KUDU POWER PROJECT

HIGH-LEVEL PROJECT UPDATE

June 2015

Confidential 1

Illustration of Upstream – Downstream integration

Confidential 2

Illustration of Upstream infrastructure

Confidential 3

Kudu Project History

Confidential 4

4

Upstream-

Downstream

Technical

Integration

Studies

May 11

Gazprom

fails to meet

deadline &

Withdraws

Project

reverts to

800MW

power

project

2010 2011 2012 2013 2014 2015

March 15

GRN Agrees

to Kudu

Support

Package

KuduPower

EPC, O&M,

SEI, MLA

Bidders

Shortlisted

NP & Eskom

conduct joint

Tx studies

Feb 14

KP/CEC Joint

Development

Ag.

signed

Oct 11

Petroleum

Ag.

signed

Oct 14

Tullow

Withdraws

Nov 12

Joint Op.

Ag.

signed

PXA HoT

signed

Mar 13

Project

Development

Ag.

signed

Sep 13

KPS EIA

Revalidated

Sep14

NACC

Approval

Sub-sea, FPS EPC

Shortlisted FEED

Aug 09

CNG

Termsheets

signed

Nov 06

Eskom

withdraws

from PPA

Jul 07

PetroSA

withdraws

Apr 08

Tullow

introduces

CNG

concept

Apr 07

Itochu

20%

farm in

Feb 09

Tullow

proposes

CNG

2007 2008 2009

Aug 09

Production

Licence 002

Nov 07

Eskom

withdraws

from gas

Mar– Jul 07

Export Gas

Pipeline

study

Kudu Options

Study (KPS

size)

Feb 07

Heja Lodge

Mtg

Eskom, Tullow,

Namcor,

PetroSA

2006

Oct 11

Production

Licence 003

Key Facts about the Kudu Power Project

Ownership NamPower, CEC, SEI

Location

Power Station Oranjemund

Gas Field Offshore (170km)

Lead Developer NamPower (51%)

Technology CCGT (F-Class)

Offered Output 2 x 442.5 = 885MW

Preferred EPC & OEM Shanghai Electric & Siemens (LTSA)

Reserve EPC & OEM Posco & Sumitomo, MHPS

MLA Standard Bank

Main Power Off-Taker NamPower

Secondary Off-Takers CEC Plc & Eskom

Generation License application submitted to ECB (approval

by end of May 2015)

GRN Support approved in March 2015

Confidential 5

Power Station Project Cost & Funding

Confidential 6

US$

1200

Mil.

$900m

$300m

$450m

?

$153m

$90m

$57m

75% Debt

25% Equity

50%

Commercial Debt

?

50%

Split

DFIs & ECAs

51% NamPower

30% CEC Africa

19% Strategic

Partner

Standard Bank

(Lead Arranger)

Termsheets with

Hermes (Germany)

Sinosure (China)

Termsheets with

All DFIs

JDA signed

Short-listed

GRN Support

approved

4

Kudu Project Commercial Arrangements

NamPower& other

equity partnersLenders

Share

ho

lde

rs A

gree

me

nt

Finan

cing

Agre

em

en

ts

O&

MA

gree

me

nt

Operations and Maintenance

Company

OEM & EPC Contractor

EPC

& LTSA

Co

ntract

Gas Sales/Supply Agreement

UpstreamParties

KuduPower NamPower

Power PurchaseAgreement

Regional Buyers

Po

we

r Expo

rt A

gree

me

nt

Transmission Agreement(s)

Power to Namibia

1

2 3

4 5

6

7 8

Confiential 7

Kudu Power Station Nam Grid Regional Grid FPS Pipeline

Wet to Spec

Gas Power Spec Gas Power Gas to Power

KuduPower NamPower Eskom

J/v partner

J/v partner

?

KuduPower ? Regional

Sales NamPower

OMCo

NamPower

Tx Eskom

TBD

NamPower CEC

EPC

Contractor OEM

Lenders

J/v partner

Namcor

J/v partner

GRN

Namcor

EPC

Contractor

EPC

Contractor

Energy

Owners

Operators

Constructors

GRN

Infrastructure

Owners

LTSA

Connection.

Loans

EPC

U/S EPC Ag

Tx EPC

I/C

JDA-SHA

PDA

Petr

ole

um

Ag

P

ro

du

cti

on

Lic

en

se

Direct

Implementation

GSA

O&M

Project

Funders Lenders

JOA

Loans

Other

NamPower

SHA

Required Project Relationships & Agreements

Energy

Transmission

Technical

Financial

Recon

Upstream

GRN Off taker

JDA

NamPower

Dx Supply

SEI

SEI

KPS Site

NamDeb

Confidential 8

ECB

Reg

ula

tory I

nte

rfa

ces

9

PXAs GSA PPA

PXA Offtakers Upstream Project Kudu Offshore Gas field

Eskom

CEC

NamPower

51%

NamPower CEC/AFC

Kudu Power

30%

Strategic Partner

19%

Namibia Zambia / South Africa

GRN

100%

300 MW

Domestic: 400-500 MW

100 MW

Downstream Project Kudu Power Station

Construction O&M

Lenders

Debt

NP Equity

Minority Equity

Transmission

Confidential

1. Gas Sales Agreement: A fully termed GSA between

KuduPower and the Upstream Partners has been drafted and

agreed to the fullest extent possible.

