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SOUTH AFRICAN WIND ENERGY ASSOCIATION

Winds of Change

www.sawea.org.za

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Change WINDS OF

“We’re in this together, and we’re starting to get it right” is the rallying cry from SAWEA as the wind industry plays an increasingly significant role in South Africa’s energy sector Writer: Matthew Staff Project Manager: Tom Cullum

ince 1998, the South African Wind Energy Association (SAWEA) has operated as a common law voluntary association; run as a non profit organisation throughout its tenure, and moving into its first permanent office as a Department of Social Development-associated organisation in 2011, in Johannesburg. Representing Southern Africa’s wind industry, the Association includes national and international members active throughout the sector’s supply chain, forming a collaborative entity striving to remove obstacles that are currently hindering the full potential of sustainable wind energy activities in the region.

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As the Association’s website indicates, this remit includes: • “The development of cogent and sustainable South African energy policy that fully facilitates the development of the country’s wind power potential; • The development of cogent and sustainable South African energy policy that fully facilitates the development of the country’s wind power potential; • The promotion of the harnessing of wind energy in large and small scale applications; • The promotion of excellence in wind energy and related areas of business; • The provision of information to government, media and the public

on behalf of the industry; and • The provision of pertinent information to members.” As a movement that has catered for all in Southern Africa looking to promote the use of wind energy, its month-to-month activities not only include involvements in various expos and events, but also in helping to drive significant projects ongoing across the continent and predominantly in South Africa. Aurora Wind Power, Umoya Energy and Rainmaker Energy are just three examples of projects and companies leveraging the positivity that now emanates around wind power generation, as a result of SAWEA’s ongoing influence. This month’s Africa Outlook follows on from last month’s showcase of these aforementioned exponents, by showcasing the story of Kouga Wind Farm; another prime example of the potential that wind power has in a country that has had its fair share of energy struggles in recent years. Behind the scenes, it is SAWEA that continues to strive to ensure that the current momentum is not lost by these ongoing projects in the years to come. So far in 2015, this has incorporated an active role being played in the

Renewable Energy Festival in Cape Town, in March, as well as a more recent announcement that SAWEA’s ‘Windaba 2015’ will take place in the same city in November under the theme; ‘Powering the Winds of Change’. The Association’s #iheartwind campaign is further evidence of SAWEA’s ongoing drive to enhance the sector’s prominence, and an announcement in April confirmed, from a governmental perspective, that the wind industry has reasons to be upbeat for the future. The Department of Energy announced that the procurement of renewable energy would be accelerated and expanded, as part of the bidder confirmation for REIPPP Round 4, with the intention of procuring an additional 6,300 MW of renewable energy, on top of the existing 5,243 MWs which has carried the REIPPPP process through thus far. In the past it has been implied that wind power will receive approximately half the allocated MWs, which will seemingly have only positive impacts on SAWEA’s efforts and targets. The Association’s CEO, Johan van den Berg said: “By this logic, we’re looking at perhaps an additional

2,500-3,000 MW of wind power and a procurement process that extends another three-four years into the future. This, once gazetted, should give comfort to international investors to invest in local factories that can push the local content of wind farms to about 54 percent, with the upper 60s in reach. “Moreover, the money being put into local community development around wind farms will rise from the present R5 billion over the next twenty years, to at least R10 billion and perhaps much more.” Van den Berg added: “Renewable energy is coming just at the right time. There is a lot of it ready to be built immediately. Government is recognising this and has now communicated a vision that, given the volatility in our sector, is remarkable for its courage and perspicacity. “Wind power is core to this and we expect our industry to continue its very fast growth, while continuing to deliver on the social compact with government. Jobs and rural development, industrialisation and enterprise development are aspects as important as electrons on the grid. “We’re in this together, and we’re starting to get it right.”

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West Coast 1

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Wind farms are rapidly finding homes in South Africa’s windswept provinces, and with the REIPPP programme in full swing, Aurora Wind Power is keen to make its mark on the landscape, starting with West Coast 1 wind farm Writer: Emily Jarvis Project Manager: Tom Cullum wned by a consortium involving an experienced international Independent Power Producer (IPP), ENGIE (formerly GDF SUEZ) and South African investors, Investec Bank Limited and Kagiso Tiso Holdings, Aurora Wind Power proudly celebrated the commercial operation of its 94MW West Coast 1 wind farm this month, beginning to generate full output of electricity on schedule, on 9 June, 2015. Secured in the second bidding round of the Renewable Energy Independent Power Producer Procurement (REIPPP) programme organised by South African authorities, West Coast 1 wind farm is strategically situated in the Western Cape Province, 130km north of Cape Town near Vredenburg, where the quality of wind resource produces a high quantity of electricity. “Factors such as this and the proximity of the electrical network determine a site’s suitability for a wind farm. Additionally, a favourable local logistical and infrastructure environment also contributed to deliver West Coast 1 on time and in safe conditions,” details Tristan Bosser, Chief Executive Officer (CEO) of Aurora Wind Power. Driving along the West Coast road just outside of Cape Town reveals the

