1. THE DEVELOPMENT OF THE BRONKHORSTSPRUIT BIOGAS PROJECT
First deal of its kind in South Africa
MARCH 2015
CONTACT:
Sean Thomas, CEO
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2. PROJECT SUMMARY
Bio2Watt, is a Waste to Energy Project Development Company which owns, develops and builds the projects it is involved in.
Bronkhorstspruit Biogas Project (Pty) Ltd (“BBP”) is a Renewable Energy IPP:
4.4MW installed electrical capacity and further 3MW available for greenhouse farming
Electricity will be sold to BMW in Pretoria, roughly 60kms from the site.
Total project costs amount to R150m, broken down as follows: R36m equity, R16m dti (SA govt) grant, R98m loan from the Industrial Development Corporation
The project is structured as a limited recourse finance transaction. Equity investors include Norfund, the EPC contractor, two impact funds and Bio2Watt.
Project will officially start evacuating power in April 2015

3. THE BRONKHORSTSPRUIT BIOGAS PROJECT
BENEFITS
AVOID WATER POLLUTION
BYPASS LANDFILLS
AVOID GHG EMMISSIONS
OFF-TAKER
POWER PURCHASING AGREEMENT
3MW
WASTE
FLARE
BIOGAS
GAS ENGINES
FERTILISER
MIXER
DIGESTOR
FOOD PRODUCERS
ORGANIC WASTE
WASTE REDUCTION
JOB CREATION
MORE RENEWABLE ENERGY
DEVELOPING LOCAL EXPERTISE

4. Anaerobic Digestion
2017/04/16
Confidential

5. SOME INTERESTING FACTOIDS
7 years
From when project was started to Financial Closure March 2014
1,500
Pages of Legal documents – Typically agreements would lapse
The Project Financial Model went through 56 iterations before being finalized:
Frequently changing parameters & assumptions
Cost increases demanding renegotiation of shareholder contributions
Lender’s EPC Wrap and O&M Terms and Conditions were only tabled after quotes were accepted
Many “last minute” changes to accommodate new risks
We have produced over 1200 pages of legal agreements
Total legal fees exceed R5m – some capitalised some not
The project passed its Technical Due Diligence based on the wrong technology and incorrect assumptions.
R8M
… spent in legal fees

6. BBP – PROJECT TIMELINE Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011
Aug 2012
Mar 2013
Feb 2014
Apr 2015
Pre-feasibility study
Environmental Impact Assessment
Supply Agreements
PPA negotiations
Connection and Wheeling Agreements
Licenses & Permits
Debt/Loan Agreement - IDC
EPC Agreement
O&M Agreement
Equity Investors
Construction

7. PROJECT TIMELINE Start 6 months 12 months 18 months 24 months
Pre-feasibility study
Environmental Impact Assessment
Supply Agreements
PPA negotiations
Connection and Wheeling Agreements
Licenses & Permits
Debt/Loan Agreement - IDC
EPC Agreement
Equity Investors
Construction
Operations

8. Challenges specific to SA
- Manure has to be at most 4 weeks old
Mechanism to control stones from the manure
Manure alone is not sufficient to make the plant viable
Support from farm is critical e.g. grey water is required ±300m3/day
At this stage Electricity price will be higher than municipality or Eskom
The plant will require an off-taker that operates baseload
Returns are low and drawn out - requires patient investors
A very long list of licenses required
2017/04/16
Confidential

9. Licenses required for biogas project
LICENSES: - EIA
- WULA
- Waste License
- Air Emission License
- SALA
MUNICIPALITIES: - Building Plan approval
- By Laws
- Consent of Use
DOE, NERSA & ESKOM: - Generation License
- Letter from DOE
- Access to grid
2017/04/16
Confidential

10. Opportunities for large SA feedlots
Though the power is not sold to the feedlot owner it will be used in the vicinity of the plant – offering security of supply & possibility to access additional capacity which is valuable in current power constrained context
Availability of a higher grade fertiliser both liquid and solid on site
Access to a source of heat and carbon dioxide which could allow Farm to diversify
Lease of land
Better management of waste supported by Department of Environmental Affairs
2017/04/16
Confidential

11. How was this possible Farm: Buy-in & support from Farm is critical
Extensive amount of input required e.g. banks even request access to books to ensure Farm’s sustainability
Funding
Patient investors
Development Finance Institution providing attractive loan
Off-taker
- Willing to pay a premium for Green Electricity

12. BRONKHORSTSPRUIT BIOGAS PROJECT
2017/04/16
Confidential

13. THANK YOU