2. Power Purchase Agreement: The PPA between NamPower

and KuduPower has been drafted and key terms agreed.

3. The Transmission Connection Agreement (TCA)

between NamPower and KuduPower has been drafted

and key terms agreed.

4. The Transmission Connection Agreement (TCA) with

Eskom has been drafted. Eskom has commenced with the

transmission study for the evacuation of power from Kudu.

Update on Commercial Agreements:

Confiential 10

4. Power Export Agreements (PXA) with CEC:

CEC Plc expressed interest in to off-take about 300MW from the Kudu

Power Station in exchange for 30% equity in the project.

The PXA Termsheet with CEC Plc was signed in February 2014,

Full PXA negotiations have commenced and are expected to be finalized by

July 2015

5. Power Export Agreements with Eskom:

Interest from Eskom is for 100MW mid-merit/peaking (profiled) power,

ZAR-based but with hedging costs incorporated.

A fully drafted PXA was presented to Eskom in 3rd quarter 2014, but

bureaucratic processes are delaying commencement of negotiations.

MME has initiated a process with the DoE to discuss the IGMOU for the

offtake and transmission integration investment in South Africa.

Update on Commercial Agreements:

Confiential 11

Update on Tenders

Mandated Lead Arranger (MLA)

Standard Bank has been appointed as the Mandated Lead Arranger.

EPC

Shanghai Electric Corporation (SEC) in partnership with Siemens AG have been

selected as the preferred EPC contractor and Original Equipment Manufacturer

(OEM) respectively.

Operations & Maintenance Operators (O&M)

Three companies have been shortlisted, and clarifications & negotiations were

finalized on 17 June 2015. Selection of preferred bidder in July 2015.

Strategic Equity Investor

The preferred and reserve Bidders have been selected, and clarifications &

negotiations are underway. This process to be concluded by end July 2015.

Confidential 12

Kudu Off-take Supplied to Namibia

Confidential 13

300MW 24x7 to CEC

550 MW Profiled to NamPower

1. Studies by the Kudu Team & NamPower showed Namibia

could take Kudu output if CEC takes 300MW.

2. In the low off-take scenario (high Ruacana flows, low

demand growth) KPS would be limited to take-or-pay gas

volumes .

Average output doesn’t change over life

Figure 4: Basic Cost Comparison

0

2

4

6

8

10

12

14

16

ITT (120MW) Maamba (300MW) Kafue Lower

(600MW)

Kudu

US

c/k

Wh

Transmission markup

Plant Gate Cost

Regional competitiveness

Source Copperbelt Energy Corporation: 2011

Indicative 2015 Tariffs

Kudu tariff very competitive against any regional project (new build)

SVC

Masivi Shitemo 132kV

2015/2016

West Coast strengthening

2014/2015

Omatando strengthening

Ph 1: 2013/2014

Ph 2: 2016/2017

Auas Gerus 400kV

2017/2018

Gerus Otjikoto 400kV

(Operate at 220kV)

2015/2016

Kudu Transmission

2017/2018

2nd Auas Kokerboom 400kV

2017/2018

Caprivi Link Bipole

Auas Omburu Gerus 400kV

, >2019

Kuiseb Walvis Bay 132kV

2015/2016

Khurub Aussenkehr 132kV

2015/2016

Confiential

Transmission expansion within Namibia (including

connection to Kudu)

Kudu – Eskom Transmission integration

SVC

Kudu P/S

Kokerboom-Auas

Confiential

Kudu – Eskom

Dec

2014

Nov

2014

Kudu Project Update :Timelines - Development Phase

17

Jan

2015

Feb

2015

Mar

2015

Apr

2015

May

2015

Jun

2015

Jul

2015

Aug

2015

Sep

2015

Oct

2015

Nov

2015

Dec

2015

KuduPower EPC/LTSA

Upstream EPC(s)

Finalise GSA/Gas Price

Operator

Finalise O&M

Finalise PPA

Lenders’ Due Diligence

Finalise Financing Agreements

Participation Ag & Financing

IFC Equity Financing

GRN support/Implementation Agreements

Finalise SEI Shareholders’ Ag

Finalise PXAs

Finalise TCA

Eskom Interconnection

Confidential

All technical and commercial contracts are in final stages of

negotiation/drafting.

Time required for Lenders’ due diligence is outside NamPower’s

control, however GRN Support has made the project more

attractive and bankable,

Aggressive timelines have been set for the project, but slippages of

up to 3 months will not threaten project completion.

Confidential 18

Key issues on Project Timelines

INDICATIVE PROJECT TIMELINES

o Conclusion of all agreements 31 July 2015

o Financial Close: December 2015

o Commencement of construction: 1st quarter of 2016

o Construction Period: 33 months from FC

o Commercial Operations Date (COD): 1st quarter 2019

Confiential 19

THANK YOU.

Confidential 20