1. ACWA Power Khanyisa Thermal Power Station (RF) (Pty) Ltd
GENERATION LICENCE PUBLIC HEARING
27 March 2018

2. 01
Contents

3. Table of Contents Project Overview Key Project Details02
Table of Contents
Project Overview
Key Project Details
Site Location and Key Interfaces
Basic Description of Plant Operations
Examples of regulatory consents
Project Structure and Key Stakeholders
Project Structure
Key Stakeholders
Key Developmental Impacts
Legislative and jurisdictional overview
Objection and Responses
Conclusion

4. 03
Project Overview

5. Key Project Details Project Overview 04 Plant Capacity
Key Item
Description
Energy planning mandate
IRP / Ministerial Determination / Department of Energy Coal Baseload IPP Programme
Scope
Develop, Build, Own, Operate and Decommission (BOOD)
Plant Capacity
306 MW (net) (2x153 MW (net) Units)
Technology
Circulating Fluidized Bed (CFB) boilers
Dry Cooled condenser
Proven technology
Emissions Standards
Plant is designed to meet strict IFC/World Bank emission guidelines for a degraded air-shed area.
Grid Connection
The facility will be connected by 400 kV transmission line to the existing Eskom Transmission Network located 2.5km from the Project site
Fuel Source
Discard coal beneficiated and supplied from dumps within 4-8 KM from the site – allowing the
productive economic use of very poor quality coal.
30 year fuel supply agreement providing fuel price certainty over the term
Water Source
Dirty water (mine waste), reclaimed and treated at the EWRP – 5km away. 30 year water supply agreement providing water price certainty
Construction Period
37 Months Unit 1, 41 Months for the Plant from notice to proceed to the EPC contractor
Offtake
30 year PPA with ESKOM for 100% of the capacity and energy.
Implementation Agreement
Covers Economic development obligations to Government of South Africa (DOE) for entire construction, commissioning and operations

6. Site Location and Key Interfaces
Project Overview 05
Site Location and Key Interfaces
The site is located 10 km south of eMalahleni within the SACE (South African Coal Estates) on previously undeveloped land owned by Anglo American.
4-8 Km from the fuel source
5 km from the eMalahleni Water Treatment Plant – water source
3 km from ash disposal site - previously an open cast mine.
2.5 Km from the 400 KV grid connection point
Proposed

7. Basic Description of Plant Operations- CFB Boiler
Project Overview 06
Basic Description of Plant Operations- CFB Boiler
Principle
Heating solid fuels in a fluidized bed through contact with a gas or liquid
In situ injection of absorbent (limestone) in the boiler to reduce SOx emissions
Advantages
Highest fuel flexibility (allows the plant to use discard coal, which ordinarily would have not been beneficiated)
Admits fuel fluctuations and other
disturbances
Good solid mixing
Lower temperature – lower NOx emissions
All Key Equipment (Boiler, Turbine, emission control systems etc.) to meet stringent proven technology requirements of the RFP, Sponsors and Lenders

8. Examples of Key Environmental and Regulatory consents
Project Overview 07
Examples of Key Environmental and Regulatory consents
Item
Authorisation 1.
Provisional Atmospheric Emission Licence (17/4/AEL/MP312/14/20) in terms of the National Environmental
Management: Air Quality Act 2.
Integrated Water Use Licence issued in terms of the National Water Act 3.
Environmental Authorisation for the Khanyisa Project issued in terms of the Environmental Impact Assessment Regulations published in terms of the National Environmental Management Act 4.
Overhead Line Environmental Authorisation 5.
Khanyisa Water Pipeline Environmental Authorisation 6.
Rezoning approval (Amendment scheme 2023) 7.
Civil Aviation Approval
The Plant will be constructed and operated in accordance with applicable regulatory approvals and management systems

