Total 24,8 80,7 33,0 138,5 Insights Transmission TDP PCLM summary 2020
Expansion Refurbishment # of expansion projects
65 52 48 165
X # of refurb projects X
204 43 358 605
Rbn
▪ Based on the network requirements, 4689km of power lines is expected from 2021 -2025 ▪ A further 3567km of power lines will be built from 2026- 2030 ▪ However, based on re- phasing and deferrals to beyond FY25 and due to Capex cuts, only 25% of required lines can be built in the next 5 years, and 62% in the following 5 years ▪ Capex cuts and shifting out projects creates an unsustainable Transmission environment due to: ▪ Unachievable line and transformer build rates ▪ Collapsing supply chain ▪ Increase in construction costs
Source: TDP 2020
Transition Finance Investment in green infrastructure / economies Divestment Pressure Green Finance Divestment from fossil fuel infrastructure / economies 2020 $
Transition and Green financing is readily available in the local and foreign market for Eskom to utilise
9 NOTE: Funding of the transition is aimed at implementing a shift from fossil-fueled based power generation to cleaner power generation and acquiring funds from investors that will enable the execution of such a transition
Numerous counterparties have indicated interest to support the Eskom JET “As discussed, we are interested to support Eskom on this important agenda” “AFD is keen to accompany Eskom in the decommissioning and repurposing of some of its coal fired power stations…” ”…we would like to express our interest to support Eskom in the repurposing of such coal fired power stations… ”…setting a clear timeline of our joint work on this project would be beneficial for both NDB and Eskom to understand expectations of the parties… Shifting financing landscape
finance and climate action circles is divestment from fossil fuels and increased funding for renewables
Such transition funding could also address the significant socio-economic challenges at a national level
10
Green energy can contribute improving investor attractiveness Repurposing coal plant means preserving socio- economic development Contribution to the Paris Agreement commitment Reduction in emissions improving air quality Job creation and upskilling due to higher localisation potential Create growth
Contribute to reigniting local manufacture RE technologies have shorter lead times, lower cost and will add generation capacity
Private investment in generation requires independence in transmission and market operation
Transmission Grid System Operator Market Operator Central Purchasing Agency
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Potential bias in:
(preference for maintaining lines connecting Eskom generators)
(scheduling outages that favour Eskom plant)
(preference for Eskom generators / customers for new connections)
(expanding network in areas supporting Eskom customers or generators) Potential bias in:
(curtailing non-Eskom plant in order to minimise cost impacts
(favouring Eskom generators in determining generator
(allowing Eskom plant to reduce capacity without penalty to avoid costs) Potential bias in:
(providing smooth access for Eskom generators and retailers to the market and limiting non- Eskom customers or generators)
(providing information to Eskom generators
advantage in the market) Potential bias in:
(providing Eskom generators priority in procurement of new capacity)
(imposing additional risks for non-Eskom generators that are not in play for Eskom generators)
and allocation (potentially increasing capacity requirements to favour new Eskom build)
however, strongly indicates that industry behaviour follows structure, and that implementing ex- post regulation is a second-best policy option to proper industry structure.
Eskom has started divisionalisation, as the first step towards its restructured end state
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and accountability to drive optimisation of the business capability
Divisionalisation deliverables Eskom Timeline1 1 Establishment of divisional boards and MDs appointed Mar 2020 2 Completion of “Functional Separation” ▪ Transmission ▪ Generation & Distribution Mar 2021 Mar 2021 3 Completion of “ Legal Separation”2 ▪ Transmission ▪ Generation & Distribution Dec 2021 Dec 2022
Notes: 1. Eskom timeline aligned with DPE. 2. Commencement of Legal separation is after functional separation. A number of the processes required for legal separation are outside of Eskom’s control.