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INVESTEC

he Aurora 94 MW Wind Power project, initiated seven years ago, will provide environmentally sustainable energy generation and ease South Africa’s current electricity constraints. Socio-economically, Aurora aims to establish several educational initiatives in the local community. This is in addition to the more than 600 jobs generated during construction and the 24 permanent jobs created. Investec has a multi-disciplinary global team, capable of advising, arranging and structuring finance and underwriting transactions. Our renowned expertise and knowledge of the Power and Infrastructure arena is evident through our financing of approximately 6 900MW of Thermal, 1 342MW of Wind, 1 065MW of Solar, 2000MW of Hydro and 70MW of Biomass globally. In certain markets and sectors, we also play a development role, structuring projects to attract long-term capital. Most recently we have played a development role in the following projects:

West Coast 1 - Wind turbine installation

extent to which the area has become a renewable hotspot; with the likes of Hopefield wind farm just one example of the many projects currently in operation as a direct result of the well received REIPPP programme. With the celebration of Global Wind Day on 15 June, 2015, the South African Wind Energy Association reported that 294 wind turbines have been installed to date in South Africa, which gives clear indication that wind power is truly taking off in South Africa. The Association also reported that the country has the potential for 2,000 wind turbines to be installed by 2020. “Across South Africa, more than 20 large-scale wind farms under construction are due to generate close to 2,000MW of power when completed. There has been a high level of transparency in the competitive process organised by South African authorities which has been welcomed by the industry and all involved players,

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• 4.29MW Eternity Power, the first of its kind co-generation power plant using Ormat’s Organic Rankine Cycle technology in SA (current commission)

Across South Africa, more than 20 large-scale wind farms under construction are due to generate close to 2,000MW of power when completed

• 100MW Kathu Solar Park, one of the largest concentrated solar plants in SA (preferred bidder status) • 10.7MW Power Alt, the first gas-fired IPP developed in SA (in operation) • 40MW Kuvaninga, the first project financed natural gas-fired IPP in Mozambique with EDM as the sole off-taker (under construction). With a co-development portfolio in excess of 500MW in the Western and Northern Cape, Investec aims to increase its participation in the wind industry. T +27 11 286 7215

www.investec.co.za/power

Bold ideas have their own power. Hereâ€™s the real deal Investec Power and Infrastructure Finance We partner closely with our clients on all projects. This ensures that innovative investment opportunities are uncovered and developed to their full potential. Weâ€™ve been at the forefront of power and infrastructure finance for more than 20 years, and our in-depth analysis, fast decision-making and flexible solutions show all the hallmarks of a business relationship you can trust. To find out how we can help you with your next project, call +27 11 286 7215 or visit investec.co.za/power

Power & Infrastructure Finance The information contained in this communication does not constitute solicitation for investment, financial or banking services. It is for informative purposes and not intended to constitute advice in any form. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Investec Bank Limited accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this communication. Corporate & Institutional Banking, a division of Investec Bank Limited. Reg. No. 1969/004763/06. A registered credit provider, registration number NCRCP9. A member of the Investec Group.

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ENGIE

NGIE (formerly GDF SUEZ) is a global energy leader that develops its businesses – power, natural gas, energy services – around a model based on responsible growth. We provide innovative solutions based on our expertise in four key sectors: independent power production, natural gas, renewable energy and energy efficiency. Long-term energy partner for Africa • Over 50 years of experience on the continent • 2.8 GW power capacity in operation & under construction + another 0.5 GW renewable capacity under development (mid-2015) • First mover in independent power generation in South Africa (Peakers) • Global gas expertise to be leveraged for Africa

The wind farm is expected to offset an 5.6 million tonnes of CO2 over 20 years

notably the financing institutions, which consist mainly of South African banks. Other African countries are showing interest in this renewable model as well. This model is considered of interest by other countries in Africa. West Coast 1 wind farm fits right into this environment, boasting 47 turbines, each with a generation capacity of 2MW and a total project investment of close to two billion rand,” says the CEO. West Coast 1 started commercial operation on schedule and is a shining example of what can be achieved over the course of two years since construction began. “The wind farm is expected to offset an estimated 5.6 million tonnes of CO2 over the 20-year duration of its power purchase agreement (PPA). The estimated annual energy production represents the consumption of 110,000 low income houses, or 45,000 middle income houses. The success factors that contributed to this achievement are solid partnerships,

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We are... able to report zero working accidents during our construction period, a notable achievement of which we are extremely proud

strong support from both local and national authorities and highly motivated teams. We are also able to report zero working accidents during our construction period, a notable achievement of which we are extremely proud.”