9. Project Structure and Key Stakeholders08
Project Structure and Key Stakeholders

10. Project Structure Project Structure and Key Stakeholders 09 Eskom
International Company for Water and Power Projects (ACWA Power)
Thebe Investment Corporation (Pty) Ltd
Palace Consulting Engineers (Pty) Ltd
Pele Energy Group (Pty) Ltd
Hulisani Limited
Foreign Shareholder
40%
Local Shareholders
60%
Equity
Wrapped EPC Contract
EPC Contractor (General Electric)
Debt
Lenders
ACWA Power Khanyisa Thermal Power Station (RF) (Pty) Ltd
Power Purchase, Connection, Self-Build, Ancillary Services Agreements
Eskom
Khanyisa O&M Company (NOMAC + PALACE GROUP)
Department
Implementation Agreement
Wrapped O&M Contract
of Energy
“DoE”
Limestone supply agreement
Various
Land lease
agreement
Coal Supply Agreement
FuelCo
Water Supply greement
Anglo Operations Limited A
Anglo Operations Limited
Anglo Operations Limited

11. Lead Developer and Sponsor – ACWA Power
Project Structure and Key Stakeholders 10
Lead Developer and Sponsor – ACWA Power
ACWA Power is a developer, investor, co-owner and operator of a portfolio of power generation and desalinated water production plants;
Long Term Investor consistently delivering power and water reliably and at the lowest possible cost
Established pipeline greater than $4 billion in SA across renewables and thermal power projects with
circa. $700 million of own investment committed;
Lead developer, investor and operator of the 50 MW Bokpoort CSP Project, with 9,3 hours of storage and 100MW Redstone CSP Project with up to 12 hours storage;

12. Development Partners/Shareholders
Project Structure and Key Stakeholders 11
Development Partners/Shareholders
Established in 1992, one of the leading black-owned investment companies with an asset portfolio of over R6 billion spanning investments in tourism, mining, renewable energy, infrastructure, telecoms, financial services and healthcare
Thebe’s business focuses on three work streams namely, integrated energy and resources, business that constitutes the service industry and the third being a focus on community development and transformation.
A 100% black youth owned IPP that develops, owns and operates a diversified power portfolio comprising of wind, solar, gas and coal;
Part of the larger Pele Energy Group that owns and operates 1,200MW of power projects in operations and/or advanced development;
The group offers asset management, O&M, construction management and social and enterprise development and advisory services.
A JSE listed investment company with a pipeline of sustainable energy projects across coal, solar, wind and hydro plants;
Majority black owned company owned company with investment stakes in GRI (Global wind tower producer), Redcap Energy (80MW), and Rustmo PV Solar Farm (7MW).
A 100% black owned multi-disciplinary service in EPC and O&M in the power (generation, transmission, distribution, DSM, metering), water and sanitation, housing and municipal infrastructure sectors
All Partners will be integrally and actively involved in the implementation of the Project in different roles

13. EPC Contractor Project Structure and Key Stakeholders12
EPC Contractor
The Engineering, Procurement and Construction (EPC) will be undertaken under a date certain, fixed price lump sum turnkey EPC Contract with General Electric (GE) that ensures that the consumer is not exposed to construction risks.
Global EPC experience including power plant concept, design, manufacturing and construction;
As EPC, nearly 580 GW in steam turbine generator sets and 835 GW of boilers worldwide with experience with CFB plants up to 660 MW in plant size;
Committed to RSA since 1898 with 923 local employees 
R660 million investment in GE Africa Innovation and Training Centre; R200 million committed to local supplier development.
In the South African power sector: 
Equipment in 74% of the installed base with maintenance support
9.6 GW under execution (Medupi and Kusile) with R 19 billion of local procurement, 1,248 jobs created and R 121 million spent on CSI programmes (bursary, schools etc)
In the South African transportation sector: 
233 locomotives to be supplied with > 55% local content and 21 local suppliers; R 1.2 billion committed spend with Transnet
11 locomotives exported from SA already
In the South African healthcare sector: 
6,000 clinical devices in public and private hospitals Mother and child social entrepreneurs programme US$ 1 m donated to Nelson Mandela Children’s Trust
The Project has engaged with a extremely experienced, credible and committed EPC Contractor to ensure successful implementation