J A S O N D J F M A M J J A S O N D J F M
Mobilise Programme Establish Governance Eskom Eskom Inter-Governmental Decision body Gov Business and Operating Development Business Model Eskom Operating Model Eskom Policy Framework Eskom Draft Policy Eskom Government Approved Policy Gov Rules Development Market Rules Esk/Gov Tariff Issues Esk/Gov CPA Rules Esk/Gov IPP Procurement and Long Term Planning Gov Government and NERSA Approval Gov Legislative Matters Detailed Review Gov Establish Legislation and Regulations Gov Regulatory Matters Design Regulatory Framework Gov Build Capacity NERSA Issue Licenses NERSA Operational Preparation Business Processes Eskom IT Support and Ring-Fencing Eskom Organisational Structures Eskom Business Transfer Create Shelf Company Eskom Asset Transfer ITSO Operations Transfer ITSO Staff Transfer ITSO Customer Transfer ITSO
Due Diligence
ITSO Who
Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22
Baseline Plan
Unconstrained - moving directly towards an ITSO
13 Eskom Activity Government/ NERSA Activity
1 2 3 4 5 6 7 8 9
multiple external dependencies,
external dependencies,
key policy, legislative and regulatory issues.
Baseline Plan: Key Dependencies
14
No Milestone Description
Inter-governmental decision body Establish an inter-governmental decision making body that will approve the proposed policy, market rules and general governance around the process Develop and approve Policy Approval of a detailed policy framework that will guide the form and rules of the market Develop and approve Rules Approval of the detailed Rules, Market Code, Pricing, Subsidies and Customer related matters Review of Legislative Requirements In line with the developed policy and rules, confirm the detailed legislative and regulatory requirements to be implemented Establish Legislation and Regulations As required, develop new
make changes to current legislation and regulations Design Regulatory Framework A revised regulatory framework to be developed by NERSA, aligned to the market rules and operations Establish Regulatory processes Sufficient capacity, skills and processes required to implement and regulate the new framework is NERSA and Eskom Issue Licenses Issue separate licenses to the different entities. Approve Contracts NERSA approval of the contracts between the Transmission Entity, IPP’s, Eskom Generation, Eskom Distribution and pro- forma customer contracts.
1 2 3 4 5 6 7 8 9
Accelerated plan: – Eskom TSO as Step 1
15 Preparation for Legal Separation Preparation for Eskom Based TSO Dec 2021 TBC Tx as Eskom Subsidiary ITSO Fully Operational Market Eskom Market Operator Policy, Legal and Regulatory issues Preparation for independent ITSO Dec 2022
▪ A phased approach will be more prudent to mitigate risk and delink dependencies ▪ Establish an Eskom subsidiary (TSO) as soon as possible
− Create a new legal entity and independent Board − Due diligence and transfer the assets − Formalised functional support contracts with Eskom Holdings − Engage labour and second staff prior to Sec 197 transfer
▪ Post creation of the subsidiary, finalise full
▪ Manage cost by sharing services ▪ Develop a fully operational market based within Eskom Holdings ▪ Legislative requirements will inform whether this market can be opened to external parties – participation may be voluntary ▪ Risks are mitigated as they are consolidated within Eskom Holdings ▪ In parallel, Government to initiate the development of policies, legislation, a regulatory framework, market rules etc. ▪ When the market rules are confirmed, make adjustments to the Eskom market in preparation for the ITSO ▪ Create the ITSO
Relinking Mar 2020
Alternate Plan - States Defined
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Eskom TSO (Phase 1) Eskom TSO (Phase 2) Independent TSO Create Eskom Subsidiary (Dec 21) Legal Status Capacitate Eskom Subsidiary (Dec 22) Create ITSO (TBC)
Market
position)
Market
Balance Sheet
Operations: Processes and Systems
processes (SLAs)
further ring-fencing done
enterprise systems Contracts and Pricing
systems
Staff
Regulatory / License
Day Ahead (Energy) Balancing (Energy) DA Reserves (Capacity) Capacity Energy hedge
Network services (access, transport, metering)
Market Operator Ancillary Services SO
services in the industry
in balance in order not to undermine the system integrity
Eskom’s position on the ITSO includes the future markets and the role they will play in the Energy trading industry
CPA
System
SO manages balancing of supply and demand on the Integrated Power System SO will produce ancillary services (from generation and demand response and dispatch) resources to manage balance Market Operator MO does not take ownership of the energy traded on the platforms - risks are related to the systematic failure arising from non-payment and can be dealt with through appropriate prudential requirements MO receives revenue based on participation charges and/or brokerage fees for transactions. Central Purchasing Agency (CPA) CPA takes ownership of energy (and capacity) purchased under legacy contracts, stranded investments and subsidy
price paid for energy and capacity relative to wholesale tariffs. The CPA is a transition mechanism to bridge from the current Single Buyer model to a competitive market Transmission Network Service Provider (TNSP) Transmission is responsible to provide network access for generators and consumers TNSP is responsible for expansion planning, maintenance and
HV network
Source: Eskom Transmission
Eskom and private sector can partner to achieve the goal
18
The investment programme to support new build could be partnering with various stakeholders
programme could be carried out by Eskom; financed by DFIs and
performance guarantees linked to milestone deliverables.
