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2 – Afr ica, a major challenge for ENGIE
Africa, a major challenge for ENGIE
ENGIE is
confident that
in the next 40
years, global
growth will
be driven by
Africa’s growth,
which is in turn
fuelled by
strong
demographics.
Africa’s population grew from 100 million in 1900 to 275 million in
the 1950s-1960s, 640 million in 1990 and one billion in 2014.
According to demographic projections, by 2050 there will be
between 2 and 3 billion Africans, rising to 4.2 billion in 2100. The
prospects for economic growth are also promising. According to the
African Development Bank, Africa’s GDP could rise from a baseline
of USD 1700 billion in 2010 to more than USD 15 trillion in 2060.
Over the last 10 years, Africa’s economic prospects have improved
considerably, even though growth is still very much skewed
towards South Africa, Nigeria and North Africa. Multiple key
factors combine to ensure the long-term continuation of this trend:
sustained, rapid growth of the working population with the
emergence of a significant middle class, a sharp increase in foreign
direct investment, vast and better exploited natural resources,
wide-scale urbanisation and improved governance and institutional
capabilities.
However, this kind of economic growth is only possible
if a major effort is made to increase power generation
resources on a continent where 75% of the population
has inadequate access to energy.
Africa, a major challenge for ENGIE - 3
To address these challenges, ENGIE decided to
create a Business Unit (BU) dedicated entirely to
Africa.
The creation of this BU demonstrates just how much importance
ENGIE attaches to Africa and how determined it is in helping Africa
meet its energy needs. For ENGIE this is a new frontier for growth
and development, following the Group’s major international
successes in South America, Asia and the Middle East.
The new Africa BU is part of the Group’s general reorganisation in
early 2016, involving the creation of 10 geographical BUs. The aim
is to move even closer to customers and deliver solutions that are
ideally suited to their needs, while being fully immersed in local
ecosystems and giving the ‘territorial’ dimension priority over the
‘business’ dimension.
In taking this approach, t h e Africa BU aims to ‘be African’. This
means recruiting personnel locally, identifying risks, being capable
of creating institutional networks and partnerships with local
companies, forging sustainable relationships with investors and
private and public financial institutions, and asserting our local roots
while forging contacts with civil society and NGOs.
4 – Afr ica, a major challenge for ENGIE
Africa is a richly diverse continent, where the Group’s strategy must be adapted to countries and regions
which are all very different in terms of their natural resources as well as their political, economic and
demographic situations.
This means mobilising all of the Group’s businesses:
• Centralised electricity generation with a systematic focus on renewable energies and
gas.
• Gas infrastructure, specifically transmission, regasification terminals and storage:
- coordinated with exploration/production, the importation of liquefied natural gas and
gas-fired power generation.
• Energy support for local authorities, not just massive megalopolises connected to the
grid, but also rural areas with the deployment of off-grid solutions or innovative micro-grid
solutions.
• The sale of gas, electricity and energy efficiency services to businesses.
• The sale of gas and electricity to residential customers via new mobile phone billing
options.
Africa, a major challenge for ENGIE - 5
ENGIE aims to be one of Africa’s main energy leaders in the next ten years, with five major projects in Africa.
To support this ambition, the Africa BU will have around one hundred people and will be
active across the entire continent with four offices corresponding to vast regions where
ENGIE is active:
• Casablanca (Morocco) for North Africa,
• Abidjan (Côte d’Ivoire) for West Africa and central Arica,
• Nairobi (Kenya) for East Africa,
• Johannesburg (South Africa) for the southern part of the continent.
BU Africa
Our offices
ENGIE
ENGINEERING
6 – Afr ica, a major challenge for ENGIE
ENGIE in Africa In its efforts to develop successfully in Africa, ENGIE is focusing on South Africa and Morocco,
specifically power generation with an installed capacity of 760 MW, of which 395 MW in
wind and solar, but also energy services via the creation of its subsidiaries Cofely and
Tractebel Engineering.
Tractebel Engineering has offices in Algeria, Morocco, Nigeria and Tanzania, and is involved
in some forty projects across the continent.
In addition to these assets, the Group is involved in the exploration/production of gas fields
in Algeria and advanced prospecting in Egypt.
The Group is also present via its solidarity-oriented investment fund, ENGIE Rassembleurs
d’Energies, which invests in projects that help people living under precarious conditions gain
access to sustainable energy.
The fund is active in Morocco, Burkina Faso, Kenya and Tanzania.
Africa, a major challenge for ENGIE - 7
ENGIE in South Africa South Africa – with a population of 52 million and an estimated GDP of USD 350 billion
accounting for more than 25% of GDP in sub-Saharan Africa – is the second largest economy
in Africa after Nigeria.
