Previous Projects andProgrammes the IDC
Financed
Ms Nontokozo Hadebe
Head: Corporate Strategy and Innovation

3 Large Scale Projects/Programmes

1. REIPPPP•

The draft Integrated Resource Plan 2010 (IRP 2010) informed the Renewable
Energy Independent Power Producer Procurement Programme (REIPPPP)•IDC participated in:- Wind Energy Generation- Solar PV Energy Generation- Concentrated Solar (CS) Energy Generation- Gas supply for electricity Generation- Biomass

2. Mozal
3. Automotive Manufacturing and Assembly Project2

REIPPPP - Wind Energy Generation: IDC
Participation and Exposure•

IDC exposure to wind energy projects completed amounted to R3.2 bn at the end of October 2019, with a total installedcapacity of 345MW.

•Dividends received by the IDC from the various wind generation projects amounted to R452 million, representing 14% of
the total exposure to the projects.

•Companies funded by the IDC include a manufacturer of wind turbine towers, a turbine blades manufacturer and a wind
tower internals or components maker.

•A sample of three IDC investments in the Northern Cape is shown in the table. The projects have been connected to thehydra transmission substation. A combined 150km of internal access roads were built, while 170km of internal 33kV
overhead electrical reticulation lines were installed and 45km of 132 kV transmission line.

Project X

Project Y

Project Z

Financing AmountR1.1bn

R785m

R163m

Total Investment Facilitated

R2.6bn

R1.9m

R163m

Jobs Created/Saved

184

149

149

BEE Shareholding

20%20%0%

Total Assets

R2.5bnR1.8bnR1.1bnTurnover

R350m

R265m

R204m

3REIPPPP - Solar PV Energy Generation:
IDC Participation and Exposure• Since the launch of the IRP 2010, solar PV capacity has increased to a total of 1 474MW installed by2018.
• IDC-funded projects account for 14.4% of the total solar PV capacity constructed.
• The 8 solar PV projects funded by the IDC have a combined capacity of 213MW, with the total exposureamounting to R1.3 billion.
• Dividends received amounted to R291 million at the end of January 2020, highlighting the income
generation capabilities of these projects.
Solar PV Project inNorthern Cape
Financing Amount

R675m

Total Investment Facilitated

R686m

Jobs Created/Saved237

BEE Shareholding30%Total Assets

R2bnTurnover

R312m4REIPPPP - Concentrated Solar Energy
Generation: IDC Participation and Exposure• IDC has funded almost all CS power projects completed in SA, 350MW out of the total of 500MW.
• 5 CS projects funded - total exposure: R6.8 billion and total overall approvals: R8.4 billion.
• In 2018, IDC approved funding for a 100MW power project in the Northern Cape (Project A). Additional
funding was approved in 2019 for inclusion of community participation and project construction. The siteis spread over 850 000m2, making the plant the biggest solar complex in Africa when combined with theadjacent solar power plant. The solar plant will be capable of meeting the electricity needs of more than
95 000 households and prevent 348 000t of carbon emissions a year.
• Project B was funded to deliver 100MW CS with storage
Project A

Project B

Financing Amount

R2bn

R2.6bnTotal Investment Facilitated

R9.8bnR2.7bnJobs Created/Saved

668

913

BEE Shareholding

20%

30%

Total Assets

R8.4bnR8.2bnTurnoverR1.7bnR1.3bn5

REIPPPP - Gas Supply for Electricity Generation:
IDC Participation and Exposure• SA’s only developed gas resource is set for closure in 2020, making the country reliant on imported gas,
especially from Mozambique. SA is developing liquified natural gas (LNG) terminals to diversify its
imports sources, for gas shortages are envisaged as supply from Sasol diminishes from 2025 onwards.
• IDC is participating in the 450MW combined-cycle gas turbine power plant in Mozambique. The plant
will contribute to the Southern African power pool and improve grid stability for the whole region.
The project also includes the construction of a new 100kV transmission line, as well as theinfrastructure and equipment required to connect the facility to the grid of Electricidade de Mozambique.
Gas Turbine Power Plant
Financing Amount

R394m

Total Investment Facilitated

R1.2bnJobs Created/Saved

93

BEE Shareholding

15.9%

Total Assets

R903m

Turnover

R180m
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REIPPPP - Biomass: IDC Participation andExposure• The first biomass energy (power) project under the DoE’s REIPPPP, the first to have Employee andCommunity Trust ownership, both IDC funded; and is the first REIPPP in Mpumalanga.
• Employs more people per MW than any other technology, even coal power stations, whilst being Green.
• Ownership and Management will be minimum 51% black-owned and management 66% black people.
• It will burn forestry residues not suited for timber or pulp to produce steam and then power. During
operations 91% of spend is empowered spend, with R400m on SMMEs, R200m on women owned
suppliers, CSI spend is R230m, ED spend is R90m.
Biomass Energy Project in Mpumalanga
Financing Amount

