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

1. PROJECT : Eskom Renewable Energy Project
Sere Wind Farm
Country : Republic of South Africa
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20104006

2. ___________LOCATION
Western Cape Province,
2 km off the coastline of
the Atlantic Ocean
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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.
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4. Sere Wind Project Objective_______________
Increased renewable energy supply 
Avoidance of greenhouse gas emissions 
CTF-leverage investments in renewable projects 
Job creation 
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5. Project Description
TARGETS:
• 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
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6. Project Schedule
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8. The estimated cost of the Sere wind project does not
include 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.
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10. Project Funding
African Development Bank (AfDB) : USD 45million
CTF through AfDB : USD 50 million
World bank (WB) : USD 90 million
CTF through WB : USD 50million
Agence Française de Développement (AFD) : USD 130 million
Eskom : USD 10 million
Total Cost : USD 375 million
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11. Funds Approval Process
Due Diligence report by AfDB & IBRD in 2010
Application to CTF for Funding Approval in 2010
Committee Approval of CTF Allocation of USD 350 Million in 2011
The Agence Française de Développement (AFD) driven by CTF to
leverage financing.
Late June 2011, AfDB will co-host the Climate Investment Funds
2011 Partnership Forum & showcasing Sere wind farm as flagship
projects
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12. BORROWER : Eskom Holdings SOC Ltd.
EXECUTING AGENCY : Eskom Holdings SOC Ltd
Project type : Investment loan.
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15. CONTRACTUAL PLANS
Implementation 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.
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16. CONTRACTUAL PLANS
Procurement arrangements
• Works, goods and consulting services will be procured in
accordance with the Bank's 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.
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17. CONTRACTUAL PLANS
The EPC contracts proposed for joint financing
are 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.
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18. CONTRACTUAL PLANS
Financial 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
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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.
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20. Thank you
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