In terms of energy, the country is the biggest electricity market in Africa, with an installed
electrical capacity of more than 45 GW, but it still struggles with under-production.
Some 25% of the population does not have access to electricity and the grid suffers from
under-capacity, exposing the country and industrial companies to frequent load-shedding
risks.
In its COP21 contribution, South Africa reasserts the commitment it made in Copenhagen to
reduce CO2 emissions by 34% by 2020 and 42% by 2025 compared to a ‘business as usual’
scenario. To reach these targets, the country is establishing a carbon tax, implementing
precise regulatory limits for each sector of the economy and modifying its energy mix,
specifically by developing all renewable energies and replacing coal-fired power plants.
In other words, South Africa is aiming to increase its energy production while modifying its
energy mix. To achieve these objectives, the South African government decided to call on
independent power producers for 30% of its production, with the rest provided by incumbent
operator Eskom. The government also launched a 20-year plan aiming for a 42% increase (17
GW) in new capacity based on renewable energies: solar, wind, nuclear, hydro and biomass.
ENGIE is ideally placed to address this challenge: it has had a presence in South Africa since
1994 – specifically in energy services – and is the country’s leading independent power
producer.
The Group aims to support the government in defining a balanced energy mix based on
renewable energies and gas.
8 – Afr ica, a major challenge for ENGIE
2
West Coast One wind farm
West Coast One is a 94 MW wind farm 130 km north of Cape Town. It
has 47 2-MW wind turbines.
West Coast One is part of the government’s programme to develop renewable energies by
independent power producers (the ‘world-class renewable energy IPP procurement
programme’). The programme aims to develop 8 GW of wind power over 20 years.
Construction of the wind farm began in mid-2013 and it commissioned in June 2015 for 20
years. This will result in 5.6 million tonnes of CO2 saved during that period.
The project was led by Aurora, a joint venture created by ENGIE (43%) in partnership with
Investec Bank (34.5%) and Kagiso Tiso Holdings (20%).
In accordance with the rules currently applicable in South Africa, 2.5% of the investment is
donated to local development projects (Local Community Trust).
Africa, a major challenge for ENGIE - 9
Kathu
solar park
ENGIE is also developing a solar park in Kathu (Northern Cape
province), 600 km southwest of Pretoria, the country’s administrative
capital.
This 100 MW concentrated solar power (CSP) plant uses parabolic trough technology and will
be equipped with a molten salt storage system that provides 4.5 hours of battery life, thus
helping to offset the intermittent nature of solar energy.
Led by ENGIE (49%), the consortium comprises a group of South African investors, including
SIOC Community Development Trust, Investec Bank, Lereko Metier and Public Investment
Corporation. The consortium was given ‘preferred bidder’ status in January 2015.
This project is also part of the government programme for renewable energy independent
power producers (REIPPP). The candidates selected as preferred bidders will be invited to
engage in negotiations with a view to concluding a 20-year power purchase agreement (PPA)
with Eskom, the public power production and distribution company in South Africa. The Kathu
works phase is scheduled to start in early 2016.
10 – Afr ica, a major challenge for ENGIE
Solairedirect in South Africa
Solairedirect, a wholly owned
subsidiary of ENGIE specialising in solar
energy, has been present in South
Africa since 2009. Solairedirect is
currently in charge of two projects in
Aurora and Vredendal (Western Cape
province) with a total installed capacity
of 21 MW. These two solar parks are
part of advanced regional projects
involving local authorities and
stakeholders.
Dedisa and Avon peakers
Tractebel Engineering in South Africa
Tractebel Engineering is active in South Africa in
engineering and consultancy, specifically for
Upington (100 MW, Northern Cape) and Kathu,
and for the West Coast One wind farm and the
Koeberg nuclear plant.
ENGIE is also developing two thermal power plant projects in South Africa: the Dedisa and
Avon peakers (with a total capacity of 1,000 MW).
Dedisa and Avon are new open-cycle gas turbine plants (335 MW and 670 MW) located
respectively in Cape province and in KwaZulu-Natal near Durban. They are scheduled to
come online in 2016.
A 15-year operation and maintenance contract was signed with Eskom (the incumbent
operator).
The project companies that own the plants – Dedisa Peaking Power (Eastern Cape province)
and Avon Peaking Power (KwaZulu-Natal) – are held by ENGIE (38%), Legend Power
Solutions (Pty) Ltd (27%), Mitsui & Co (25%) and The Peaker Trust (10%).
