COEGA PRESENTATION CCGT EOI SESSION 14 DECEMBER 2009
CONTENT • Coega General Overview • The Project – Overview – Technical Conceptual Study – Commercial Aspects • Other Considerations • CDC Procurement Policy • Questions
COEGA GENERAL OVERVIEW
ORGANISATIONAL MANDATE • Attraction of Investment (Local & Foreign) • Enable Technology Transfer • Human Capital Development • Creation of Decent Work • Economic Development • Facilitate Enabling Infrastructure Investments • Assist Government on Project Delivery
COEGA BUSINESS MODEL COEGA DEVELOPMENT CORPORATION COEGA DEVELOPMENT CORPORATION EXTERNAL EXTERNAL ECONOMIC ZONE (+NMBSP) ECONOMIC ZONE (+NMBSP) SERVICES SERVICES Investment Investment Infrastructure Infrastructure Operations Operations Human Capital Human Capital Consultancy Services Consultancy Services Promotion Promotion Development Development Investor Services Investor Services (OSISC) (OSISC) SMME Development SMME Development Employee Relations Employee Relations Support Services Support Services Recruitment and Recruitment and Global Markets Global Markets Infrastructure Infrastructure Infrastructure Infrastructure Training and Training and Infrastructure Infrastructure Development Development Development Development Development Development Development Development Negotiations Negotiations Management Customs + Customs + Placement Placement Portfolio Portfolio Facilities Facilities Logistics Logistics Planning Planning Project Project SHE SHE Research Research Marketing Marketing ICT ICT Systems Systems Finance Finance Audit Audit Human Resources, Legal, Office Management, Travel Human Resources, Legal, Office Management, Travel
• Framework Plan: Phased Development
CHANNELS OF INTERVENTION • Industrial Development Zone (IDZ) • Nelson Mandela Bay Logistics Park (NMBLP) • Physical Infrastructure Programme Management • Strategic Advisory • Human Capital Development (HCS) • Economic Research
WIDER ECONOMIC RELEVANCE
POLICY RELEVANCE OF COEGA • Facilitate the creation of an industrial complex with clear economic advantages; • Provide the location for the establishment of strategic investments; • Take advantage of existing capacity that promotes integration with local industry • Increase value-added production; and • Create employment and other economic and social benefits in the region in which it is located
SIGNED INVESTORS SECTOR VALUE DIRECT INDIRECT EMPLOYMENT EMPLOYMENT Chemicals R6 billion 800 1800 Logistics R85 million 417 21178 Auto components R694 million 616 1682 Alternative energy R1.5 billion 50 350 BPO R31 million 120 48 Downstream metals (Iron and R75 million 120 100 Steel) Food & Beverage Industries R4 billion 5015 9450 Manufacturing R50 million 50 40 Total R12.4 billion 7188 34648
CDC & THE CCGT PROJECT • CDC facilitated in terms of attracting investment and enabling IPP • Consistent to policy of Government • Worked with Departments of Mineral & Energy and now Department of Energy • Takes cognisance of changes in the energy sector institutions and roles
THE PROJECT
PROJECT OVERVIEW • Background – Project was started by major entities – Independent power production was a challenge and the entities withdrew from the process – Project is relevant and has been accepted at National Gov. level – CDC was involved early 2008 to do groundwork for an IPP • Motivation – Development of IDZ taking the future needs into account – There is a need for a baseload power station in the EC – Government imperative of opening the IPP market – The project is in line with the Integrated Resource Plan – Reduce SA’s carbon footprint – Efficient technology – Diversification of SA’s fuel sources
PROJECT OVERVIEW (2) • Concept – Up to 3200MWe envisaged – Baseload Power Station – LNG as the preferred fuel source • Why Coega – Transmission lines and substation availability – Port of Ngqura with potential infrastructure and logistical facilities – Large Industrial users in the IDZ – Seawater cooling availability – Grid stability with EC baseload – Local power security – Availability of land
SITE LOCATION Floating Solution Cryogenic pipelines
TECHNICAL CONCEPTUAL STUDY • Pre-Feasibility Report – The Project – Project Owner – Value Proposition & Alignment of Objectives – Economic Analysis – Electricity Sector Analysis – Natural Gas Sector Analysis – Regulatory and Legal Framework – Commercial Structures – Target Strategic Partners – Technical Study – Financing Options – Project Financial Viability – Risk Mitigation • Class II Cost Estimate (ROM 40%) 16