R63m

Total Investment Facilitated

R382m

Jobs Created/Saved620

BEE Shareholding

17.5%Total Assets

R1.6bnTurnover

R447m
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MOZAL – Background and Project Overview• The Mozal aluminium smelter started operations as a producer of aluminium exclusively for export.
• Owned by an international consortium, with IDC holding 24%, backed by a US$2bn investment• The project is situated 20km west of Maputo in Mozambique, and is built on 1.3 million m2 site.
• Commenced in 1993 as part of the Mozambique government’s recovery programme to rebuild thecountry after a prolonged civil war.
• The project was completed ahead of schedule, under budget and with a smooth start-up.
• The operation, the first major foreign investment in the country, was officially opened in September 2000
and was the biggest private sector project in Mozambique.
• Originally commissioned as a 250 000 ton per annum smelter.
• Mozal II (2003) extended capacity and it now the largest aluminium producer in Mozambique and 2ndlargest in Africa, with a total annual production of 580 000 tons.
• Responsible for 30% of the country’s official exports and uses 45% of the electricity produced inMozambique.
• In February 2013 an agreement was signed under which it will supply 50 000 tonnes of aluminium to a
producer of aluminium cables in Mozambique.

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MOZAL – Macro-Economic Impact• Project peak funding = 20% of GDP• Export Earnings = US$430 p.a. (170% of merchandise exports for 1998) or US$9 bn over the lifetime ofthe project• Job creation:
Construction phase – up to 5 000 and 50% of these are Mozambican
Operational phase – 900 direct jobs (800 Mozambicans) and 2 600 indirect jobs
•Potential future downstream aluminium development projects•Infrastructure developments to include two power transmission lines of US$ 100m•

Increased traffic through the under-utilized ports at Maputo and Beira•

Belulane Industrial Park estimated to create 20 000 additional jobs when fully operational•

Promotion of regional trade integration, enhancement of the viability of the Maputo Corridor•

Increased foreign investor confidence•

Technology transfers•

Skills development and transfers (more than 5 000 were trained by Mozal)

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MOZAL – Impact on the Mozambican Economy
Mozal I

Mozal II

Value added

US$ 160m p.a. (4.5% of 1998 total GDP)

US$ 170m p.a. (4.6% of 1998 total GDP)

Project PeakFunding

35% of GDP

ExportEarnings

US$ 430m p.a. (170% of merchandise
exports for 1998) or US$ 9bn over theproject’s life time

US$ 410m p.a. (165% of merchandise
exports in 1998)

RevenueTax Revenue:
US$ 4.1m p.a. due to a 1% levy on turnover
Dividend Income:US$ 5m p.a. due to a 4% stake in the project

Tax Revenue:
US$ 4.1m p.a. due to a 1% levy on turnover

Jobs
Created/
Saved

Construction phase:
9 000 employees –65% Mozambicans
Operational phase:
direct: 600 - 550 Mozambicans
Indirect: 2500 due to linkages with the rest of
the economy

Construction phase:
6 000 jobs at the peak –4 500 Mozambicans
Operational phase:
direct: 260
Indirect: 1500

OtherRoads networks and bridges, telecommunication systems, water supply/pipelines, sewerageand drainage systems, new harbor facilities
10Automotive Project – Coega IDZ in
Eastern Cape, Nelson Bay Metro•

South Africa’s automotive industry’s biggest greenfield investment in 40 years•

Multi-billion rand joint venture with a Chinese car manufacturer - estimated to make a
substantial contribution to the SA economy through its purchases of local goods andservices in the amount of R6 082m annually•

The Chinese car manufacturer is the majority shareholder with 85% equity•At full capacity the plant is expected to produce up to 100 000 units a year, consisting ofcars, SUV’s and pickups.

•± R7 209m of value add (GDP) will be generated in the domestic economy in a number ofsectors whose production activities can be associated with the project11

Automotive Project - Continue
Investment in Automotive Manufacturer – EC
Financing AmountR1.5 bn

Total Investment Facilitated

R4.4 bn

Jobs Created

1 722

BEE Shareholding

0%

Total Assets

R4.3 bn

TurnoverR5.2 bn•

Total sales (turnover) is estimated at R10 427m p.a. during the operational phase•

Once fully operational, the project is expected to employ 784 directly at the assemblyplant•

The economy-wide impact (multiplier effects) will be substantial, e.g. around 18 132
jobs (directly and indirectly) across a number of sectors in the SA economy may beassociated with the production activities of the project

12Automotive Project - Continue

Every OEM added to the SA Auto industry will significantly increase the total volume ofvehicles produced locally resulting in:- Positive contribution to the country’s GDP.

- Improved economies of scale to justify increased localisation and local content.
- Creating and sustaining employment throughout the value chain.
- Direct and indirect Job creation by the OEM and supply chain.
- Technology and Skills transfer- Increased Export Sales and positive contribution to the country’s Balance of Payment.
- Increased Foreign Direct Investment.
- Positive contribution to the Fiscus (direct and indirect taxes).

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