The Dedisa plant is essential for the development of the 11,500 hectare industrial development zone in
Africa, a major challenge for ENGIE - 11
Port Elizabeth, specifically for key sectors such as metalworking and aquaculture. This plant is one of
the biggest investments in the zone and has created 1,500 direct jobs and 1,000 indirect jobs in a
region highly impacted by unemployment.
12 – Afr ica, a major challenge for ENGIE
ENGIE social programmes in South Africa
In South Africa ENGIE supports the Valued Citizens Initiative, an NGO which organises educational
support and social programmes in public schools, including in Saldanha Bay near the West Coast
One wind farm. The NGO encourages personal development and civic engagement within a
democratic context.
The ENGIE Foundation has also been a partner to the Valued Citizens Initiative since 2002 in its
campaigns to support education and youth.
From 2002 to 2009, the Foundation supported the Values in School programme, which set up
workshops to raise awareness about constitutional values and citizenship in schools in South
Africa.
The ENGIE Foundation has been funding the Inspire
programme since 2009. This project helps girls
develop their leadership skills, expand their
horizons and take control of their lives, while
fighting gender inequality and poverty in their
communities. To that end, the association organises
leadership training camps for 50 disadvantaged
girls and 50 girls recognised as leaders in their
schools. The girls must then organise a citizenship
project in their school involving other pupils. The
ENGIE Foundation funds this programme in
KwaZulu Natal province, where the Group is
located. Every year it benefits 100 girls aged 14-
16 directly and around 7,000 young people
indirectly (thanks to the reach of Inspire Clubs in
schools). All in all, more than 600 girls have been
helped directly since 2009 thanks to ENGIE’s support.
Africa, a major challenge for ENGIE - 13
ENGIE launches new Schools, Lights & Rights programme in late November
2015
The Valued Citizens Initiative is one of the associations benefiting from this project. It will
receive a grant of €17,000 to promote the civil registration of unregistered children (around
1,100 registrations) and 1,700 portable solar lamps.
The lamps help improve the everyday lives of children by enabling them to study
more easily in the evening. They replace the highly polluting oil lamps that often
cause domestic accidents.
14 – Afr ica, a major challenge for ENGIE
IkamvaYout
h
Ikamva Lisezandleni Zethu is an NGO that supports and assists young people
in their career development.
ENGIE & IkamvaYouth developed the FunMaths programme to help pupils aged 14-15 from
disadvantaged environments with subjects like maths and English. The association brings together a
large number of volunteers: university students and workers, themselves often former beneficiaries of
the programme. ENGIE funds the deployment of the programme in six of the association’s ten branches,
benefitting 247 children.
Social programmes have been set up near the sites of the Avon and Dedisa plants. ENGIE established an
independent fund to ensure that local black organisations and communities can benefit from these
projects. The Peaker Trust holds a 10% stake in the project companies; it was created to fund social and
educational programmes. All of the Trust’s dividends will go to local socioeconomic development
initiatives for at least 15 years, for the entire duration of the power purchase agreements.
Africa, a major challenge for ENGIE - 15
ENGIE in Morocco
With a GDP of nearly USD 100 billion, Morocco is the fifth largest economy in Africa. Its GDP is
expected to grow 4.5% per year during the period 2012-2016. ENGIE – which has had a presence in
Morocco since 1980 – wanted to support the country’s energy growth. Demand for electricity has been
growing an average of 6% per year since 1998 and should continue to advance for the next 20 years.
In this favourable context, Tarfaya, the 301 MW wind farm operated by ENGIE, marks a turning point
in Morocco’s energy strategy, which is aiming to have 42% of installed capacity powered by renewable
sources by 2020. ENGIE also plans to commission the Safi thermal unit (capacity: 2 x 693 MW), the first
latest-generation plant in Africa.
Morocco also announced its intention to develop its gas infrastructure via a massive plan to build a gas
terminal in Jorf Lasfar and four new combined-cycle units (600 MW each), upgrade two existing 150
MW units, and develop new gas-fired units (up to 6,300 MW), a 400 km gas pipeline to connect the gas
terminal to these plants, industrial sites and the Gaz Maghreb-Europe (GME) transmission grid.
16 – Afr ica, a major challenge for ENGIE
2
Tarfaya wind
farm
In Morocco ENGIE operates Africa’s biggest wind farm, with an
installed capacity of 301 MW. The farm was developed under a
50-50 partnership with Moroccan energy company Nareva
Holding and commissioned in late 2014.
Tarfaya is covered by a 20-year power purchase agreement with Morocco’s National Office for
Electricity and Drinking Water (ONEE) under a BOOT (Build, Own, Operate and Transfer) arrangement.