TYPICAL POWER PLANT INTERFACES 17
TYPICAL DESIGN BASIS • Site location is fixed (bordered by Zone 8 & 10) • 3200 MWe Combined Cycle Power Plant (4 x 800 MWe) • Fuel is Natural Gas (regasified on site from imported LNG) • Some municipal effluent (water) available for re-use Power Plant Site 18
CONCEPTUAL PLANT LAYOUT 19
FUEL SUPPLY • 3200 MWe • ~4 million tons LNG per year (8.6 million m 3 per year) • Requires a ship every 5 days (135,000 m 3 capacity) • Onshore regasification 20
COOLING WATER SYSTEM • Significant condenser cooling requirements (approx 1 million m3 per 800MW per day) • Cooling Options – Open Cycle (once through cooling) – Closed Cycle (wet cooling towers, dry cooling) • Solution will be influenced by – Marine regulations (sea water intake, sea water temperature rise) – Site conditions (elevation, water availability, water and ambient temperatures) • EIA and detailed study needed to determine optimal cooling solution 21
COMMERCIAL ASPECTS • Conceptual Project’s Commercial Structure Government Government Project Project Land Land Authorities Authorities Project Project Lenders Lenders Owner Owner Sponsors Sponsors (Consortium Agreement) (Consortium Agreement) BOT Law/Concession BOT Law/Concession Agreement/Licences/ Agreement/Licences/ Fuel Supplier/ Fuel Supplier/ Permits/Other Approvals Permits/Other Approvals Land Purchase/ Land Purchase/ Financing/Security Financing/Security Fuel Transporter Fuel Transporter Lease/Land Use Rights Lease/Land Use Rights Documentation/Equity Documentation/Equity Bridge Loan Bridge Loan Equity/Joint Venture Equity/Joint Venture Agreement Agreement Project Project Company Company Fuel Supply/Transportation Agreements Fuel Supply/Transportation Agreements Note: There will also be direct Note: There will also be direct agreements between the Project agreements between the Project Water Supplier Water Supplier Lenders and various project parties. Lenders and various project parties. EPC Contract(s) EPC Contract(s) O&M Agreement O&M Agreement Power Purchase Power Purchase Bank Bank Agreement ( “ PPA ” ) Agreement ( “ PPA ” ) Bank Bank EPC EPC Performance Performance O&M O&M Performance Performance Contractors Contractors Bond (EPC) Bond (EPC) Contractor Contractor Bond (O+M) Bond (O+M) Offtaker Offtaker Sub Contractor Sub Contractor Sub Contractor Sub Contractor
COMMERCIAL ASPECTS (2) • Development Phase – CDC is looking for a potential IPP’s from an early stage – CDC will continue to act as a facilitator until PPA signed • Construction Phase & Operational Phase – CDC may look at different forms of compensation in terms of its landlord and facilitation role – Capital structure is still to be determined – Government through its entities may consider participating in the shareholding of the company – Further details will be highlighted in the RFP and finalised during the negotiations
OTHER CONSIDERATIONS
OTHER CONSIDERATIONS • Regulatory environment – Recent Government Announcement confirm proposed changes in Institutional Arrangements and the Role of Eskom – Detail to be clarified in 2010 – Imminent establishment of Independent Systems Operator – Buying of Power – Environmental licensing requirements – Other licensing requirements • The role of the CDC in the project – To continue with the EIA – To apply for licences – To facilitate the PPA – May facilitate for gas sourcing (if necessary)
STAKEHOLDERS ROLES • Stakeholders and their roles – Various entities that are stakeholders – Assist with the Regulatory environment – Ensure that the necessary support is received – To continue with the relevant work to bring the project to fruition
CDC PROCUREMENT POLICY
BACKGROUND • COEGA is implementing BB-BEE as per DTI requirements (RFP Stage) • Multinational and national Contractors, Service Providers and Consultants – compliant with BB-BEE (RFP Stage) • Encourage participation of SMME and Local (EC) companies • COEGA Procurement Policy and Procedures (website)
THE GENERIC SCORECARD Element Weighting Primary Codes Reference Ownership 20 Points Code 100 Management Control 10 Points Code 200 Employment Equity 15 Points Code 300 Skills Development 15 Points Code 400 Preferential Procurement 20 Points Code 500 Enterprise Development 15 Points Code 600 Corporate Social Investment 5 Points Code 700
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