1. Industrial Development Corporation
25 March 2015
IDC funding for Green Energy – with a Waste focus
Rishel Dharmapall
Green Industries SBU

2. IDC funding options for various stages of projects
Content
IDC and its mandate
IDC funding options for various stages of projects
IDC Green SBU - Green Funds
Types of Green Waste Projects funded by IDC
Waste recycling
Waste gases/heat for cogen
Biogas projects & CHP & in Transport
Developing Waste energy projects n
IDC’s role & offer

3. The Industrial Development Corporation
Established: 1940
Type of organisation: Development Finance Institution (DFI)
Ownership: South African Government
Total assets: over R112 billion
Main business area: Providing funding for entrepreneurs and projects (greenfields and expansions) that are contributing to industrialisation and job creation
Geographic activities: South Africa and the rest of Africa
Products: Wide range of custom financial products to suit a project’s needs including debt, equity, guarantees or a mixture of these
Stage of investment: Early stage (feasibility), commercialisation, expansion
Project development: Identification and development of projects adding to the industrial base

4. Positioning as Industrial Development Funder
Greater importance on social and developmental objectives
Greater importance on financial objectives
Government / NGOs
DFIs
Commercial Financiers
Non-commercial focus
Fiscal transfers and grants
Development objectives (social)
Commercial and development focus
Sharing risk
Internally generated funds, government funds, loans
High commercial focus
Private sector capital
Financial objectives
Known risks
Industrial Development Corporation (IDC)
Development Bank of Southern Africa DBSA)
National Empowerment Fund (NEF) etc
IDC encourages cooperation with a variety of these institutions to achieve its goals
IDC addresses market failures / gaps by supporting investments, which may otherwise not happen, in partnership with private sector companies

5. IDC can be involved in Project Development Phases
Concept (Pre-scoping) stage
Fit IDC & SBU mandate?
Viability?
Screening of other parties/shareholders?
Scoping stage
Desktop financial model and BA type report
Outline scope of work to implementation stage
Focus Pre-feasibility & Feasibility
Request project development budget (internal and external costs)– used to carry out subsequent stages
Pre feasibility study
Review of Technology/Process and identify preferred choice
Operating partner
Regulations (e.g. Carbon credits, EIA, Waste License, etc)
Raw material security (e.g. waste supply Volumes)
Offtake/Supply of Product
Financial model
Feasibility study (may have 2 steps to Bankable)
Pilot Study
Financial model
Signing of all Agreements
All Regulatory approvals
Funding Approval for debt and equity
Implementation
Plant construction,
commission and operation

6. Green Industries SBU: Focus
Renewable Energy: Non-Fuel Power
Energy efficiency
Services related to renewable energy & energy efficiency
Local manufacturing related to renewable energy & energy efficiency
Wind Power Generation
Concentrated Solar Power
Heat, Electricity & building efficiency
Cleaner production / Industrial Efficiency
Transport Efficiency
Solar Photo Voltaic Power
Hydro
Fuel Based Energy
Waste to Energy
Biogas/ CHP/Cogen
Emission and pollution mitigation
Bio Fuels
Air pollution control
Waste Management/ Recycling
Clean stoves
Bio Ethanol
Bio Diesel

7. Fuel Based Green Energy: Industry structure
Municipal solid waste or
Biomass or Tyres
Grown biomass
Organic waste
Sewage sludge
Animal litter
Feedstock
Waste Gas
Pyrolysis
Sorting
Anaerobic Digestion
Combustion Incineration or Waste heat
Gasification
Primary Process
Steam turbine or organic rankine cycle
Electricity
Industrial fuel
On-site heating
Vehicle fuel
End Use
Recycling
CHP/Cogen
Internal gas combustion
Gas Cleaning
Liquefied Biogas (LBG)
Compressed Biogas (CBG)
Steam
Piped gas
Secondary Process

8. Process various options
Fuel Based Green Energy: Approach Biogas, Waste to energy and CHP/Co-generation
Feedstock (Fuel) security:
No feedstock security, no start
Challenge: Long term supply agreement to cover debt tenure + 2 years
Quality, quantity, price & period
MFMA requirements for municipalities
Feedstock
Offtakes
Revenue
Process various options
Investment decision
Process/Investment options:
Driven by feedstock qualities, quantities term and off take options
Typical cost R15-35m/MW
High load factors (eg 90%)
Offtakes:
Low O&M cost
If Offtake/feedstock price strong
Repay debt quickly
Project

9. Green Energy Efficiency Funds, eg, KfW & Afd
Concessional debt funding
Technical assistance grant
IDC
Develop Green Industries
Capacity building in clean energy finance
Addresses market failure and funding barriers
Reduced interest loan - up to Prime less 2% or fixed at 10% (fund dependent)
Long payment term ( up to 15 years)
Stimulate energy efficiency and renewable energy investment
Technical assistance to: -identify energy efficiency and renewable energy opportunities -calculate the economic and financial benefits
-support the selection of eligible equipment and enhanced performance technologies.
Promote long term business competitiveness
-Modernisation of businesses -Increased company profitability
-Improved product quality and production capacity
-Lower vulnerability to increasing energy prices.
Contribute to global climate protection
-Measurement of energy savings and carbon reduction
-Enhanced company image due to contribution to reduction of carbon footprint.

10. GEEF Characteristics Criteria Own use Energy savings of 25% +
Facility size: R500 million
Loan size: R1 – 50 million
Interest rate: Prime less 2%
Term: Up to 15 years, based on payback period of the investment
Standard fees will apply
The total credit facility is R500 million
And provides loans ranging from R1 million to R50 million at a concessionary rate of prime less 2%.
GEEF allows for loan repayments of up to 15 years, depending on the payback period of the energy efficiency or renewable energy technology
Standard IDC fees apply including a raising fee of 1% and a commitment fee of 0.5% per annum
All IDC credit policies and procedures will apply.
Programme supported by the German Cooperation and Development Ministry

11. Agency Development & Support (ADS)
Establishment & facilitation of funds and support for public local economic development agencies
Designed to bridge gap between the public and private sectors and other development organisations at a local level
Currently funding some 34 agencies in various stages of development
The total credit facility is R500 million
And provides loans ranging from R1 million to R50 million at a concessionary rate of prime less 2%.
GEEF allows for loan repayments of up to 15 years, depending on the payback period of the energy efficiency or renewable energy technology
Standard IDC fees apply including a raising fee of 1% and a commitment fee of 0.5% per annum
All IDC credit policies and procedures will apply.

12. Constraints for Project Development
Compared to EU: Cheaper electricity, lower landfill tipping fees, minimal offtake for heat.
Access to municipal waste (DWA infrastructure for hydro)
MFMA regulations on length of contracts
Inability to fund municipalities
PPP regulations & complexities, skills capacity in Municipality
Bankable off-takers
Wheeling arrangements
Regulatory framework for alternative fuels

13. Jobs versus crude refining Jobs per 10 % national fuel volumes
Jobs from Gas Sources
Gas System
Jobs/R million Capex *
Jobs versus crude refining
Jobs per 10 % national fuel volumes
Biogas from Waste
0.3
25x
40 000
Biogas from Crops 2
200x
Landfill Gas
0.4
20x
25 000
CNG Only 1
14x
14 000
* Includes vehicle conversions distribution & filling station capex

14. Prospects Thank you Industrial Development Corporation
19 Fredman Drive, Sandown
PO Box , Sandton, 2146
South Africa
Telephone
Facsimile