14. O&M Contractor Project Structure and Key Stakeholders13
O&M Contractor
The Operations and Maintenance (O&M) of the Project will be undertaken by an O&M Contractor under a
30 year, “turnkey” O&M Contract that ensures that the consumer does not bear O&M cost risks;
The O&M Contractor is a consortium comprising NOMAC (an ACWA Power subsidiary) and Palace.
Wholly owned subsidiary of ACWA Power established in 2005
Provides O&M services for a multi-technology, multi-fuel portfolio of c. 17 GW and 2.5 m3/day of desalinated water
Integrated HSE and quality management system have been independently certified under the ISO 9001:2008, ISO 14001:2004, and OHSAS 18001:2007 standards
Established OEM supplier base
Is the O&M contractor on ACWA Power’s South African Bokpoort CSP Project
The Project has engaged with a competent O&M Contractor with knowledge of the local environment and secured a “turnkey” O&M solution over the term of the PPA

15. Key Developmental Impacts14
Key Developmental Impacts

16. Job Creation and Local / BEE Ownership15
Key Developmental Impacts
Job Creation and Local / BEE Ownership
Creating new jobs in the country and Mpumalanga Province in particular
Construction/Commissioning phase
Operational phase
Duration of phase
41 months
30 years
Direct Job creation
~ 3000 jobs at peak of construction and ~ 700 on average with commitments towards:
Local employment
Employment of black people, youth
and women
~ 150 permanent jobs with commitments towards:
Employment of black people,
youth and women
The above excludes indirect job creation (e.g. manufacturing, coal supply, limestone supply etc.)
Driving the national transformation agenda – significant local/BEE ownership
Project Ownership
Shareholding by South Africa Entities – 60% Shareholding by Black People - ~ 43%
O&M Ownership
Shareholding by Black People - 43%
Fuel Supplier
Shareholding by Black People - ~ 70%

17. Local Content Key Developmental Impacts Significant Local Spend16
Key Developmental Impacts
Local Content
Significant Local Spend
Construction/Commissioning phase
Operational phase
Duration of phase
41 months
30 years
Local Content Spend
~R4-5 billion on South African
procured goods and services
Annual operational spend on resources, goods and services - ~R12 billion over the project life (excluding fuel)
Preferential Procurement Spend
~R3 billion on preferential procurement (BBBEE, Black Enterprises, EME, QSE, Women owned companies)
~R8.5 billion on preferential procurement (BBBEE, Black Enterprises, EME, QSE, Women owned companies) over the project life (excluding fuel)

18. Economic development Key Developmental Impacts17
Key Developmental Impacts
Economic development
During the lifetime of the project, ~R1600 million will be spent towards socio-economic development programmes:
Socio- Economic Development
Following a needs assessment and considering Khanyisa’s business activities, communities will be targeted for social infrastructure linked to energy and water, education (targeting science and maths) and healthcare
Skills development
Scarce and critical skills needs have been mapped against a learning matrix for bursary and workplace training opportunities, supported by learnerships, internships, apprenticeships and mentorships as appropriate.
Supplier
development
Supplier development plan mapped and Preferential procurement policy will seek to maximise opportunities to procure from BEE, EME/QSE, women-owned businesses.

19. Legislative and jurisdictional overview18
Legislative and jurisdictional overview

20. Legislative Overview www.acwapower.com 19 Integrated Energy Plan (DOE)
Integrated Resource Plan for Electricity (DOE)
Coal Baseload IPP Programme (DOE)
Ministerial Determination (in consultation with NERSA) Dec 2012
(DOE)
IRP 2010 (DOE)
RFP
(DOE)
Preferred Bidder Award/Project Development Undertaking
(IPP)
Regulatory and Environmental Consents
Environmental Consents (DEA)
Generator Licence (NERSA)
PAEL
( LOCAL AUTHORITY )
EA (DEA)
WUL (DWA)
Review of DEA
decision
Anticipated Appeal
“Provisional”
Appeal
Objection
CONCLUSION OF CONTRACTS