REIPPP Programme

In order to curb the country’s reliance on coal for electricity and contribute towards decreasing carbon emissions, the REIPPP programme was introduced with the hopes of delivering 3,625MW of renewable energy by the end of 2016. “It has really taken off which has encouraged the South African government to grow the programme larger than originally intended; and there is talk of them doubling the MW available in a substantial programme extension. The REIPPP programme is moving in the right direction and the additional megawatt allocation in round 4 promises to bring in a further 1,800MW

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Overcoming construction challenges in difficult environments

to be awarded within the next year by South African authorities. “Its success has created fierce competition in the wind industry, which has resulted in the price of wind energy decreasing every year, becoming the cheapest form of renewable energy across all technologies,” comments Bosser. South African authorities have now approved more than 50 renewable IPPs and each project will require connection to the Eskom network in order to evacuate the power into the regional and national grid. This represents both large and sudden construction management and financing efforts for Eskom. “To cope with this big challenge Eskom has begun subcontracting IPPs via the specific procedure of a ‘selfbuild agreement’ to complete the work for them, which is proving very efficient given the current power crisis environment; taking some of the pressure off Eskom,” says Bosser.

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Challenges

During the construction phase, both in terms of job creation and South African local content purchase, the project exceeded the objectives for local economic development

Aurora Wind Power faced many challenges when realising the West Coast 1 project, both in terms of grid connectivity and site construction. “Firstly, in terms of the physical operating environment, deep sands along the 33km grid connection servitude hampered the construction supply chain, specifically when it came to the delivery of concrete for the 100 overhead poles,” Bosser explains. “Secondly, in terms of erecting the wind turbines themselves, we found shallow boulders when excavating certain wind turbine foundations which subsequently required the use of dynamite. Strong seasonal summer winds also often halted the use of cranes for several days therefore, to maintain our timelines, we worked closely with Vestas to work through the night to make use of less windy slots and organise additional specific safety measures to support night-time construction,” he further adds.

Team training

Leveraging both the strengths of South Africa’s construction industry and the international experience of ENGIE and Vestas, Aurora was able to obtain all the skills required for every aspect of the West Coast 1 project. The construction of the site created more than 600 jobs, 450 of which were from the surrounding communities. From design and logistical arrangements through to project management and maintenance, the main project contractors – Vestas for the turbines and their management and Consolidated Power Projects Pty Ltd (CONCO) - coordinated with local subcontractors and were able to hire from the local communities. Bosser adds: “Expats like myself have been recruited to initiate skills transfer right down the value chain, given our experience working on wind farms in other countries. During the construction phase, both in terms of job creation and South African local content purchase, the project exceeded the objectives for local economic development agreed within the South African government’s economic development goals (EDGs).” These economic development goals include an emphasis on corporate social responsibility projects, which Aurora Wind Power has taken very seriously in order to contribute to socio-economic development initiatives in the local area. So far, the Company, in partnership with a

The construction of West Coast 1 created more than 600 jobs, 450 of which were from the surrounding communities

South African NGO, has initiated a five year upliftment programme in the 24 primary and high schools of Saldanha Bay Municipality, as well as bursary programmes for students from the local communities. Another important Company topic is ensuring the safety of all staff, which sits at the centre of Aurora Wind Power’s company policies. “We place a very strong emphasis on this aspect of the business and this is part of the selection criteria during our recruitment process. We were able to achieve zero working accidents throughout the whole construction period, for both the grid connection

and wind farm project. Construction of large infrastructures implies exposure to a high level of risks - such as earthworks, working at heights with large cranes and heavy loads, being in a high voltage environment and so on – therefore, the necessary risk assessment and corresponding preparation was organised to minimise exposure for everyone involved in the project,” he emphasises. Aurora Wind Power will continue to maintain the West Coast 1 wind farm with help from Vestas, while looking to continuously improve electricity output where possible to get the most from each turbine. Bosser concludes: “West Coast 1 has no doubt been a learning curve in terms of the challenges South Africa’s new IPP and new renewable landscapes can bring, but the project was delivered on time and met all expectations. Subsequently, we hope to apply all our learnings from this project to others in the future, setting our sights even higher to secure higher electricity production levels to really change South Africa’s renewable future.”

