Sarjeevan Sainbhi

20104006

PROJECT : Eskom Renewable Energy ProjectSere Wind Farm

Country : Republic of South Africa

___________LOCATION

Western Cape Province, 2 km off the coastline of

the Atlantic Ocean

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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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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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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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Project Schedule

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The estimated cost of the Sere wind project does not

include the forward cover. 8Sarjeevan Sainbhi

Unit of Account Unit by which value of a thing is accounted and compared.

1 UA = 1.5619 US Dollar

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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

Project Funding

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Funds Approval ProcessDue 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

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BORROWER : Eskom Holdings SOC Ltd.

EXECUTING AGENCY : Eskom Holdings SOC Ltd

Project type : Investment loan.

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CONTRACTUAL PLANS

Implementation arrangements :

• Eskom, a wholly-owned government entity, will be solelyresponsible for implementing all components of theproject.

• Eskom will the sole beneficiary of the loan, which will beguaranteed by the Government of South Africa.

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CONTRACTUAL PLANS

Procurement arrangements

• Works, goods and consulting services will be procured inaccordance with the Bank's Rules.

• Jointly financed components and activities will beprocured in accordance with the IBRD’s procurementguidelines and the IBRD’s standard bidding documentswill be used.

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The EPC contracts proposed for joint financing are as follows:

– AfDB, jointly with the IBRD & the AFD will finance theprocurement of an EPC contract for the Sere WindFacility, consisting of the supply and installation of windturbines and generators, a tower and other equipment.Procurement will be carried out throughprequalification under International CompetitiveBidding.

CONTRACTUAL PLANS

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CONTRACTUAL PLANS Financial management, audit , reporting & monitering :

– The project’s financial transactions will be managedby the project implementing agency (Eskom) within itsexisting set-up: namely, the Finance Division and theGroup Capital Division, under the overall managementof Eskom’s Board of Directors

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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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Thank you

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