21. NERSA NEMA ACT 107 OF 1998 NEM:AQA ACT 39 OF 2004 NWA ACT 36 OF 1998
Jurisdictional Overview 20
NATIONAL ENERGY REGULATOR ACT 40 OF 2004
ELECTRICITY REGULATION ACT 4
OF 2006 (ERA)
Regs
NERSA
Section 34 Determinations
NEMA
ACT 107 OF 1998
NEM:AQA ACT 39 OF 2004
NWA
ACT 36 OF 1998 EA
DEA
LICENSING AUTHORITY
PAEL
DWS
WUL

22. “2. Objects the ERA Objects of Act The objects of this Act are to -
Jurisdictional Overview 21
Objects the ERA
“2.
Objects of Act
The objects of this Act are to -
(a)
achieve the efficient, effective, sustainable and orderly development and operation of electricity supply infrastructure in South Africa;
ensure that the interests and needs of present and future electricity customers and end users are safeguarded and met, having regard to the governance, efficiency, effectiveness and long-term sustainability of the electricity supply industry within the broader context of economic energy regulation in the Republic;
facilitate investment in the electricity supply industry; facilitate universal access to electricity;
promote the use of diverse energy sources and energy efficiency; promote competitiveness and customer and end user choice; and facilitate a fair balance between the interests of customers and end
users, licensees, investors in the electricity supply industry and the
public.”
(b)
(c)
(d)
(e)
(f)
(g)

23. Powers and duties of NERSA
Jurisdictional Overview 22
Powers and duties of NERSA
“4.
Powers and duties of Regulator
The Regulator -
(a) must -
(i)
consider applications for licenses and may issue licences for -
(aa) the operation of generation, transmission or distribution facilities; (our underlining)
(bb)
(cc)
the import and export of electricity; trading;
(ii)
(iii)
regulate prices and tariffs; (our underlining)
register persons who are required to register with the Regulator where they are not required to hold a licence;
issue rules designed to implement the national government’s electricity policy framework,
the integrated resource plan and this Act;
(v) establish and manage monitoring and information systems and a national information system, and co-ordinate the integration thereof with other relevant information systems;
enforce performance and compliance, and take appropriate steps in the case of non-performance;
(iv)
(vii)
(b) may - (i)
(ii)
(iii)
mediate disputes between generators, transmitters, distributors, customers or end users; undertake investigations and inquiries into the activities of licensees;
perform any other act incidental to its functions.”

24. Section 34 of the ERA Jurisdictional Overview23
Section 34 of the ERA
“ Section 34 New generation capacity
(1) The Minister may, in consultation with the Regulator-
(a) determine that new generation capacity is needed to ensure the continued uninterrupted “supply of
electricity;
determine the types of energy sources from which electricity must be generated, and the percentages of
electricity that must be generated from such sources;
determine that electricity thus produced may only be sold to the persons or in the manner set out in such notice;
determine that electricity thus produced must be purchased by the persons set out in such notice;
require that new generation capacity must-
(i) be established through a tendering procedure which is fair, equitable, transparent, competitive and cost- effective;
provide for private sector participation.
(ii)
The Minister has such powers as may be necessary or incidental to any purpose set out in subsection (1), including the power to- …
The Regulator, in issuing a generation licence-
is bound by any determination made by the Minister in terms of subsection (1);
may facilitate the conclusion of an agreement to buy and sell power between a generator and a purchaser of that electricity.”

25. BASELOAD IPP PROCUREMENT PROGRAMME 2012
Jurisdictional Overview 24
DETERMINATION UNDER SECTION 34(1) OF THE ELECTRICITY REGULATION ACT 4 OF 2006
BASELOAD IPP PROCUREMENT PROGRAMME 2012
Published under Government Notice 1075 in Government Gazette of 19 December 2012
The Minister of Energy (“the Minister”), in consultation with the National Energy Regulator of South Africa (“NERSA”), acting under has determined as follows:section 34(1) of the Electricity Regulation Act 4 of 2006 (as amended) (the “ERA”) and the Electricity Regulations on New Generation Capacity (published as GNR. 399 in Government Gazette No, dated 04 May 2011) (“Regulations”), 1.
that baseload energy generation capacity is needed to contribute towards energy security, including 2500 megawatts (MW) to be generated from Coal, which is in accordance with the capacity allocated to “Coal (PF, FBC, Imports)”, under the heading “New build”, for the years 2014 to 2024, in Table 3 of the Integrated Resource Plan for Electricity (published as GN 400 of 06 May 2011 in Government
Gazette No ) (“IRP ”);