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Good Example in South Africa IPPs Set a

Umoya Energy has demonstrated its commitment to not only contribute to creating a greener future for the country, but also the ongoing provision of community upliftment projects Writer: Emily Jarvis â€˘ Project Manager: Tom Cullum

Cookhouse Wind Farm

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moya Energy is an IPP (Independent Power Producer) created as a special purpose vehicle (SPV) to develop and own Hopefield Wind Farm, South Africa’s first wind farm to reach commercial operation date (COD) on 1 February, 2014. Umoya is a recognised name in South Africa’s wind energy sector, having been on the renewable energy scene since the start of the REIPPP Programme this decade. During this time, the Company has been joined by a wide range of local and international IPPs also seeking to participate in the

flourishing renewable energy industry in South Africa. “The shareholders of both of our wind farms [Hopefield and Cookhouse] have taken an active and supportive role throughout the development, construction and operational phases. Given that both projects were built in the first round of the REIPPP Programme, shareholder support was welcomed as we have navigated what was fairly uncharted territory in South Africa,” says Sam Cook, Technical Manager for Hopefield Wind Farm and Cookhouse Wind Farm. Since completing construction, Umoya has turned its attention to

optimising the operation of its power plant as well as implementing and supporting community projects in the Hopefield area. “The South African Wind Energy Association (SAWEA) is promoting coordination between its members, and some IPPs whose projects are in close proximity are already preparing to work together on economic development (ED) projects. Given that Hopefield Wind Farm (HWF) has been fully operational for more than 17 months now, our attention has turned to economic development (ED) initiatives, in addition to continuing in our efforts to optimise operation

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and maintenance (O&M) of the wind farm,” Cook explains. As with other Round 1 projects, the necessary skills for building-out both wind farms were sourced through a combination of local and foreign companies. Now, as operating plants, the requisite skills are largely and increasingly coming from within South Africa as the companies involved invest in ongoing training and development of staff. Cook continues: “Both O&M contractors [Vestas for Hopefield and Suzlon for Cookhouse] are continually training their wind turbine service technicians. Suzlon has 15 South African technicians on staff who operate and maintain our S88 turbines. They began their training as wind turbine technicians at our wind farm during the construction phase and some have even visited India for training. Their training and professional development is ongoing.”

Driving costs down

Wind energy alone is predicted to contribute around R7 billion to the community development over the next twenty years. We think this will fundamentally transform these rural communities for the better

Creating a highly skilled pool of talent is vital considering the rapid growth of wind power in South Africa in general. While it is subsequently having an extremely positive effect on the country’s economy, it is also helping to mitigate power generation challenges, as well as delivering cost savings to those participating in the REIPPP Programme, which in turn leads to cheaper electricity. Commenting on the current state of the industry and its economic impact in SA so far, SAWEA comments: “Research by the Council for Scientific and Industrial Research (CSIR) has shown that wind energy is presently costing South Africa less than nothing. Savings in diesel and coal costs should be added to the economic savings

REIPPPP Renewable Energy Independent Power Producer Procurement Programme South Africa has a high level of Renewable Energy potential and presently has in place a target of 10,000 GWh generated by renewable energy sources. The required generation capacity from renewable energy sources is estimated at 3,725 megawatts to ensure the continued uninterrupted supply of electricity throughout South Africa. This IPP Procurement Programme has been designed so as to contribute towards the target of 3,725 megawatts and towards socio-economic and environmentally sustainable growth, initiating the growth and stimulation of the renewable industry in South Africa.

Hopefield Wind Farm

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Hopefield turbine

from avoided load shedding. These benefits have increased significantly in the past six months, over the previous period. If we assume South Africa will be electricity constrained until 2020, it is fair to assume that an expansion of the REIPPP Programme will yield enhanced benefits. “We believe that the South African government agrees with this logic, leading to the Minister of Energy’s recent announcement that the Programme is being expanded and expedited. Wind energy alone is predicted to contribute around R7 billion to the community development over the next twenty years. We think this will fundamentally transform these rural communities for the better.” Those within the industry hope that firm commitments will be made with respect to megawatts allocated under future rounds of the REIPPP Programme in order to enable further investment in local manufacturing.

Cookhouse Wind Farm

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ALESCO

lesco is a global insurance broker and risk management consultant, with specialist teams operating in the power and energy industry. We represent our clients throughout the development, construction and operational phases of Independent power projects, interacting with sponsors, lenders, contractors and any other parties engaged in your Project. Our expert teams design, arrange and service construction and operational insurance programmes. Our client base on the African continent spans 6,000 MW of independent power across 15 countries and includes thermal, hydro, wind and solar projects.

Cookhouse, the largest wind farm in Africa today

Cookhouse Wind Farm

Located near the town of Cookhouse in the Eastern Cape Province, Cookhouse Wind Farm comprises 66 turbines, each with a hub height of 80 metres, giving a total installed capacity of 138.6MW. One of the largest wind farms in Africa, it reached COD in November 2014 and has been delivering electricity to the Eskom grid since then. Jannie Retief, CEO of Cookhouse Wind Farm, says that the project is expected to deliver around 370,000MWh per annum of clean

energy into the grid; which is enough electricity to power 138,000 lowincome homes or 57,000 mediumincome houses. “The excellent cooperation of contractors, subcontractors, shareholders, lenders and Eskom, underpinned by a strong contractual framework governing these relationships, has supported the realisation of the project. This made Cookhouse, the largest wind farm in Africa today, a reality,” he continues. In order to produce the same amount of electricity using fossil fuels, a South African coal-fired power station would emit approximately 384,000 tonnes of CO2 every year; equivalent to taking over 78,000 cars off the road. Cookhouse Wind Farm has established itself as a market leader in a number of aspects. Over and above being the largest South African wind farm at the time, it is 25 percent owned

