SOLAR PARK

1. SOLAR PARK TP Nchocho Group Executive: Investment Banking Division 28 October 2010 Development Bank of Southern Africa

2. Table of Contents • DBSA’s MANDATE • PROBLEM STATEMENT • ROLE OF DBSA IN SOLAR PARK • FINANCING FRAMEWORK • COORDINATING ROLE • ENGAGEMENTS WITH FINANCIAL INSTITUTIONS • NEXT STEPS

3. DBSA’s Mandate • DBSA is a regional development finance institution that operates throughout the SADC region. • DBSA’s Mandate: • To promote economic development & growth, human resources development and institutional capacity building in the region. • To support sustainable development projects & programmes in the region. • Focus on economic, social and institutional infrastructure and cooperation with the private sector. • DBSA roles: Financier, Partner, Advisor, Implementer & Integrator.

4. Problem Statement • Solar Park to house large scale solar projects. • Different technologies > at different stages of development. • Aggregate funding requirements not fully quantified yet > FS • However, significant level of debt & equity anticipated: • Park Infrastructure, • Transmission infrastructure, and • Individual solar projects/ IPPs. • Need for a Coordinated Approach. • International players > the Ease to Do Business!

5. The Role of DBSA in the Solar Park • Financing framework ....convening a Working Group. • Facilitating the Coordinated Approach to mobilize the funding required from various sources. • Coordinate project bankability assessments/ due diligences to the extent required, based on financing framework agreed upon. • Assistance to the Northern Cape Provincial government and the Municipality • Institutional ; Technical ; Funding • Assistance to other SOE’s that may have a role to play.

6. Financing Framework • Set up a finance working group made up of local and international DFIs and commercial banks. • Articulation of a coherent Financing Framework for IPP Plants including possible funding models, options, and sources that are available in the RSA market. • Undertake an iterative financial analysis to quantify costs and benefits of various financial instruments. • Development of Project Finance models for each of the solar technologies proposed. • Develop an Info Memorandum (“IM”) for the Solar Park programme. • Determine commitment levels from financial institutions and identify funding gap, if any. • Streamline the financing process and optimize financing terms.

7. Coordinating Role: ALL PARTIES • An Interface Platform between local and international development finance institutions, commercial banks and solar project developers. • Coordinate Due Diligence (DD) activities and project appraisal processes between Commercial Banks and DFI’s to minimize duplication. • Coordinate financial structuring and advise on appropriate capital structures and instruments . • Coordinate the processes to eventually club and optimize commercial banks and DFI funding.

8. Engagements with Financial Institutions • Generally interested in funding the Solar Park. • Indicative funding criteria: • Bankable PPA. • Regulatory certainty. • Confirmation of all required approvals including EIA. • Proven solar technology. • EPC contractor and Technology partner experience. • Full EPC wrap. • Equity availability. • To potentially provide funding at project level or on a consolidated basis. • General willingness to work on a coordinated funding approach.

9. Next Steps • Assist with the bankable feasibility study (“BFS”) process. • Establish a finance working group. • Continue engagements with local and international commercial banks, DFIs, and non-Bank funders. • Engage all relevant parties on the risk allocation framework for the project. • Finalise the financing framework for the project.

10. Thank you very much!