26. Requirements of section 10 of the ERA
Jurisdictional Overview 25
Requirements of section 10 of the ERA
“Section Application for licence
(1)
A person who has to hold a licence in terms of section 7 must apply to the Regulator for such a licence in the form and in accordance with the prescribed procedure.
Such an application must be accompanied by the prescribed application fee.
Any application contemplated in subsection (1) must include -
a description of the applicant, including vertical and horizontal relationships with
other persons engaged in the operation of generation, transmission and distribution facilities, the import or export of electricity, trading or any other prescribed activity relating thereto;
such documentary evidence of the administrative, financial and technical abilities of the applicant as may be required by the Regulator;
a description of the proposed generation, transmission or distribution facility to be constructed or operated or the proposed service in relation to electricity to be provided, including maps and diagrams where appropriate;
a general description of the type of customer to be served and the tariff and price policies to be
applied;
the plans and the ability of the applicant to comply with applicable labour, health, safety and environmental legislation, subordinate legislation and such other requirements as may be applicable;
a detailed specification of the services that will be rendered under the licence;
evidence of compliance with any integrated resource plan applicable at that point in time or provide reasons for any deviation for the approval of the Minister; and
such other particulars as the Minister may prescribe”

27. Objections and Responses26
Objections and Responses

28. groundWork Objections
Objection to generation licence application: groundWork 27
groundWork Objections
In summary, groundWork objects on the following basis (as extracted from their objection):
The application for a generation permit should be rejected as it is
incomplete;
The redaction or withholding of portions of the application and annexures denies affected persons a meaningful opportunity to review and submit comments and objections on the proposed application;
Environmental pollution from the Khanyisa Power Plant would violate the Constitution and applicable environmental legislation;
The Khanyisa would not be in public interest; and
The Khanyisa would not be in line with the objects of the ERA.
groundWork’s objections can be divided into two categories:
The complaint about the redaction of the licence application made available to the
public; and
groundWork seeks to persuade NERSA to reconsider decisions outside of its jurisdiction; and

29. ACWA Power has tendered to make its confidential
Objection to generation licence application: groundWork 28
Redacted information
NERSA and groundWork are fully appraised of the confidentiality constraints.
The need for the redaction of confidential information goes to the integrity of the bid process and is aligned with section 217 of the Constitution and PAIA
ACWA Power has tendered to make its confidential
information available to groundWork for inspection.
On 6th April 2017, NERSA made a ruling in this regard confirming information that is confidential and information that NERSA has ruled not to be confidential has been provided

30. NEMA does not confer any authority on NERSA
Objection to generation licence application: groundWork 29
NERSA’s Jurisdiction
NERSA’s jurisdiction and powers are created by and confined to NERA and NERSAA.
NEMA does not confer any authority on NERSA
NERSA has no jurisdiction to grant or refuse:
Environmental Authorisations
Water licences
Atmospheric emission licenses
NERSA has been consulted in terms of Section 34(1) of the
ERA regarding:
the types and percentages of energy sources
groundWork’s objections have no place in this forum.

31. 30
Conclusion

32. The application is in compliance with the requirements of the ERA
Conclusion 31
The application is in compliance with the requirements of the ERA
This presentation is intended to amplify ACWA Power’s application to NERSA for a generation licence in terms of section 7 of the ERA, as well as to support ACWA Power’s response to groundWork’s objection.

33. Key ACWA Power Contact:
Thank you
Key ACWA Power Contact:
Prabashen Govender
Project Director : ACWA Power
Mobile :