The wind farm is located in the coastal desert in southern Morocco and enjoys optimum wind conditions and a high utilisation rate of 45%, preventing the emission of 900,000 tonnes of CO2 per year.
The farm accounts for around 40% of Morocco’s total wind capacity.
Africa, a major challenge for ENGIE - 17
Safi thermal plant
This project involves the construction and operation of a latest-generation coal-fired plant with a
capacity of 2 x 693 MW.
A contract for the sale of electricity generated by this plant was concluded with ONEE (Morocco’s
National Office for Electricity and Drinking Water) for 30 years after its planned date of
commissioning in 2018.
This plant aims to meet the country’s growing demand for electricity. It will be fitted with a multi-
stage electrofilter system for capturing dust and particulates, a seawater flue gas desulphurisation
unit to remove sulphur dioxide and a flue gas reheating system to eliminate visual impact.
It is being built by the South Korea’s Daewoo Engineering & Construction Co and will cost USD 1.8
billion.
The project company, SAFIEC, is incorporated under Moroccan law and held by ENGIE (35%), the
Moroccan company Nareva Holding SA (35%) and Japanese group Mitsui & Co (30%).
A strong presence in services In Morocco, ENGIE is present in services through its subsidiary Cofely, which has nearly 200
employees. Cofely has seen strong growth in multitechnical services, energy efficiency and facility
management over the last five years.
Tractebel Engineering, the Group’s engineering company, has also been present in Morocco since
the 1980s, providing consultancy and technical support. It was involved in designing and
development of the Mohammedia and Jorf Lasfar thermal power plants, and performed studies for
the LNG terminal project.
Tractebel Engineering works on thermal plants, such as the Safi plant, as well as the Tafilalt and
Ouarzazate photovoltaic plants, which are part of the ‘Moroccan solar plan’.
18 – Afr ica, a major challenge for ENGIE
ENGIE in Algeria and Egypt
The Touat natural gas fields in Algeria ENGIE signed a production-sharing agreement with Sonatrach for the Touat region in southwest Algeria,
near the city of Adrar, in the Sahara desert.
The region is located 1,400 km southwest of Algiers and 700 km from the enormous Hassi R’mel field, the
heart of the Algerian gas system.
The partners created the TouatGaz consortium. An exploration and assessment campaign was carried out
between 2002 and 2009, confirming the presence of a quantity of natural gas sufficient to plan the field’s
development.
Ten wells were drilled. The proven and probable reserves are 68.5 billion m3 of natural gas and 8.5 million
barrels of condensates.
Production should start in 2017 for a period of 27 years. Expected output is 4.5 billion m3 per year.
Africa, a major challenge for ENGIE - 19
ENGIE in Egypt
In Egypt, ENGIE’s Exploration and Production subsidiary is active on four concessions, two exploration
concessions as an operator, and two production concessions. Egypt’s output is minimal compared to
ENGIE’s total production.
• West El Burullus, offshore exploration concession in the Nile delta (wholly owned by ENGIE, operator)
• Wadi Dib & East Wadi Dib, onshore exploration concession in the southeast part of the country (wholly
owned by ENGIE, operator)
• Alam El Shawish West, onshore production concession, in the western part of the country (ENGIE holds
25%, non-operator)
• Ashrafi, offshore production concession in the Gulf of Suez (ENGIE holds 50%, non-operator)
ENGIE also holds a 5% stake in the first train of the Idku liquefied natural gas plant and has a long-term
supply contract for 3.7 million tonnes per year.
20 – Afr ica, a major challenge for ENGIE
The challenges of access to
energy
Nearly 1.3 billion people (18% of the world’s population) still do not have access to electricity and nearly 2.7
billion people (40% of the world’s population) do not have access to clean and secure cooking systems. The
United Nations has designated the period 2014-2024 as the International Decade of Sustainable Energy for
All.
Energy consumption is not going to decrease, but will instead rise globally in the years ahead. This trend must
go hand in hand with a reduction in greenhouse gases.
For the population groups in question, mainly in Africa and South Asia, this is not some insignificant detail,
but a key factor governing everything else: access to healthcare, education, economic development, etc.
In the countries concerned, a pragmatic approach will make it possible to find funding and design an energy
mix that takes account of local situations and resources. This is something that will be handled differently
near a large urban area compared to rural areas where there is no energy infrastructure (off-grid).
The solutions envisaged by these countries are based on a balanced and sustainable mix, specifically the
massive use of low-carbon forms of energy (gas and renewable energies depending on the local situation:
solar, hydraulic, wind, biomass, biogas, etc.). Successful deployment will naturally require a close partnership
between the various stakeholders, sponsors, central governments, civil society and companies, including
social entrepreneurs.
