investors road-show july/august 2012 - nampower › public › docs › investor... · •maximum...

CONFIDENTIAL 1

Investors Road-Show

July/August 2012

Contents

• Introduction

• NamPower Overview

• Demand and Supply Situation

• Projects Update

• Financial Overview

• Conclusion

• Appendix: Project Details

2 CONFIDENTIAL July 2012

Introducing Namibia Power Corporation (Proprietary) Limited (“NamPower”) Investors Road Show

NamPower Michael Gotore Chief Officer: Finance, Treasury & Property Management O’Brien Hekandjo Chief Officer: Technical Andre Barlow Head Treasury & Strategic Finance Christo Visser Head Electricity Pricing & Modelling Sara Naanda Senior Manager: Strategic Finance RMB

Selma Kapeng Origination Nana Phiri Distribution Namibia Matthias Langheld RMB Namibia Delia Patterson Distribution South Africa

3 July 2012 CONFIDENTIAL

Contents

• Introduction



• Projects Update


• Conclusion



NamPower Update

• 100% owned by the Government of Namibia

• Reports directly to the Ministry of Mines & Energy through the Board of Directors

• NamPower has subscribed and is committed to the King III Report Audit & Risk Management Committee Remuneration & Nomination Committee Board Tender Committee Investment Committee

Operational since 1972 with experienced management team

All top management positions filled


NamPower Management

CONFIDENTIAL 6

NamPower Update – (Cont…)

CORE BUSINESS

Generation

Energy Trading

Transmission

MAJOR CUSTOMERS

Regional electricity distributors (REDs)

Municipalities / settlements

Mines

Namwater


Contents

• Introduction



• Projects Update


• Conclusion



Supply & Demand Situation

• Installed generation capacity of 498.5MW (67%

Hydro and 33% Thermal)

• Imports up to 80% of demand in some periods

• Maximum Demand of 534MW – 18 June 2012 • Annual growth Fin year 2011

Energy = 3.7% (forecast 2012 : 2.6%) Peak demand = 7.0% (forecast 2012 : 5.8%)

• Transmission Network connected to Botswana & Angola for cross border supplies and interconnected with RSA & Zambia


Energy Supply mix in 2011

10

46%

10%

23%

21%

0%

NamPower

ZESCO

Eskom

ZESA

EDM

July 2012 CONFIDENTIAL

11

Power Stations in Namibia

Ruacana

Hydro

Run-of-the-river

Van Eck

Coal fired

Emergency and Standby

Paratus and Anixas

Diesel & HFO

Emergency and Standby

ANGOLA

ZAMBIA

BOTSWANA

REPUBLIC OF

SOUTH AFRICA

Walvis Bay

Ruacana 341MW

Van Eck 128 MW

Rundu

Windhoek

Lüderitz

Paratus 24MW

Oranjemund

Kudu Gas 800MW

Anixas22.5MW

Baynes 600MW

Erongo Coal 300MW

Wind 44MW

Solar PV 10MW

Wind 60MW

Planned Power Stations

Existing Power Stations

Solar PV 10MW

Solar PV 10MW

CONFIDENTIAL July 2012

12

Namibian Transmission

Back bone

Otjikoto

Omburu

Kokerboom

2

2

2

2

Ruacana

Aries

Otjikoto

Gerus

Rössing

Walmund

Hardap

van Eck

ANGOLA ZAMBIA

BOTSWANA

REPUBLIC OF SOUTH AFRICA

Aggeneis To Hydra

To Koeberg

Otjikoto

Kokerboom

Auas

Red – 400kV

Blue – 330 kV

Yellow - 220 kV

Brown – 350kV

HVDC

Zambezi

2 Khan

Kuiseb

July 2012 CONFIDENTIAL

CONFIDENTIAL 13 July 2012

14

Power Purchase Agreements (PPA’s) Utility Agreements Duration Capacity

ESKOM Supplementary Power Supply Agreement

Year on year (2016) Varies according to requirements

ESKOM Bilateral PS Agreement 15 yrs (signed 01 June 2006) (2016)

Varies according to availability

ZESA (Zimbabwe)

Power Supply Agreement 5 years + 1 year 150 MW

ZESCO (Zambia) Power Purchase Agreement 100 MW (50 MW firm), 10 years

100 MW

SNEL (DRC) Power Purchase Agreement HoT signed, 5 years with the option to renew. Available from 1 April 2009.

(not a firm contract due to Tx constraints, to be re-considered after Kafue and Livingstone upgrade and ZIZABONA project implementation)

50 MW (option of additional 50 MW)

CONFIDENTIAL July 2012

Meaningful Correlation Between GDP Growth and Electricity Demand

90.0

105.0

120.0

135.0

150.0

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Correlation between GDP and Electricity Consumed 1993-2003 (1993=100)

Electricity

GDP

90.0

105.0

120.0

135.0

2004 2005 2006 2007 2008 2009 2010

Correlation between GDP and Electricity Consumed 2004-2010 (2004=100)

Electricity

GDP


Contents

• Introduction



• Projects Update


• Conclusion



Future Power Supply Scenario

• 2013 – 2016 period

– Power supply deficit and power supply management challenges

– Namibia largely dependant on energy imports (regional PPA’s)

– Energy and capacity deficiencies in neighbouring countries will have a marketed effect

