IDC – Overview and update on Green Industries Towards a green future

1. IDC – Overview and update on Green Industries Towards a green future Presented by Rentia van Tonder Head: Green Industries SBU IDC 20 July 2011

2. IDC has aligned its sectoral focus areas with government’s priorities R11.2 billion Infrastructure The knowledge economy • Logistics The green economy • Mining related technologies • Industrial infrastructure • Healthcare • Green and energy saving industries • Bio fuels • Biotechnology • ICT R22.4 billion R7.1 billion R5.9 billion Agricultural value chain • Agro-processing Tourism and high-level services • Craft and film • Business process services Manufacturing activities • Tourism • Automotives, components, medium and heavy commercial vehicles • Metals fabrication, capital and transport equipment R8.5 billion The mining value chain • Advanced manufacturing • Plastics and chemicals • Clothing, textiles, footwear, leather • Mining • Downstream mineral beneficiation • Forestry, paper & pulp, furniture • Pharmaceuti-cals • Oil and gas R22.1 billion R22.6 billion

3. IDC focus areas: Green industries Services related to renewable energy & energy efficiency Energy efficiency Renewable Energy: Non-Fuel Power Heat, Electricity & building efficiency Cleaner production / Industrial Efficiency Transport Efficiency Concentrated Solar Power Wind Power Generation Solar Photo Voltaic Power Local manufacturing related to renewable energy & energy efficiency Fuel Based Energy Waste to Energy Co-generation Emission and pollution mitigation Air pollution control Water & treatment Waste Management/ Recycling Clean stoves Bio Fuels Bio Ethanol Bio Diesel

4. Non-fuel based green energyRenewable Energy • Exciting time for Renewable Energy development in SA and throughout Africa • Energy Crisis in South Africa and Region • Opportunities both in South Africa and throughout the Region – significant investor interest • SA need is for 50 000MW new generation capacity by 2030 • 19 000 MW to come from renewable technologies • Launch of South Africa’s REFIT Programme awaited • IDC targets a R14bn investment over 5 years

5. IDC Funding possibilities for RE projects • Participation and cost sharing of bankable feasibility studies • Equity participation • Minimum: Meaningful 10% with minority protection • Maximum: Not majority, 30% • BEE and BBBEE funding • Lending to Community Trust or BEE shareholder to invest in project • Repayment with dividends • Will allow 20-25% cash (trickle dividend) for community trust / BEE shareholders • Favourscommunity trust concept • Debt participation • Senior debt with tenure of 15 years post commercial operation date (COD) • Interest capitalisation during construction • Construction loan Target investment of R14bn over 5 years. Projects under consideration: CSP - 5; Wind - 15; PV - 18 ; Hydro - 2

6. Energy EfficiencyKfW facility Opportunity: Facilitate the growth in EE • Energy Efficiency scheme: • R 500 million • Interest Rate at prime -3% • Targeting SME‘s with a 20% energy saving. • Support to IDC through implementing agents: • 2 years of Technical Assistance • Resident Team Leader • Pool of 15 international experts and local experts to provide Technical Assitance to IDC (through KfW grant) • GFA, DNA Economics, Agama • - Energy Audits • - Business Plans • - Marketing Materials • - ESCO business know-how

7. Emission and Pollution focus areas • Approach and progress • Developing strategy to develop cleans stoves industry focussing on rural development and job creation; • Identified projects to be developed in the waste management sector Air Pollution Water and Soil Management Waste Management Industrial: APC Regulations Vehicles: Electric Vehicles Domestic: Clean Stoves Manual Recycling Facilities (MRFs) Acid Mine Drainage Separation at Source Projects Effluent/Sewage Water Treatment Waste Collection and Disposal Natural Resource Management

8. Fuel Based Green Energy (including hydro) To achieve TARGET ZONE: 1. FEEDSTOCK (FUEL) SECURITY! • No Feedstock security, no start! • Feedstock security means quantity, quality, price, period! • PROCESS/INVESTMENT options • largely driven by FEEDSTOCK QUALITIES, QUANTITIES, TERM and OFFTAKE OPTIONS • Typical R 15-35 mil per MW • High load factors eg 90 % (base load), or peaking for gas, hydro • High RATIO of OFFTAKE:FEEDSTOCK prices Project - Low O&M, so capital can be repaid if Scale sufficient & Offtake/Feedstock price ratio strong

9. Fuel type Feedstock and Processes

10. IDC’s funding products • What funding products does IDC have available? • Funding can be structured utilising a wide array of instruments including: • Debt; • Equity; • Quasi-equity; • Guarantees; • Trade finance; • Bridging finance; • Venture capital. • The funding will be structured in a way that will suit the business’ needs most appropriately. Structuring options include: • Term of the funding: Short, medium and long-term loans are available; • Payment holidays: Repayments can be structured to allow for periods upfront where no payments need to be made on either capital or interest; • IDC’s business support programme addresses non-financial support to entrepreneurs.

11. Thank you 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