NewCogen power plant

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In May 2010, NewCogen rental power project reached closure when IPSA Group wholly owned subsidiary NewCogen was allowed by ESKOM to operate under a short term 3-months power purchase agreement for the World Soccer Cup. The sponsor was NewCogen, a wholly-owned subsidiary of british firm IPSA Group. The 15MW plant had been built earlier, but ESKOM had delayed several time the signature of a power purchase agreement. Under the short term agreement, NewCogen was to supply 15MW electricity to ESKOM at a pre-agreed price during the World Soccer Cup. The contract concluded in July 2010 as expected. In August 2010, NewCogen signed a new PPA with Eskmo until March 31, 2015. The estimated investment for the rental power plants was determined by calculating an equivalent annual depreciation per MW and multiplying it by the number of years in the contract. We have used the following assumptions for this estimate: US$600 per kW as estimated investment, 15 years as expected asset life, and 10 percent as the annual discount (return) rate.