Bethlehem hydro power project

Bethlehem Hydro (Pty) Ltd, a special purpose company registered in South Africa, will undertake the development, ownership and operation of a 3,9 MW hydro powered independent power plant (IPP) in South Africa.

The company will generate income by selling electrical power and capacity under a long term power purchase agreement (PPA), and by selling its reduction in greenhouse gas emissions as Certified Emission Reductions (CERs). The lifespan of the business is in excess of 20 years.

The project

The plant comprises two separate generation sites:

• 2,2 MW - run of river site located on the As River
• 1,7 MW - located at the wall of the Saulpoort Dam

Annual power production is 28,6 GWh. Being a renewable energy electricity generator, the company will reduce emission of some 25 000 tons of CO₂/annum.

Bethlehem Hydro has secured exclusive long term rights to the land on which the project will be located, as well as an exclusive water use permit.

Sponsor

Bethlehem Hydro has contracted NuPlanet BV (Netherlands) to manage the Development and implementation of the project on its behalf. NuPlanet through its principals has more than 20 years experience in the development and implementation of clean energy projects across the globe. NuPlanet is contributing R4-million to the feasibility study and development of the project, and will therefore take a significant equity stake in the final project. NuPlanet will also act as business manager for Bethlehem Hydro with technical operations contracted to a local firm.

Status

• Technical, environmental and legal feasibility assessments have been completed.
• Final or conditional approval has been obtained on all licences, permits and agreements required including the Power Purchase Agreement, Generation Licence, Land Lease Agreements.
• Water Use Licence granted.
• Environmental Impact Assessment (EIA) approval received.
• Letter of Intent signed with World Bank for the sale of the carbon emission reductions.
• Financial due diligence completed.
• Financial closure is targeted for mid 2005.
• Detailed design to be completed by late 2005.
• EPC Contracting is scheduled for mid 2005.
• Construction is scheduled to start 3rd quarter 2005.
• Commissioning is scheduled for mid 2007.

Financial

• Capital Cost: R42-million (€5,25-million)
• Debt Equity: 70/30
• Return on Equity: 12 - 16%
• Sponsors Own Contribution: R4,8 million (€600 000)
• Annual Power sales R4,6-million (€0,58-million)
• Income from CO₂ emission reductions: R19-million (€2,4-million)
• Power Purchase Tariff (average) R 0,16/kWh (€0,02)

Investment

Bethlehem Hydro has secured, pending the completion of due diligence, the financing required for its development and construction. Commitments for debt provision have been secured from the Development Bank of Southern Africa (DBSA). The equity investors include the NuPlanet, the Energy Development Corporation (formerly CEF) and Hydrowsa a broad based Black Economic Empowerment (BEE) consortium representing women in the energy sector.

Operations

The operations and maintenance of the plant will require a skilled professional engineer and two full-time semi-skilled labourers. Bethlehem Hydro will also contract a suitably qualified individual based in Bethlehem for technical management and will employ a general manager to manage the company’s billing, business administration and accounting.

Contact Anton-Louis Olivier, NuPlanet, Tel (011)12 349 1901, al@nuplanet.nl, www.nuplanet.nl