THE DEVELOPMENT OF THE BRONKHORSTSPRUIT BIOGAS PROJECT

MARCH 2015

CONTACT:

Sean Thomas, CEO

+27 (0) 79 496 6725

+27 (0) 11 067 4747

sean@bio2watt.com

First deal of its kind in South Africa

PROJECT SUMMARY• Bio2Watt, is a Waste to Energy Project Development Company which owns, develops

and builds the projects it is involved in.

Bronkhorstspruit Biogas Project (Pty) Ltd (“BBP”) is a Renewable Energy IPP:

• 4.4MW installed electrical capacity and further 3MW available for greenhouse farming

• Electricity will be sold to BMW in Pretoria, roughly 60kms from the site.

• Total project costs amount to R150m, broken down as follows: R36m equity, R16m dti

(SA govt) grant, R98m loan from the Industrial Development Corporation

• The project is structured as a limited recourse finance transaction. Equity investors

include Norfund, the EPC contractor, two impact funds and Bio2Watt.

• Project will officially start evacuating power in April 2015

THE BRONKHORSTSPRUIT BIOGAS PROJECT

WASTE REDUCTION

JOB CREATIONMORE

RENEWABLE ENERGY

DEVELOPING LOCAL EXPERTISE

FLARE

MIXER

FOOD PRODUCERS

DIGESTORFERTILISER

OFF-TAKER

3MW

GAS ENGINES

POWER PURCHASING AGREEMENT

BIOGAS

ORGANIC WASTE

WASTE

BENEFITS

AVOID WATER POLLUTION

BYPASS LANDFILLS

AVOID GHGEMMISSIONS

23-04-18 Confidential

Anaerobic Digestion

SOME INTERESTING FACTOIDS

1,5001,5001,5001,500

R8MR8M

7 years7 years7 years7 years From when project was started to Financial Closure March 2014

Pages of Legal documents – Typically agreements would lapse

… spent in legal fees

BBP – PROJECT TIMELINE

PPA negotiations PPA negotiations

Environmental Impact AssessmentEnvironmental Impact Assessment

Supply AgreementsSupply Agreements

Pre-feasibility study

Pre-feasibility study

Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Aug 2012 Mar 2013 Feb 2014 Apr 2015

Connection and Wheeling AgreementsConnection and Wheeling Agreements

Licenses & Permits Licenses & Permits

Debt/Loan Agreement - IDCDebt/Loan Agreement - IDC

EPC AgreementEPC Agreement

O&M Agreement

O&M Agreement

Equity InvestorsEquity Investors

ConstructionConstruction

PROJECT TIMELINE

Environmental Impact Assessment

Environmental Impact Assessment

Supply AgreementsSupply Agreements

Pre-feasibility study

Pre-feasibility study

Start 6 months 12 months 18 months 24 months 30 months 36 months 42 months 48 months

Connection and Wheeling Agreements

Connection and Wheeling Agreements

Licenses & Permits Licenses & Permits

Debt/Loan Agreement - IDC

Debt/Loan Agreement - IDC

EPC AgreementEPC Agreement

Operations Operations

Equity InvestorsEquity Investors

ConstructionConstruction

PPA negotiations PPA negotiations

23-04-18 Confidential

Challenges specific to SA

- Manure has to be at most 4 weeks old

-Mechanism to control stones from the manure

-Manure alone is not sufficient to make the plant viable

-Support from farm is critical e.g. grey water is required ±300m3/day

-At this stage Electricity price will be higher than municipality or Eskom

-The plant will require an off-taker that operates baseload

-Returns are low and drawn out - requires patient investors

-A very long list of licenses required

23-04-18 Confidential

Licenses required for biogas project

LICENSES: - EIA

- WULA

- Waste License

- Air Emission License

- SALA

MUNICIPALITIES: - Building Plan approval

- By Laws

- Consent of Use

DOE, NERSA & ESKOM: - Generation License

- Letter from DOE

- Access to grid

 

23-04-18 Confidential

Opportunities for large SA feedlots

- Though the power is not sold to the feedlot owner it will be used in the vicinity

of the plant – offering security of supply & possibility to access additional

capacity which is valuable in current power constrained context

- Availability of a higher grade fertiliser both liquid and solid on site

- Access to a source of heat and carbon dioxide which could allow Farm to

diversify

- Lease of land

- Better management of waste supported by Department of Environmental

Affairs

How was this possibleFarm:

-Buy-in & support from Farm is critical

-Extensive amount of input required e.g. banks even request access to books to

ensure Farm’s sustainability

Funding

-Patient investors

-Development Finance Institution providing attractive loan

Off-taker

- Willing to pay a premium for Green Electricity

23-04-18 Confidential

BRONKHORSTSPRUIT BIOGAS PROJECT

THANK YOU