supported by partnership with independent power producers (IPP) that develop, construct,
generate renewable power for sale to utilities and end users.
(PPPs) to design, build, finance and maintain new facilities under long term contract with Eskom to be explored.
Division New build requirements Eskom IPP PPP Generation
Renewables acceleration Repurposing coal plants Repair & rehabilitation
Transmission
Strengthening & extension
Distribution
Network
Clear role Potential role – to be considered
Source: Team Analysis
While no silver bullet exists, embarking on a collaborative approach remains key to attracting investment, mitigating risk and creating new jobs
19
includes incentives, upgrades of infrastructure, improving labour relations and the issue of high-cost, low-skill labour
energy policy objectives
private entries into the generation market
exploration of a transition transaction
SIDZ, and REDZ to boost local development, manufacturing and economic growth Collaboration efforts
Presentation 2 by
UCT Graduate School of Business
Power Futures Lab
Graduate School of Business University of Cape Town
3rd Nedbank EEBI JCSE Webinar 15 October 2020
Eskom’s vertically-in integrated, monopoly ly str tructure is is obso sole lete
22
Operational benefits
distribution are very different businesses: latter is customer facing, former is fixing old kit
transparency
could return to investment grade and capital markets; generation business will need to be restructured
23
Transformation of the power market
platform for competitive procurement of least-cost power
being both a generator and single-buyer
sovereign guarantees
more diversification, competition and private sector investment
business model
24
Load shedding is the worst ever IRP2019 requires extra 27,400MW by 2030
An ITSMO is critical for accelerating new power investments
GWh
25
“Eskom is in crisis and the risks it poses to South Africa are great. It could severely damage our economic and social development
position South Africa’s power sector for the future, we shall immediately embark on a process for establishing three separate entities – Generation, Transmission, Distribution, under Eskom Holdings…..Of particular and immediate importance is the entity to manage an independent state-owned transmission grid combined with the system operator, and power planning, procurement and buying functions. It is imperative that we undertake these measures without delay…”
SONA 7 February 2019
26
20 months ago
27
Department of Public Enterprises (2019): Roadmap for Eskom in a reformed electricity supply industry – p31
a year ago
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During the transitional period, the following important matters will be managed around the establishment of a separate Transmission Entity:
for the TE, including its own Board.
well as the enactment of appropriate legislation through Parliament to enable the TE to be taken out as a separate state-owned company.
functions will be combined with the transmission and system
Department of Public Enterprises (2019): Roadmap for Eskom in a reformed electricity supply industry – p18
a year ago
29
Tx Eskom Holdings Generation SO/Buyer Dx IPPs Eskom IPPs Eskom Holdings Tx TSMO Eskom Generation Eskom Distribution
SO Planner Procurer Buyer
Divisionalisation (now) TSMO subsidiary (Dec 2021) ITSMO (when?)
IPPs Eskom Holdings Tx ITSMO Eskom Generation Eskom Distribution
SO Planner Procurer Buyer
We don’t have to define a power market end state yet : the ITSMO is a no-regret 1st step
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An ITSMO that enables a power system that is highly flexible, resilient and connected and optimizes resources
Source: EPRI
31
Department of Public Enterprises (2019): Roadmap for Eskom in a reformed electricity supply industry – p16
Benefits of ITSMO recognized. Now we need to get it done!