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On our key projects across the continent we work in tandem with our Africa partner, Lapis Re, to ensure we consistently provide our clients with the global expertise and local knowledge needed to deliver innovative and competitive insurance solutions. Lapis Re is a renewable energy specialist insurance and reinsurance broker with international presence but rooted in Africa powering our client’s insurance solutions on the continent in respect of Development, Construction and Operational Projects. Our benefits to our clients engaged in Power Generation, Transmission and Distribution is our ability to provide investor security through insurance solutions that result in materialized and sustainable projects by applying knowledge, skill and the know-how in the 14 countries we have conducted business on the continent. Henry Croft-Baker - Partner T +44 (0) 207 204 6191 E Henry_Croft-Baker@alescorms.com Bob Lock - Partner T +44 (0) 207 204 1824 E Bob_Lock@alescorms.com Devash Appalraju – Director T +27 (0) 31 819 7872 E Devash@lapisre.com

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MANY INSURANCE DEMANDS, ONE INSURANCE SPECIALIST For independent power producers With experience servicing 6,000MW of independent power in 15 countries across Africa, including thermal, hydro, wind and solar projects, our team of experts understands your complex business needs. For more information visit:

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Alesco is a trading name of Alesco Risk Management Services Limited. Alesco Risk Management Services Limited is an appointed representative of Arthur J. Gallagher (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Registered Office: The Walbrook Building, 25 Walbrook, London EC4N 8AW. Registered in England and Wales. Company Number: 1193013.

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ARCUS CONSULTANCY

rcus Consultancy Services is an environmental, planning and engineering consultancy, based in Cape Town, South Africa. Arcus Ecologists are undertaking environmental monitoring at the Hopefield Wind Farm in the Western Cape, South Africa, one of the first operational facilities in the country, to understand and minimise the impacts of wind turbines on bats and birds. Arcus designed the monitoring survey which employs Hopefield community members to undertake regular searches for bats and birds, giving them opportunities in the environmental and renewable energy sectors. Arcus is committed to delivering technically sound projects efficiently and with minimum risk.

www.arcusconsulting.co.za

Hopefield Home Improvement Project

by the local community through the Cookhouse Wind Farm Community Trust; five times the governmental target for local community ownership. The project has already supported many local charitable organisations including soup kitchens, special day-care centres for children with disabilities, care homes for the elderly, foster care homes and sports facilities. The establishment of the Community Trust will ensure that local development projects will continue to benefit from dividends throughout the 20-year project life.

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Hopefield Home Improvement Project

Over a period of two years, 19 previously unemployed residents in Hopefield are being trained and working as artisans

The Hopefield Home Improvement Project is the first major project undertaken by the Hopefield Wind Farm Local Community Company. Over a period of two years, 19 previously unemployed residents in Hopefield are being trained and working as artisans making improvements to more than 600 homes in this small town in the Western Cape. â€œThe Home Improvement Project will see the installation of solar water

Environmental Consultants Committed to delivering technically sound projects efficiently and with minimum risk.

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geysers, insulated ceilings and electrical reticulation in Hopefield homes. By the end of June, a total of 207 homes had been completed by the 19 local artisans who are being trained in plumbing, electrics or carpentry. Their training commenced with a four week course at Northlink College in Cape Town. “The artisans are now honing their skills further with on-the-job training. The project aims to prepare them for employment or entrepreneurship roles in construction and related sectors. We are looking at ways to assist them in this regard,” explains Cook.

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MARSH IS DELIVERING CHANGE WHERE OTHERS SEE RISK, WE SEE OPPORTUNITY Proudly leading the market in the South African REIPPP MARSH AFRICA Africa’s pre-eminent Insurance Broker and Risk Advisor www.africa.marsh.com | +27 11 060 7100

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Renewable Solutions COST- COMPETITIVE

Rainmaker Energy has witnessed the changing attitude towards South Africaâ€™s renewable energy sector firsthand, having been present there since before the REIPPP Programme was established Writer: Emily Jarvis â€˘ Project Manager: Tom Cullum

s a specialist in innovative renewable solutions, Rainmaker Energy is a privately owned company with broad expertise as an originator, developer and owner-operator of renewable energy assets in South Africa. With firm foundations as a 100 percent South African-owned independent power producer (IPP), Rainmaker Energy has ambitious goals that it hopes to achieve in the next few years, eyeing opportunities in the global photovoltaic (PV) industry, along with the continued interest and expansions of the onshore Dorper Wind Farm in line with REIPPP Programme goals.