– Initiated short-term critical supply (STCS) project

• Period beyond 2016/7

– New base load power plant in operation

– Limited opportunities: Gas or Coal

– Small and medium sized projects (HFO, Renewable energies) supplementary

– Much less dependant on imports, more an economic trading decision

17 July 2012 CONFIDENTIAL

Generation & Transmission Projects

o Hwange Rehabilitation: 150 MW PPA 2009 (completed) o Caprivi Link: 300MW Tx Capacity 2010 (completed)

o Anixas: 22.5 MW 2011 (completed)

o Ruacana 4th Unit: 92 MW 2012 (completed)

o IPP (Wind/ slop/solar) : 40 - 110 MW 2013/4

o Kudu or 800 MW (400 for Export) 2017-18

o Coal 150-300 MW 2016

o Baynes: 300-600 MW 2018/9(Namibia/Angola)

o Transmission Projects Upgrade & Expansion 2013 -2015

o ZIZABONA Interconnector 2016/7

18 CONFIDENTIAL March 2012

IMPACT OF NEW PROJECTS ON TARIFFS


73

Impact of New Projects on Tariffs

Electricity cost is forecasted to increase steeply during the 2014 – 2016 mainly as a result of the regional power supply deficit situation

New generation in the region currently is in the range of US$ 10 – 12c/kWh (in 2012 terms)

Estimated average energy cost in Namibia is expected to increase to over N$110c/kWh (US$13.75c/kWh) by 2016

CONFIDENTIAL

March 2012

21

5 Year Forecasted Pricing Path

Estimated pricing path of average electricity price (energy & capacity)

TARIFF DEVELOPMENT

Clear indication of pricing cost drivers. Energy charges increase significantly as supply options becomes scares.

As the NamPower Transmission network expand over the next five years ,

capacity charges will increase and future tariff composition will be 70% : 30% Energy : Capacity

FUNDING PLAN


82

Projected Funding Requirements (2013-2018) NamPower needs to raise up to NAD 5b over 5 years (2011: NAD 1.3b) debt on its

balance sheet

This will fund the remaining amounts required under the NAD 12.5b (2011: NAD 12b) Capex programme from now until 2018

Programme to be funded through:

DFIs

Bonds

Commercial Debt

CONFIDENTIAL March 2012

Uses of Funds NAD'000

Generation 6 700 000

Transmission 4 300 000

Others 1 500 000

Total 12 500 000

Sources of Funds NAD'000

Cash Reserves 7 500 000

Debt 5 000 000

Total 12 500 000

Contents

• Introduction



• Projects Update


• Conclusion



CONFIDENTIAL 26

Financial Performance 31-May-12 31-May-11 Var

N$'000 N$'000 %

Total Income 2 317 865 2 098 658 10%

Electricity Sales 2 232 932 1 977 196 13%

Investment Income 282 363 241 537 17%

Finance Cost (227 414) (216 311) 5%

PBT (excl. embedded derivatives & firm

commitments 189 426 404 647 -53%

Financial Position 31-May-12 31-May-11 Var

N$'000 N$'000 %

Total Assets 20 946 627 14 808 749 41%

Property, Plant Equipment 15 002 356 9 769 011 54%

Investment & Cash 4 878 971 3 739 765 30%

Interets bearing debt 3 081 268 2 754 657 12%

Financial Overview – Management Accounts

Financial Ratios


Ratios 31-May-12 31-May-11 Var

%

Gross Profit 57% 54% 6%

Net Debt : EBITDA (Covenant < 4 ) -2.36 -1.38

Debtors Collection Period 43 days 44 days

Current Ratio 3.85 4.05

DSCR (Covenant > 1.4) 4.20 3.83

Debt:Equity (Covenant 65:35) 21/79 18/82

Cash Generated from Operations (N$) 959 965 749 210 28%

Net Cash from Operations (N$) 1 014 914 874 564 16%

2012 FY Highlights

• Income

– Increase in Electricity Sales driven by unit sold and tariff increase (13.9%)

– Increase in Other Income due to increase in sales in STEM

– Comparative increase in investment income

Expenses

– Decrease as a result of more units produced at Ruacana P/S

– Decrease in Eskom purchases due to wheeling constraints and more units generated internally and sourced from SAPP

– Decrease in Coal purchases due to low utilization of Van Eck P/S


NamPower Proposed Bond Issue • No new issues since Nov 2009

• Bond issuance driven by NamPower Capex programme

• Commissioning of a base load power station planned for 2015/16

• Investment decision on a base load power plant (gas/ coal) expected

by end 2012

• Upgrading and strengthening of transmission network

• More frequent issues expected for next 3 years

• Maintain on-going dialogue with investors

• Expected timelines to market end Q4 2012 – Q1 2013


Contacts Name Email Address Tel Number

Andrè Barlow [email protected] +264 61 205 2314

Sara Naanda [email protected] +264 61 205 2752

Matthias Langheld [email protected] +264 61 416 154

Delia Patterson [email protected] +27 11 ……..

Selma Kapeng [email protected] +

Nana Phiri [email protected] +

CONFIDENTIAL 30

mailto:[email protected]







Thank you

31

investors road-show july/august 2012 - nampower › public › docs › investor... · •maximum...

Documents