The Green Energy Efficiency Fund

1. The Green Energy Efficiency Fund Competitiveness through energy savings

2. Green Energy Efficiency Fund IDC and the German Development Bank (KfW) have partnered to establish a R500 million facility for energy efficiency and self-use renewable energy projects within South Africa. This fund – The Green Energy Efficiency Fund - supports the IDC’s alignment to the Industrial Policy Action Plan (IPAP2) and the New Growth Path with specific focus on growing the Green Economy. Energy Efficiency and Renewable Energy initiatives are a strategic priority for South African companies, given the recently gazetted white paper on national climate change response. The Green Energy Efficiency Fund will drive the awareness of the need for energy efficiency among South African enterprises.

3. Partners: Green Industries Strategic Business Unit Energy efficiency Services related to RE &EE Renewable Energy: Non-Fuel Power Heat, Electricity & building efficiency Cleaner production / Industrial Efficiency Transport Efficiency Concentrated Solar Power Wind Power Generation Energy Audits Energy Servicing Companies (ESCOs) Solar Photo Voltaic Power Hydroelectric & Oceanic Power Examples of EE interventions Industries related to Renewable Energy Research & associations Industrial processes & efficiency Retrofitting of buildings High efficiency engines Efficient lighting SWH & Heat pumps Energy monitoring Metering PV cell and Panel Manufacturing Industry Associations Carbon Markets O & M Services Turbine & Tower Manufacturing Certification & verification R&D for localisation Emission and pollution mitigation Fuel Based Power Bio Fuels Air pollution control Water & soil Treatment Waste Management/Recycling Bio Ethanol Bio Diesel Waste to Energy Co-generation Nuclear Waste to Energy types: Landfills Biomass combustion Anaerobic digestion Pyrolysis/Gasification Clean stoves

4. Partners: KfW Bankengruppe Promotion of developing and transition countries International Project and Export Finance Mittelstandsbank Promotion SMEs,business start-ups,environmental andclimate protection Privatkundenbank Promotion Housing, education,infrastructure andsocial development Kommunalbank Municipal infrastructure projects and promotion in Europe Promotion of the German economy International financings

5. Purpose & objective The Green Energy Efficiency Fund • Competitiveness through energy savings

6. Characteristics • Facility size: R500 million • Loan size: R1 – 50 million • Interest rate: Prime less 2% • Term: Up to 15 years, based on payback period of the investment • Standard fees will apply

7. Eligibility Criteria

8. Eligible Projects: examples The funding can be used for equipment and technologies that provide energy savings which may be measured in terms of: • Operational efficiencies • Production efficiencies • Absolute savings • Substitution with Renewable Energy • A combination of all these. Green Energy Efficiency Fund is an option to bridge the gap between the actual investment and the process required to obtain Eskom incentives/rebates.

9. Technical Support Provided by a team of international and local technical experts on a case by case basis who will: • Review and perform if required by IDC, energy assessments and audits to propose sustainable energy solutions and support the preparation of investment project proposals. • Calculate the economic and financial benefits of the proposed investment. • Support the selection of eligible equipment and enhanced performance technologies. • Resulting in reduced investment risk through energy efficiency validation checks.

10. Client Benefits • Modernization of equipment. • Improved product quality and production capacity. • Reduced energy and other costs. • Increased company profitability. • Lower vulnerability to increasing energy prices. • Improved company image through contribution to carbon footprint reduction.

11. How to Apply • Submit the Green Energy Efficiency Fund application form through our website and IDC regional offices. • It must be accompanied by an executive summary providing project background information and reason for funding. • A basic assessment will be done to determine eligibility. • Eligible applicants will be requested to submit a detailed business plan accompanied by a financial model. • Due diligence and credit approval processes will then follow.

12. Conclusion • Energy efficiency is key to South Africa’s energy security, amidst rising energy costs and constrained generation capacity • The Green Energy Efficiency Fund presents opportunities to industries to lower energy costs, improve profitability and invest in new technologies that facilitate South Africa’s transition towards a low carbon economy. • This in turn contributes to global climate protection, while supporting South Africa’s economic development and growth. Ultimately, greening South Africa’s industrial base will lead to long-term industrial competitiveness and job creation

13. Thank you www. idc.co.za The Industrial Development Corporation 19 Fredman Drive, Sandown PO Box 784055, Sandton, 2146 South Africa Telephone (011) 269 3000 Facsimile (011) 269 2116 E-mail callcentre@idc.co.za

14. Funded Cases

15. Case Study 1: 18% Energy Savings from Utilisation of Waste Gas to feed a Combined Heat and Power (CHP) Plant • The chemical production company wants to use the waste gas as fuel for a 7.8 MW CHP plant to replace part of the power supply from the grid. • This results in 18% savings from using the waste gas to feed the CHP plant. “The company spends close to R7-million on electricity a month, and this new co-generation plant will cut this bill by about 20%. The additional 8 MW capacity will enable the company to operate at full production compared with the 70% capacity because of electricity constraints. „ Claudio Siracusano, GM, SACC

16. Case Study 2: More than 40% Savings in Energy Consumption with Solar Water Heaters • A financial intermediary that provides Solar Water Heaters (SWH) on a lease-to-own agreement to private households and commercial buildings. • Solar water heating systems are one of the most cost-effective uses of solar energy in South Africa as they replace more than 40% of electric heated water. “The Green Energy Efficiency Fund will enable us to roll-out Solar Water Heaters to at least 400 households, by removing the challenge faced by many clients in financing the high upfront costs of SWH.” Quinton Zunga, CEO, Solar Network

17. Case Study 3: 25% Reduction in Grid Electricity Consumption by Installing a Solar Photovoltaic (PV) System • A Cape Town-based company that produces sport wear and leisurewear under license to an international brand. • The company has embarked on a project to install a grid connected (grid-tied) rooftop PV system to generate 25% of the company’s annual electricity requirement “Electricity accounts for more than 90% of our carbon emissions and is a scarce resource that is vital to the successful operation of our business. We are confident that the solar installation will generate between 30 – 40% of our energy requirement, thereby reducing our carbon footprint, save money and improve our sustainability into the future.” William Hughes, MD, Impahla Clothing