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E N E R G Y

From its offices in Johannesburg, Cape Town and a newly established base in London, UK, Rainmaker has strategically positioned itself in two of the world’s renewable hotspots, leaving it well positioned to access and mobilise project development and investment opportunities across Africa, Europe and the Middle East. The Company has developed an onshore wind project pipeline in excess of 450MW in South Africa since entering the market in 2009, prior to the official announcement of the REIPPP Programme in 2011; developing one of the first large scale grid connected wind projects – Dorper Wind Farm – with a further 330MW of wind and 290MW of solar PV projects also under development.

Representatives of Dorper and lenders on signing Power Purchase Agreement and Implementation Agreement

“South Africa has fantastic wind and solar resources. We also have a situation where the country is in the grip of a major shortage of power supply, resulting from a myriad of well-documented factors including the delay in bringing Eskom’s new thermal generation capacity online. This predicament has presented a huge opportunity to the renewables sector to step in and demonstrate that renewable energy can play a significant role in the energy generation mix of a developing country. The South African Government saw the opportunity for Public-Private-Partnerships in the energy sector and has run a very credible procurement process. The fact that National Treasury has stood behind the programme, and provided payment guarantee for Eskom’s offtake, has been one of the reasons that so much foreign investment has been attracted to the local market.” - Gavin James, Director, Rainmaker Energy

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“Our first project, the 100MW Dorper Wind Farm has been fully-operational since 9 August 2014 and was awarded ‘African Wind Deal of the Year 2012’ by Project Finance Magazine, in recognition of its unique and innovative financing structure,” says Gavin James, one of Rainmaker’s Directors. Given its full independence, Rainmaker benefits from flexibility on its debt and equity funding, having made no prior commitment to particular funding bodies. Combine this with a strong in-house technical, commercial and legal team who ensure each project is right for the Company portfolio, and Rainmaker Energy is ready to capitalise on the burgeoning market for renewables in key global markets.

Stormberg

Situated in the Eastern Cape province, between the towns of Molteno and Sterkstroom, Dorper Wind Farm is the perfect example of Rainmaker’s ability to see a renewable project through all challenging situations to its timely completion in a cost-competitive fashion. The Wind Farm consists of 40 Nordex 2.5MW N100 turbines, collectively generating approximately

281,196GW a year, with Nordex providing the key operations and maintenance of the site. The Dorper Wind Farm represents the first phase of Rainmaker’s greater Stormberg Wind Energy facility that is currently under development. Rainmaker Director, Luke CallcottStevens explains: “When we initially commenced development in 2009, the REIPPP Programme had not been announced and there was no indication that there would be a cap on maximum installed capacity. The Dorper project was thus initially planned to be a 550MW facility and we secured the requisite land, and an Environmental Authorisation (EA) for 550MW was then approved by the Department of Environmental Affairs.” Once it became apparent that the REIPPP Programme would have a 140MW cap on installed capacity for wind projects, Rainmaker elected to reduce Dorper to 100MW in order to ensure ease of connection into the

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HARNESSING RISK ON THE WINDS OF CHANGE

Proudly leading the market in the South African REIPPP MARSH AFRICA Africa’s pre-eminent Insurance Broker and Risk Advisor www.africa.marsh.com | +27 11 060 7100

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onsite 132KV distribution line and we applied for the EA to be amended and 30 June 2015 08:27:38 AM split into four separate projects so as to be compliant with REIPPPP. “Thus was born the Loperberg project (140MW), Malabar project (140MW) and Spreeukloof project (53MW), which will each connect into the onsite 400KV transmission line,” adds Doug Jenman, a Director for Rainmaker Energy. Eastern Cape is a favourable area for wind farm development due to a number of factors, including the excellent availability of wind resource in the area and a continually improving road network infrastructure to transport heavy loads to the area. In terms of environmental impact, EIA studies have shown that risk is limited in the Eastern Cape, which meant Stormberg received full environmental authorisation from the Department of Environmental Affairs for Dorper and the next three projects now under development. Africa Outlook2_Winds of Change_300615

Work being carried out on a concrete foundation at Dorper site

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Dorper wind farm - operating in harmony with agriculture

“Additionally, full heritage approval has been given for all projects, and both Civil Aviation Authority approval and Department of Water Affairs consent is in place for Loperberg and Malabar, with Spreeukloof in progress. The projects fall within Area 4 of the Phase 2 focus areas of the Renewable Energy Development Zones (REDZ), as identified by South Africa’s Council for Scientific and Industrial Research (CSIR) in its Strategic Environmental Assessment (SEA) exercise conducted to date. These areas have been selected as those with the highest development potential in the country and we are proud to be a part of this during a time of rapid renewable growth,” highlights Callcott-Stevens.

