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Case Study

Lenders Technical and Environmental Advisory for power plant

Khanyisa_Coal Power

The project is part of the first round of the coal base-load Independent Power Producers Program run by South Africa’s Department of Energy.

The Situation

The 306MW plant is being developed by ACWA Power and will be the first of its kind in South Africa using modern circulating fluidized bed technology. Khanyisa will make use of the discard coal available from the nearby Anglo American mine, thereby significantly reducing the environmental impact of the waste dumps on the surrounding area.

The Project was notified of Preferred Bidder status in October 2016. The next phase entailed completing the requirements for Financial Close and Advisian provided Lenders Technical and Environmental Advisory services to the consortium of lenders. 

Our Approach

Advisian carried out a technical review of the project designs, technical studies, construction arrangements, and EPC contract, fuel, water and limestone supply agreements, O&M contract and contractor. The technical assumptions and sensitivities of the financial model were reviewed and checked against the relevant contracts and project documents. As the project requires the IFC and World Bank guidelines to be followed in environmental requirements, plant design, and project execution for international financing, the permits and approvals have been reviewed for both South African and Equator Principles compliance.

Value Delivered

A list of outstanding issues and a draft report was submitted to Lenders for review. The aim of the report was to identify technical and commercial risks to the Lenders to support project bankability. Following receipt of finalized contracts and lender feedback a final report was submitted to allow for project financing.

Advisian will also act as LTA during the construction, providing an independent monitoring function for the lenders.