Sumitomo Dorper Wind Farm

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Dorper Wind Development was created to build, own and operate a 100 MW wind farm to be located in the Eastern Cape Privince of South Africa. The project company was a joint venture between Sumitomo Corporation, Rainmaker Energy, and Broad Based Black Economic Empowerment partners. Sumitomo was the largest shareholder with a 60% equity stake. Also invested with a small stake was a community trust for Black Empowerment (25%). Rainmaker's Dorper Wind Development was to hold 15% of the equity. The project was to consist of 40 turbines of 2.5MW each. The project was awarded in a tender administered by the Department of Energy where a critical factor in the decision was the projected price of power. Contractual negotiations on the PPA and financing were to be completed by June 2012. The tender was open to all technologies, 53 bids were submitted of which 28 made it to preferred bidder status. These 28 project account for a total of 1,416MW if all are implemented. The EIA was passed (as was required for all bidders). The project was to hold a 20 year PPA with ESKOM Holdings. The project was to hold a payment guarantee from the South African DoE. Legal advice was provided by Shearman & Sterling. The total project cost was estimated at ZAR 2 billion (USD 258 million), with commissioning expected for 2014. Financial closure was expected for mid-2012. The project was to apply for UNFCCC CDM financing. According to the Project Design Document, the sponsor was envisaging a 550MW wind farm. The financial structure was as follows: Development costs: ZAR 110 million EPC costs: ZAR 9,086 million Other costs (including financing fees, DSRA): ZAR 2,536 million Total project cost: ZAR 11,732 million Of which was ZAR 3,530 million in equity, and ZAR 8,212 million in debt. Debt was expected to be provided by: Nedbank, Standard Bank, Rand Merchant Bank, FMO, Industrial Development Corporation, Development Bank of South Africa, covering 70% of total project cost. The project IRR without CER was expected at 12,58%, with CERs at 16.31%. In November 2011, the Dorper project reached financial close. Project debt was almost exclusively provided by South African Banks. FMO, the dutch development bank was the only foreign debt provider to the project. The project holds a guarantee from Euler Hermes, covering Y 12 billion (or: 80% of total loan amount). http://www.nersa.org.za/Admin/Document/Editor/file/Consultations/Electricity/Presentations/Dorper%20Wind%20Farm%20(Pty)%20Ltd.pdf http://www.shearman.com/Shearman--Sterling-Represents-Consortium-Led-by-Sumitomo-on-150-Million-Dorper-Wind-Farm-Project-in-South-Africa-12-21-2011/ http://www.researchviews.com/energy/power/wind/DealReport.aspx?sector=Wind&DealID=182651 http://www.energy.gov.za/files/esources/kyoto/2012/DorperLOA_request_01032012form.pdf http://www.rainmakerenergy.co.za/News121211.htm http://www.sumitomocorp.co.jp/english/news/2011/20111208_120000.html http://www.steelguru.com/international_news/Sumitomo_Corp_inks_deal_for_Dorper_wind_farm_project_in_SA/291100.html