Cost-competitive

As the bidding process enters the extension phase of round 4, what is clear for South Africa is that renewable energy has been welcomed as a viable alternative to complement coal and nuclear power. Round 1 projects have now reached COD and are providing

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We hope to play a leading role in realising the rest of the continent’s potential for renewable energy

Dorper Wind Farm

valuable and cost-effective electricity back to the grid. “Wind and solar power, besides being cheaper, bring advantages at different times of the year. In summer there is more chance of coal shortages due to wet coal fields, but this comes at a time when solar is at its peak. Similarly, in winter, when the weather is at its coldest and demand for energy at its highest, many wind farms including Dorper are able operate at peak capacity, working in tandem with fossil fuels,” details Jenman. According to a recent survey, renewable energy projects saved South Africa 120 hours of load shedding in 2014, translating to an economic saving of 1.6 million rand a year. Job creation in the sector has also been significant, with many projects now boasting a close-to 100 percent South African workforce and a growing number of local suppliers for operation and maintenance. “This industry trend is happening much quicker than we first realised. OEMs are training local staff continually as a result of the number of turbines

Dorper Wind Farm complete and operating – 40 x 2.5MW wind turbine generators

Doug Jenman, Director

being installed at the moment. “Advantageously, the specialist skills required are quite limited when compared to say, operating a nuclear power plant, meaning that the industry attracts more people who can be trained in a shorter space of time. For Rainmaker, this is very exciting as we are exposing so many new people to the processes involved in managing power plants in South Africa,” highlights Jenman. “South Africa’s renewable industry is now saturated with skilled companies who encourage healthy competition

Gavin James, Director

Luke Callcott-Stevens, Director

and higher local content; when just five years ago, wind and solar power were seen as high risk areas of business. Now, a wind turbine foundation is poured almost every day in South Africa and wind farms decorate the landscape of the country’s windiest regions. We hope to play a leading role in realising the rest of the continent’s potential for renewable energy,” James, CallcottStevens and Jenman conclude. In tandem with its Stormberg expansions, Rainmaker Energy is currently in the process of extending its reach beyond the borders of South

Africa, identifying development and investment opportunities throughout the African continent and beyond. At present, it has identified the solar PV as a key technology for global growth, starting with Africa and the United Kingdom. Having established a UK presence through SolarStone Energy Limited, Rainmaker is utilising its industry competencies, financial security and project operation knowledge to take advantage of other emerging renewable markets; hoping to play a key role in future energy development in new markets.

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Kouga Wind Farm remains committed to its ‘doing it right’ ethos, not only in generating much needed energy for the national grid, but in uplifting the local regions in which it operates Writer: Matthew Staff Project Manager: Tom Cullum s South Africa continues to stabilise its energy sector, the reliance on wind power is becoming more and more pivotal; epitomised by the work currently ongoing at Kouga Wind Farm as it embarks on its first full year of operation. Connected directly to the Eskom grid, the importance of projects such as Kouga Wind Farm cannot be underestimated and the past few years of development have raised expectations about what can be achieved through this renewable medium. Supported by numerous other projects in the country, and headed

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RIGHT up by the South African Wind Energy Association (SAWEA), the 32 turbines have now been erected and the substantial completion stage has been reached; paving the way for more tangible figures to be attached to the Farm. “Commercial operation of the Kouga Wind Farm officially commenced on 17 March, 2015,” the Company affirmed at the time. “The Kouga Wind Farm is an 80MW wind farm consisting of 32 2.5MW wind turbines which means that the Kouga Wind Farm will add approximately 300 million KWh of clean electricity annually to the grid; enough to supply approximately 50,000 average South African households with electricity annually.”

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Concrete foundations

The total capacity of the Wind Farm, across the 32 turbines, amounts to 80MW, a figure that justifies the project on its own. The amount of planning, construction, and logistical refinement that has occurred in the lead up to 2015 tells the story of a more multi-faceted project however, beyond the resultant facts and figures. Teaming up with globally-renowned manufacturer, Nordex Energy, the operation has been every bit as efficient and international as the trend it is catering for, as the Company emphasised at the time of the announcement: “Nordex not only supplies the turbines but is also responsible for the final design and the

construction of the wind farm. “Nordex have engaged wellestablished, reputable South African contractors to undertake the civil and electrical work; Power Construction and Actom respectively.” Maintaining an intrinsically

South African presence within the construction and formulation of the Wind Farm was a core focus of Kouga’s in ensuring that sustainability thrived both throughout the process and the aftermath of the site. The inner-workings and assembly of the turbines themselves required optimum manufacturing excellence, however, which Nordex accomplished well within the given time constraints over the past two years. “The turbines have an 80 metre high tower and the blades are 90 metres in diameter. The tower is made up of four sections and there are three blades,” Kouga explained. “The turbines require concrete foundations of about 20 metres in diameter and each foundation is designed and based on the ground conditions where it is situated.” Remaining flexible and proactive enough to overcome certain logistical challenges was further compounded

Lukhanyo Ndube, CEO, Kouga Wind Farm

by the construction of gravel roads linked between the turbines in order to transport materials efficiently, and also through the erection of cranes in order to precisely control the construction process in ironically difficult windy conditions.