Power Futures Lab University of Cape Town
@AntonEberhard www.gsb.uct.a.za/mir
Presentation 3 by
National Planning Commission
3rd Nedbank EEBI JCSE webinar on: An Independent Transmission Grid System and Market Operator for SA 15 October 2020
Commissioner National Planning Commission Contact: info(at)miriamaltman(dot)com
The goal is to have an electricity sector that enables sufficient and reliable supply, that is financially and environmentally sustainable, at a competitive cost of service to underpin employment and growth, and that delivers affordable, accessible electricity to all who live in South Africa
system operations, planning, power procurement, purchasing and contracting functions within Eskom to be separated into an independent institution entirely (likely state-owned). It should be done in a way that ensures sustainability of the electricity supply sector, including that
Position Paper.
that where there are repeated failures in operational performance, or where fiscal and credit risk starts to
governance and financial underperformance continues, and organisational reforms are inadequate, structural reforms should be introduced. This means opening provision of the service or infrastructure to other economic actors besides the state and/or changing the structure of state ownership.
monopoly, global and local research motivates for an ITSMO on the following basis:
and to emerging technologies
suppliers that can contribute to achievement of least cost and lower risk
the fair treatment of other industry players (IPPs) in planning, grid connection and operations relative to self-owned generation assets.
Creating financially plausible conditions for IPP investment in current context
Creating plausible pathway for competition in generation, in context
demand? Can Eskom and/or SA govt offer guarantees required to
competition in generation and in other services?
enforcement and/or change in market structure
utilities in context of simple technology involving post and telephony
and competitive through value chain
wholesale operations
fibre roll out, put pressure on Telkom wholesale business
requiring accounting separation between wholesale and retail
in taking this separation further. Unlikely it would have happened without significant legal push
each business rather than protecting group interests
needed to drive that optimisation
Certainty in energy policy and energy mix. Control vs decisiveness Shareholder (state) commitment to a path Stability and quality of Eskom board and exec management, and right accountabilities Capacity in the state and in Eskom to “reform” Time. There is no quick fix. Recognise that this will take “3-5 years”.
NPC papers referred to are available at www.nationalplanningcommission.org.za/publications_reports Specific links are:
https://www.nationalplanningcommission.org.za/assets/Documents/Energy%20 Position%20Paper_.pdf
Eskom, Transnet and PRASA. June 2020. Available at: https://www.nationalplanningcommission.org.za/assets/Documents/NPC%20Po sition%20Paper%20on%20The%20Contribution%20of%20SOEs%20to%20Vision %202030.pdf
Genesis Analytics for the NPC. Dec 2019.Available at: https://www.nationalplanningcommission.org.za/assets/Documents/The%20rol e%20of%20state-
and%20inclusive%20growth.%20Paper%202%20Framework%20for%20the%20s uitability%20of%20state-owned%20enterprises.pdf
Presentation 4 by
Head, Energy Finance, Nedbank CIB
OCTOBER 2020
AN INDEPENDENT TRANSMISSION GRID SYSTEM AND MARKET OPERATOR (ITSMO) IN SA
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AN INDEPENDENT TRANSMISSION GRID SYSTEM AND MARKET OPERATOR (ITSMO) IN SA
Importance of a Credit Enhanced Off-taker
In addition to providing the majority of South Africa’s generation capacity, Eskom is also the single buyer of power in South Africa. Eskom established the Single Buyers Office (“SBO”) as the purchasing arm of Eskom responsible for PPA’s between Eskom and IPP’s under the various IPP Programmes implemented in South Africa. However, in order for the PPA’s to be Bankable, the South African Government has provided the necessary credit support. Without this Government credit support the South African IPP Programme/Private Sector Investment will not be achievable in the Power sector. IPP IPP IPP Generation Private Sector Eskom ITSMO Bankable Distribution Customer “Independent” ITSMO Investors and Lenders need to have confidence in the creditworthiness of the off-taker (ITSMO) for the duration of the 20-year PPA’s. The factors below can provide private sector sponsors and lenders with the necessary credit comfort, particularly over the longer term: Independence & Governance: The ITSMO should be an independent entity and the influence that Eskom (the parent company) can exercise over the entity should be limited:
Financial position: The ITSMO must be independent, have and maintain its own balance sheet (must be self funded) as well as have strong credit ratings. Until it has a proven track record, consideration should be given to credit enhancements from multilateral agencies to provide the initial credit support. These credit enhancements will be in place until a track record is established and a consistent investment grade rating is achieved. Transparency: The procurement process has to be transparent, fair, equitable and
power producers.