Solutions now exist that enable access to energy that is clean and affordable (specifically thanks to the falling
cost of renewable energy technologies) while guaranteeing large-scale security of supply for countries.
Assuming that 500 million homes do not have access to energy, the deployment of such solutions would cost
approximately USD 50 billion per year to supply the infrastructure. To this must be added distribution costs
as well as maintenance and customer service costs in order to guarantee the long-term existence of systems
for their users. But this is achievable. And above all, the energy would be totally carbon-free in line with the
UN’s climate targets and recommendations.
ENGIE has extensive experience we are prepared to share in well-structured and balanced partnerships that
respect everyone’s obligations. Certain NGOs well known for their expertise (GERES, CARE, GRET) have also
been approached with a view to discussing new forms of NGO partnership – companies focusing on universal
and sustainable access to energy services. The Green Climate Fund receives USD 100 billion per year, part of
which could be dedicated to the implementation of universal access to energy.
Africa, a major challenge for ENGIE - 21
Rassembleurs d’Energies is ENGIE’s solidarity-oriented investment fund that invests in sustainable energy
access projects for population groups living in precarious conditions. The fund aims to invest in social,
economically viable projects sponsored by social entrepreneurs.
Projects supported by Rassembleurs d’Energies in Africa
The African companies that Rassembleurs d’Energies supports aim to deliver an electricity access service to
non-connected population groups by installing improved cooking appliances or individual solar-based
solutions.
Investment in Simgas in Tanzania
Rassembleurs d’Energies supports Simgas in Tanzania, which provides small rural farms with modular and
sustainable biodigesters that produce gas for use in cooking and fertiliser. These systems are used to
eliminate toxic emanations and improve crop output, leading to additional income. They also replace wood as
a fuel, thus helping to combat deforestation. The biodigesters are produced and distributed by the local
communities and can be installed in a few hours.
Investment in EGG-energy Nearly 80% of the population of Tanzania has no access to electricity. Created in 2009, EGG-energy offers an
electricity access service to non-connected populations via individual solar-based solutions that can provide
lighting, recharge mobile phones and run small electrical equipment (radios, televisions, fans, computers). It is
present in the Dar Es Salam region, in the central and northwest part of Tanzania. In 2013, the company
started distributing solar technology connected to ‘mobile money’ via the mobile telephone network. EGG-
energy currently manages the sale, funding and after-sales service of these solar solutions for homes and
small businesses. Rassembleurs d’Energies decided to support their growth by reinvesting in the company
during its second round of funding.
Investment in FENIX International As an innovative company, FENIX International distributes high-quality individual electrification solutions for
off-grid population groups in East Africa (Uganda, Kenya, Tanzania, etc.). It distributes its products in
partnership with the mobile telephone operators (MTN, Vodafone and Orange), giving it a great deal of
development potential. Rassembleurs d’Energies supported FENIX’s development by taking part in the
company’s second round of funding.
Donation to ICSEE (an NGO)
Since 2009, the ICSEE (International Collaborative for Science, Education and the Environment) has been
supporting Masai groups in northeast Tanzania in order to raise awareness and install improved cookers.
These fuel-efficient stoves fitted with chimneys enable smoke extraction and are linked to solar systems that
provide lighting and a system for charging mobile phones. Codegaz, an association of ENGIE employees,
carried out a mission in 2013 in partnership with the Group’s foundation on behalf of ICSEE (an NGO).
22 – Afr ica, a major challenge for ENGIE
Donation to FREEME/PlaNet Finance The FREEME project (promotion of renewable energies and energy efficiency in Morocco and Egypt)
encourages the development of renewable energies in those two countries via microfinance. The project is
based on four key pillars: building capacity for local and international stakeholders, helping micro-
entrepreneurs to sell efficient equipment, drafting appropriate financial models and creating an energy
microfinance fund, and raising the awareness of population groups about renewable energies. The project has
benefitted 4,800 people in both countries and has raised the awareness of nearly 2,400 micro-entrepreneurs
and low-income homes.
Donation to the Energies pour le Monde Foundation in Burkina Faso
In 2011, the Energies pour le Monde Foundation and ENGIE joined forces to create a partnership to
implement an electricity access programme in six localities in the province of Kourittenga in central Burkina
Faso. The purpose of the programme is to facilitate the involvement of a private operator – as a potential
investor – for the installation, operation and management of solar equipment.
Africa, a major challenge for ENGIE - 23
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