A Presentation to the: Portfolio Committee on Minerals and Energy (30 August 2001) Given by: Barry Bredenkamp Bonesa Electricity (Pty) Ltd Efficient Lighting Initiative (South Africa)

PRESENTATION OUTLINE Bonesa – the company; Background information; ELI goals; Benefits; Practical example; The way forward; Conclusions.

BONESA – THE COMPANY Bonesa is the local implementing agency established to implement the SA-component of an ELI-programme in 7 developing countries, worldwide. It is funded by Eskom (R48.8 million) and GEF through the IFC (US$2.5 million) and is made up of three local partners, (TSI (EE), Umongi-Karebo and Africon Engineering).

Background Global Environment Facility (GEF) granted US$ to Eskom to conduct a feasibility study on the ELI; Eskom matched the funding; The ELI recommendations were based primarily on the Eskom ISEP: –peak demand reduction targets –‘window of opportunity’ ito emerging market - build in efficiency;

Background (cont’d) Eskom support based on ISEP objectives - peak demand reduction (820MW by 2019), & associated environmental benefits; Estimated net present value saving in avoided utility costs of approximately R990 million over 20 years; Medium term - funding for similar projects a strong possibility - allow for flexibility and permanence in expanding the role of the implementation structure (LIA).

Feasibility Study Completed Draft ELI Business Plan completed; Identified barriers to market entry; Examined consumer behaviour; Determined strategies for programme implementation: –Organisational: structures required for implementation; –Financial: finance needed to implement; –Economic: viability of the programme.

Agreements Reached GEF committed grant funding of US$2.5 million to the LIA (Bonesa) to implement the ELI; Eskom Management Board approved three-year funding for ELI,to meet ISEP targets; Eskom Enterprises (Pty) Ltd agreed to the establishment of the LIA; Implementation of programme through a BEE JVC - Bonesa.

ELI Goals  Increased penetration of energy efficient lighting technologies to meet ISEP target of peak demand reduction;  Improve customer service through reduced electricity bills;  Capacity building and skills transfer;  Conserve the environment through reduced greenhouse gas emissions and reduced consumption of water at power stations;  Support the African Renaissance, through job creation and poverty alleviation.

Benefits of ELI: Benefits to Eskom - Major Meet the ISEP target of 820 MW peak demand reduction by 2019; Net benefits through avoided capital and operating supply costs (G, T & D); Affordable electricity for all sectors of society; Education and capacity building; Positive contribution to socio-economic factors affecting the country; Increased access to energy.

Benefits of ELI: 820 MW

Benefits of ELI: Benefits to Eskom - Secondary Medium term opportunities - aggregate solutions and replicate elsewhere; Expected reduction in non - payment; “Take - back” effect; Lower risk of under-utilised assets; Improved customer focus.

Benefits of ELI: Benefits to Customer Affordable and increased access to energy; Contribution to poverty alleviation.

Benefits of ELI: Benefits to Environment These benefits are vitally important, in terms of South Africa hosting the World Earth Summit in 2002.

Benefits of ELI: Benefits to Munics & Developers Benefits to Municipalities: Avoided network capital, operating and maintenance savings; Avoided bulk purchase cost. Benefits to Developers: Avoided infrastructure costs.

Benefits of ELI: Benefits to South Africa  South African society to benefit from the sum of the above benefits;  Less capital will be used in building additional networks as CFLs will penetrate the market;  Black economic empowerment and SMME-opportunities will increase;  Socio-economic benefits relating to poverty alleviation, and access to affordable energy.

All Africa Games Village – A Practical Example

Targets – The Way Forward Target for 2001: additional CFLs in SA market, ( sold ‘Y-T-D’); Introduction of “Efficient Lighting” into curricula of Schools and Tertiary Institutions; Contribute towards EBSST – poverty alleviation; Help identify and retrofit needy institutions, eg. supporting healthcare and the elderly; Assist in establishing new retail outlets – job creation.

Conclusions The energy sector stands to benefit greatly from ELI - from a strategic ISEP as well as from a profitable business perspective; South Africa will benefit in terms of the following criteria: –Innovation; –Effectiveness; –Poverty impact; –Sustainability; –Replicability. Future opportunities could be opened up through this initiative - similar programmes in SA or by replicating the ELI in other developing countries.

Conclusions (cont’d) Positive benefits for ALL! –Win-win situation; –Utility does not loose; –Economy gains; –Innovation encouraged; –Customer benefits.

Thank you Discussions and/or Questions?