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AN INDEPENDENT TRANSMISSION GRID SYSTEM AND MARKET OPERATOR (ITSMO) IN SA
Financing Considerations
Although Eskom is the buyer of Power under PPA’s with IPP’s – these projects are bankable through the Government guarantees in the Implementation Agreement. This framework where Government provides credit support to all IPP’s in the form of guaranteeing the payments of Eskom under the long-term PPA’s. Given South Africa’s current fiscus, this model is unattainable as Government is not in the position to support these payment obligations. A new model has to evolve.
Government Support and Capital Adequacy
The creation of an Independent System Operator in South Africa, is key to ensure the IPP model is sustainable and successful. The ITSMO must be adequately capitalized at the outset in order to ensure that the ISMO is able to utilise it’s
balance sheet to support PPA’s. This may require Government support initially and , but as the ISMO builds reserves
time the Government support may no longer be required.
Long Term Planning and Power Procurement
The Government has recently Gazetted the procurement of over 11 813MW’s of Power in line with the IRP2019. In
for Financial Institutions, Project Sponsors and Developers to invest in the procurement of this Power, the “Buyer” under the PPA’s must be considered a “Bankable” and Credible Off-taker. The “Bankability” and credibility of the Off-taker over the long term is key to ensure competitive tariffs from IPP’s as competitive long term funding is required to reduce tariffs and promote a competitive Power sector.
Liquidity Support
The most commonly deployed credit enhancement option is requiring the
ISMO, to procure and provide liquid security. Given the South African Government’s fiscus limitations and the inability to provide liquid security
required to source Liquidity support to
IPPPs. Alternative security providers could facilitate this such as credit insurance. The cost of which may be recovered in the PPA tariff.
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AN INDEPENDENT TRANSMISSION GRID SYSTEM AND MARKET OPERATOR (ITSMO) IN SA
Financing Considerations
Importance of Renewable Energy
Given the global commitment to the energy transition towards a sustainable energy future through Renewable Energy, it is imperative that the Renewable Energy book in the ITSMO is ring-fenced from
generation technologies as this will assist in securing security from Multilateral agencies and DFI’s which will ensure the success and progression
future Renewable Energy IPP Programmes.
Multilateral Guarantees
It has become increasingly common for private investors and lenders to look for guarantees from multilateral agencies to mitigate their exposure to a project. Multilateral institutions play a major role in providing private investors with security structures such as Payment or Loan Guarantees.
Infrastructure Investment
An Independent Transmission System and Market Operator that is a credit- worthy entity with a proven track record and consistent investment grade credit ratings is key to facilitating raising debt for investment in grid infrastructure in South Africa.
Further Key Financing Considerations
From a Financing perspective, it is clear that a Credit Enhanced ITSMO can facilitate Private Sector Investment which can significantly improve the Power sector in South Africa. The new ITSMO model is key to unlocking economic growth in South Africa through competitive energy pricing via the involvement of IPP’s and further ensuring energy security.
