CONFIDENTIAL - FOR IDC ASSESSMENT PURPOSES ONLY

IDC Municipal Nano-Grid

Green Energy Funding Proposal

IDC Nano-Grid

IDC Infrastructure Funding Application

Municipal Nano-Grid Deployment Programme

A strategic initiative to deploy 3kWp Solar PV and 10kWh Battery Energy Storage Systems across four South African municipalities, achieving NERSA-compliant sustainable electricity trading status.

Total Municipalities

Northern & Eastern Cape Regions

18,553

Households Served

Direct beneficiaries

R1.34B

Total Funding Required

20-year infrastructure loan

42%

Cost Avoidance

Annual savings vs Eskom

Role of UtCS as Appointed Entity

Utility Cost Solutions - Strategic Implementation Partner

UtCS has been appointed as the strategic implementation partner to assist the participating municipalities in achieving NERSA-defined Sustainable Electricity Trading Status. This status requires municipalities to achieve an Electricity Price Margin (EPM) of minimum 60% after settling Bulk Supply Costs.

Strategic Objective

Deploy innovatively and strategically placed Nano-Grids to impose maximum cost avoidance, enabling municipalities to achieve the 60% EPM benchmark.

Financial Impact

Through TOU arbitrage and maximum demand reduction, achieve >40% total cost avoidance, directly improving each municipality's financial sustainability.

NERSA Financial Indicators - Sustainability Benchmarks

Key performance indicators for sustainable electricity distribution

Performance Indicator	Benchmark	Acceptable Range
Electricity Price Margin (%)	60%	58% - 62%
Bulk Purchase Cost / Total Expenditure (%)	75%	58% - 78%
Energy Losses (%)	10%	5% - 12%
Revenue Collection Rate (%)	95%	95%
Repairs & Maintenance (% of revenue)	6%	6% - 15%
Net Surplus Margin (%)	15%	10% - 20%

Source: NERSA Guidelines - Municipalities that operate within these benchmarks are expected to run a sustainable and efficient electricity business.

Municipal Funding Overview

Detailed breakdown of funding requirements and projected cost avoidance per municipality

Municipality	Households	Funding Required	Annual Eskom Cost	Cost Avoided	Reduction
Dr Beyers Naude	12,644	R910.37M	R152.13M	R88.24M	42%
Hantam	2,879	R207.29M	R30.18M	R17.51M	42%
Richtersveld	2,095	R150.84M	R20.20M	R11.72M	42%
Kamiesberg	935	R67.32M	R15.82M	R9.17M	42%
Total Programme	18,553	R1.34B	R218.34M	R126.63M	42%

Solar PV System

Capacity per Unit3 kWp

Deployment CostR 40,000

Average Daily Generation12.5 kWh

Total Units11,132 kWp

Battery Energy Storage

Capacity per Unit10 kWh

Deployment CostR 48,000

Usable Capacity (90% DoD)9 kWh

Total Units18,553

Total Investment Opportunity

R 1 335 816 000

Combined Nano-Grid deployment cost across all 4 municipalities

PV Cost Component

R742.13M

BESS Cost Component

R890.54M