Copperbelt Energy Corporation Plc.

Ndola 10MW Biomass Power Project Feasibility Study (in Partnership with

EEP)

Contents

CEC Background Information

Ndola 10MW Biomass Power Plant Project Feasibility Study – ZAM219

CEC Background Information

Zambian Electricity Market4

Generation

Transmission

Distribution

Supply

Domestic market

Export market

LHPC

Mines Other

consumers

CEC

ZESCO

NE CEC: transmits and supplies electricityto the mining industry

ZESCO: a vertically integratedcompany which provides over 90% ofthe electricity generated in thecountry

Lunsemfwa Hydro Power Company(LHPC): produces about 50MW

Ndola Energy (NE): Operates a 50MWHFO Plant

ZESCO and a number of IPPs aredeveloping generation projects

Introduction 5

Historical Background:

• CEC was formed in 1997 from privatisation of Zambia Consolidated Copper Mines (ZCCM)

• Forerunners to CEC include:

• Power Division – ZCCM (post 1982)

• Copperbelt Power Company (CPC) (post 1964)

• Congo Border Power Company (1950’s)

2014 Awarded concession for development of 128MW HFO Plant in Freetown Sierra Leone

Signed PPA for 128MW with Sierra Leonean Government

2013 Acquired a stake in the Abuja Electrical Distribution Company through KANN Utility

Acquired a stake in the Shiroro Hydro Power Station

2012 CEC begins early work construction for Kabompo Gorge project

2011 Joint venture agreement with Liquid Telecommunications Holding Limited to form CEC Liquid Telecommunications Limited

2010Awarded infrastructure investment award – 2010 “Developer of the Year" presented by Africa Investor

2009Signed a joint venture agreement with RTAA (Pty) Limited as well as acquired 50% interests in Realtime Technology Alliance Africa Ltd

2008CEC was listed on the Lusaka Stock Exchange following the flotation of 25% of its shares to the public and employees

2006 77% of the company was acquired by Zambian Energy Corporation

1997 ZCCM Power Division was privatized in 1997 and CEC was formed

1982 Became the power division of ZCCM, following the formation of ZCCM in 1982.

1966 Company was renamed the Copperbelt Power Company

1953 Founded in 1953 as the Rhodesia-Congo Border Power Company

CEC Power Investments - Zambia

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Generation: Kabompo Gorge Hydro Scheme – 40MW (under development) Luapula Hydro Schemes – up to 800MW (Feasibility Studies)

Transmission: Copperbelt – Luapula Trans-Pedicle Line (PPP model) – to support

evacuation of power from Luapula

Renewables: Copperbelt Bio-mass Project (Feasibility) Bio-Diesel Refinery (Operatoinal - Commissioned 2011) Copperbelt 15MW Solar Project (Feasibility Studies) Kabompo 20 – 40MW Solar Project (Pre-feasibility)

Ndola 10MW Biomass Power Project Feasibility Study - ZAM219

Ndola 10MW Biomass Power Project Feasibility Study - Introduction

The CEC intends to partner with Copperbelt Forestry Company (CFC) to set up a 10MW biomass power plant to make use of the wood waste generated from the operations of CFC and other timber processing plants on the Copperbelt.

The harvesting and processing of timber produces an estimated 120,000 tons (dry weight) of wood waste (biomass) annually. This makes environmentally friendly management of this waste eminent.

CEC application for grant funding to undertake a bankable feasibility study of the project through EEP was approved in 2011 on a 50/50 cost share basis with EEP contributing a sum of €125,000

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Ndola 10MW Biomass Power Project Feasibility Study - Scope

A consultant was engaged to undertake the study and below is the summarized scope of the study:

1. A bankable feasibility study detailing:

A fuel feedstock supply chain strategy and biomass availability audit

Recommended power plant size based on (MW and MWh) based on feedstock strategy

Recommended technology to be employed (incineration, pyrolysis etc)

Recommended power evacuation route

A business plan for the project

Licensing and regulatory requirements

Identification of key project risks

2. Environmental and Social Impact Statement including:

Impact on waste disposal problems

Net impact on carbon cycle

Ecological sustainability of recommended model

Socio-economic impact including the impact of large scale harvesting to wood fuel procurement of the local people

Impact of desired power plant on settlements

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Ndola 10MW Biomass Power Project Feasibility Study – Outcome (1)

The feasibility study revealed opportunities and challenges for the realization of

a CEC run CHP plant fueled with woody biomass from CFC sawmilling and

forestry operations.

The main result of the study is that a CHP plant supply can be sustained from the

available biomass resources. The sawmill waste alone could sustain supply for a

3 to 4 MW (total heating capacity) CHP plant. The total capacity that could be

installed is 7 MW if supplied from sawmill and forestry operations residues.

If other sources (i.e. energy plantations) will be considered, capacity may

increase significantly up to 10 MW electrical capacity or more

Power generation would be by the use of steam turbines, a highly developed

technology for applications in thermal power stations and CHP or cogeneration

plants.

Heat generated in a combustion process is used to produce high pressure which

subsequently delivers mechanical power to drive an electricity generator.

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Ndola 10MW Biomass Power Project Feasibility Study – Outcome (2)

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Ndola 10MW Biomass Power Project Feasibility Study – Outcome (3)

Find potential customers in Ndola for exhaust heat generated by 10 MWel power plant and where applicable electricity customers

Evaluate several incentive schemes that could become applicable for CEC (subsidy options, government Feed-in- Tariffs, government schemes, donor cofounding and soft loans)

Analyse alternative technologies which could be leveraged to increase income (pelleting, briquetting and bio-coal)

ESIA: Employ measures to mitigate Noise and Air pollution

Ndola 10MW Biomass Power Project Feasibility Study - Challenges

Delayed land acquisition process

Low tariffs

Firm-up feedstock supply

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Ndola 10MW Biomass Power Project Feasibility Study – Way Forward

Conclude land acquisition process

Submit final ESIA report to ZEMA

Engage possible heat off-takers

Explore market for electricity off-takers (ReFIT) PPA?

Financing arrangements (Debt, interest free loans, grants etc)

Investigate the possibility of setting up a managed energy forest i.e. fast growing tree species for sustainability

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Ndola 10MW Biomass Power Project Feasibility Study – Way Forward

Thank you for your attention