Doing it right

While the primary benefits of a wind farm such as Kouga’s are clear for all to see, the advantages that have been produced by this particular project spread far beyond the energy readings and the Eskom grid. The Wind Farm will inject in excess of R250 million into local upliftment projects in order to benefit members of historically disadvantaged communities in the region; thus cementing its longevity as an enrichment project.

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TMF GROUP

n 11 November 2014, TMF Group, the Amsterdam-based corporate services company acquired GMG Trust Company (SA). The acquisition expanded TMF Group’s footprint in Africa to seven countries alongside eighty other countries worldwide. John Doidge, CEO of TMF Corporate Services (South Africa) explained: “The merger of the local business with that of the wider group has been an outstanding success. We are currently involved in more than 50 renewable energy projects in South Africa and we can now offer a wider range of services across Africa.” The acquisition has made TMF Group a major service provider on the African continent. T 021 657 6010 E john.doidge@tmf-group.com

www.tmf-group.com/southafrica The capacity of the Wind Farm, across the 32 turbines, amounts to 80MW

“Key to the development of the Kouga Wind Farm is the ethos of ‘doing it right’ and this involves ensuring a strong positive impact on the communities and areas in which we are involved,” the Company states. “We aspire to build relationships with the community, facilitating community participation in our wind farms through a broad-based empowerment trust, as well as by actively investing in the communities themselves. “The fact that wind energy will help reduce greenhouse gas emissions and thus also help reduce global warming and related sea level rises in the long run may also have a positive impact in the future on the communities of coastal towns, which are already experiencing significant impacts from seashore erosion.” This positive impact across the board continues into the classrooms, healthcare sector, transport domain and infrastructural entities in order to deliver on a corporate social

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Key to the development of the Kouga Wind Farm is the ethos of ‘doing it right’ and this involves ensuring a strong positive impact on the communities and areas in which we are involved

Facility Agent I Security Agent I Calculation Agent Escrow Agent I Bond Trustee I SPV Management Company Secretarial Services I Public Officer Accounting Services I Payroll Services

With operations in a number of key jurisdictions in Africa â€“ two offices in South Africa alone â€“ TMF Group is a key player in the renewable energy space. Our client-focused team of lawyers and accountants are supported by strong, professional administrators with a proud record of excellence, offering a full range of corporate services to help clients reduce risks, be compliant and simplify operations.

Where can you find us in Africa?

TMF Group is proudly

Ethiopia I Ghana I Kenya I Mauritius I Nigeria South Africa I Tanzania

associated with

john.doidge@tmf-group.com T: +27 21 657 6010

Our full range of services include:

Kouga Wind Farm

tmf-group.com/southafrica

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investment promise which has subsequently been mirrored by all its suppliers; including Nordex South Africa, Power Group and Actom, as well as the Kouga Wind Farm Project Company. “A positive impact on the surrounding communities is key to the development of the Kouga Wind Farm,” the project’s Chief Executive Officer, Lukhanyo Ndube said. “This has involved building relationships to facilitate community participation and actively investing in these communities.”

Environmental protection

Building a meaningful and impactful influence on South African energy

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Ndube also noted that the combined budget of the entire construction team, encompassing all business partners, enabled the project itself to become more meaningful and impactful; a mission statement which Kouga looks set to apply in addressing the overwhelming environmental concerns as well. “As a renewable energy company, and a local developer, the protection of the environment is a cause close to our hearts,” Kouga Wind Farm said. “We are aware of the need to balance the benefits of wind power with the possible effects on the environment. “To this end we avoid environmentally sensitive areas and involve independent consultants to ensure that the impact of each wind farm is kept to a minimum.”

Kouga Municipality

Kouga Wind Farm

Oyster Bay

Kouga Wind Farm has consequently entered into a proactive agreement with the Endangered Wildlife Trust to monitor potential impacts of the Wind Farm on key bird species’ in the area, as well as working with local NGOs to identify further conservation-sensitive aspects of the region. Being a registered clean development mechanism (CDM) further enforces its environmental stance in being allowed to carry out emission-reduction

As a renewable energy company, and a local developer, the protection of the environment is a cause close to our hearts

Two years of work is coming to fruition

projects, and once again paving the way for even further growth of the Wind Farm in the years to come. “Benefits of CDM projects include investment in climate change mitigation projects in developing countries, transfer or diffusion of technology in the host countries, and improvement of communities through the creation of employment or increased economic activity,” the Company concluded.

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SOUTH AFRICAN WIND ENERGY ASSOCIATION 53 Dudley Road Corner Bolton Avenue Parkwood Gauteng 2193 South Africa Tel: +27 (0) 11 214 0664 admin@sawea.org.za