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AN INDEPENDENT TRANSMISSION GRID SYSTEM AND MARKET OPERATOR (ITSMO) IN SA
Wheeling Agreements
The term wheeling describes the transportation of power through the grid from the seller to the buyer. “Wheeling of energy shall be allowed, subject to the generator receiving its approvals from NERSA to sell to a third party and the signing of the network service provider’s Connection and Use-of-System Agreement”. Wheeling as a Value Add Electricity wheeling will allow generators, who are willing sellers to wheel their electricity to a willing buyer anywhere in the country at a price that is acceptable for both parties. Linking willing sellers to willing buyers is key to unleashing Embedded Generation in the Private sector as Corporate and Industrial companies invest in energy security and in renewable energy as part of their respective climate management strategy and reduction in carbon commitments . Wheeling also enables increased efficiency and value, as high solar-resource but low environmental and social impact areas can be utilised, allowing lower-cost, cleaner energy to be utilised when needed. With the spread of wheeling, renewable hubs can be created to decrease costs of electricity promoting economic growth and reducing reliance on power from the national grid. In order for Wheeling to be widely adopted in South Africa the rules for IPP’s and generators to use the grid must be fair, with the tariff system being open, widely accessible, equitable and properly regulated with all policies and regulations being published. There are a number of Mining companies as well as Large Industrial entities that are looking at alternative energy sources for a number of reasons including; increased power costs, reliability of power supply as well as the delivering a sustainable energy
price stability and energy security.
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AN INDEPENDENT TRANSMISSION GRID SYSTEM AND MARKET OPERATOR (ITSMO) IN SA
Types of Operating Models
Different Categories of Unbundling
Vertically Integrated Utility (“VIU”) Legal Unbundling (“LTSO”) Ownership Unbundling (“ITSO”)
Currently in the South African context, Eskom is considered a VIU as Generation, Transmission, Distribution as well as retail is housed under one state-owned utility. Transmission and System
are housed in a separate subsidiary of the VIU. In terms of the “Roadmap for Eskom” a legal unbundling is the third and final phase
Transmission and System
are housed in a separately owned company. As such, the ITSO is independent from any
ITSO however, may still be a state-owned entity. One of the primary reasons for separating transmission from other components of the electricity supply industry is to remove conflicts of interest that may occur in state-owned VIUs, where it is generating its own power while also being a single-buyer from independent power producers as is the case with Eskom. In many cases this has caused a departure from least-cost power planning and procurement. Reasons for Unbundling Establishing an independent transmission grid and system operator can facilitate competition by allowing the entry of privately funded generators. This makes sense where the incumbent VIU struggles to raise capital for new investments and where alternative power generators might be cost competitive. This is particularly important in the case of South Africa given Eskom’s significant debt burden and inability to raise capital together with a deteriorating coal fleet.
AMITH SINGH
THANK YOU
HEAD | ENERGY FINANCE | NEDBANK CIB AMITHS@NEDBANK.CO.ZA
CONFIDENTIAL | PAGE 51
DISCLAIMER
The proposal, presented by Nedbank, has been outlined for the benefit and information of the company or entity (the “Company”) to whom this proposal is submitted in good faith and who is deemed by Nedbank to have accepted responsibility for ensuring that the confidentiality of this proposal will be maintained at all times. This proposal may not be submitted in any manner or form to any party or utilised in any manner or form without the prior written consent of Nedbank. The information contained in this publication is confidential and is not intended to be, nor should it be construed as, "advice" as contemplated in the Financial Advisory and Intermediary Services Act, 2002 or otherwise, or a direct or indirect invitation or inducement to any person to engage in investment activity relating to any securities or any derivative instrument or any other rights pertaining thereto of any company mentioned herein. The Company acknowledges that Nedbank does not assume responsibility to it or to any other person for loss or damage of any kind whatsoever arising as a result of the use or misuse by the Company of this proposal or for any opinion, advice, recommendation, representation or information, expressed or implied, contained herein, notwithstanding any negligence, default or lack of care by it or that such loss or damage was foreseeable. Use of this proposal All ideas, methods, designs, concepts or other works (“the works”) together with the proprietary rights existing in this proposal and all other related material belongs to and remains the absolute property of Nedbank and is to be used exclusively for the purposes of considering Nedbank’s proposal in relation to the transaction.
A dialogue hosted by Nedbank, EE Business Intelligence and JCSE at Wits University