gib - bankability study by marco grossmann at gib summit
DESCRIPTION
Presented at the 4th Global Infrastructure Basel Summit 21 & 22 May 2014. Read more about the world leading platform for Sustainable Infrastructure Finance at www.gib-foundation.org. Next Summit: 27 & 28 May 2015 in SwitzerlandTRANSCRIPT
GIB Bankability Study on City of Johannesburg Fuel Switch
––––––––––––––––––––––––––––––May 21th 2014
Marco GrossmannProject Leader
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Content
1) Goal of and Approach to the Bankability Study
2) Rea Vaya BRT and Metrobus
3) Draft Content Bankability Study
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Goal and Approach
The ultimate goal of the study is to create a document that serves potential investors as brochure for financing a fleet of approximately 400 Diesel Dual Fuel buses, by:
• Applying the GIB Grading to mitigate risk and to showcase sustainability of the project in order to potentially lower borrowing/interest rates
• Conducting in depth analysis of the fuel switch of Rea Vaya and Metrobus
The approach is not to reinvent the wheel, but:
• To hold qualitative interviews in order apply the GIB Grading
• To collect, analyse and further develop already carried out work
• To build a tailor made financial model
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Rea Vaya BRT
• Being rolled out in phases• Phase 1A: for 2010 SWC
from Soweto to CBD• Phase 1B: second route
from Soweto but different alignment
• Phase 1C: linking North and South and creating TOD opportunities
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Rea Vaya
• Phase 1A– 25k of trunk route (dedicated) for
18 m articulated buses– 3 complementary and 5 feeder
routes using 13 m buses– 30 Rea Vaya stations service
passengers– Passenger numbers average of
43 000 per day– 143 Euro IV buses – 1000 permanent employment– Registered for voluntary carbon
credits• Phase 1B
– Another 18 km, 17 stations– 134 Euro V buses– Being rolled out since October
2013– Projected passenger numbers
60 000 per day– 600 permanent job opportunities
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Metrobus
Timeline• 1942: Metrobus
established as City department
• 2001: Metrobus becomes a municipal owned entity
• 2010/11: Transport Department looks at future options for Metrobus to respond to changing public transport environment in City, aging fleet and outdated fare collection system
Key facts and figures• 1000 employees• 450 buses• 3 major depots
Draft Content of Bankability Study
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1. Context and selected best practice examples
2. Sustainability and Risk Analysis
3. Technology analysis
4. Technology provider
5. Logistics/Infrastructure
6. Legal and Policy Framework
7. Financial Cost/Benefit Analysis
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Sustainability and Risk Analysis
Accountability
Transparency
Customer Focus
Results Orientation
Poverty Responsiveness
Power-Balanced Partnership
Shared Incentives
Sound Financial Mechanisms
Proactive Risk Management
Resource Protection
0
2
43.433.57
3.14
2.67
3.33
3.50
3.33
3.29
3.33
3.00
Good Performance (65 Percentile)
Modest Performance (10 Percentile)
Self Evaluation
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Technology Analysis 1/2
General Description of Dual Fuel Technology (DDF)
• NGV market overview
• Technical description of DDF
Economy
• Proven and Safe Technology
• Reduced running cost due to lower cost of CNG
• Effects on maintenance cost
• Availability of CNG / Grid, possibility to diversify
to Biogas/methane (Fuel Security)
Ecology
• Reduced Carbon Emissions (15 – 20 %)
• Huge potential in Biogas/methane for further reduction (as well as NOx, PMs etc.)
Society
• Job creation opportunities through CNG, Biogas, TOD
• Local assembly of body and chassis
Ecology
Society
Economy
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Technology Analysis 2/2
NGV and Bio fuels
Electric Vehicle’s and Hybrids
Fuel Cells
Building on todays innovation for tomorrows solutions
Maturing “Fit for Purpose” technology Innovation Cycles for each solution in an integrated and sustainable manner
Low Skill Jobs and High Innovation
Medium Skill Jobs and High Innovation
High Skill Jobs and High Innovation
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Logistics and Infrastructure
Stakeholder-Analysis
• Gas Distributors,
• Grid Operators,
• Regulating Bodies
Fuel Security
• Pricing policies regarding CNG
• Availability of CNG, incl. outlook
• Solutions for Filling Stations
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Legal and Policy Framework
Policies and Regulations in place e.g.:
• Municipal Financial Management Act
• Supply Chain Management Act• Division of Revenue Act• Land Transport Act• Requirements towards local job
creation, public consultation etc.
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Financial Cost/Benefit Analysis
Composition of tailor made financial model, by comparing
Diesel vs Diesel/Gas vs Dedicated CNG in terms of:
• CAPEX, • OPEX (bus running and fix cost),
• Rate of Return (IRR), • Net Present Value (NPV), • Payback time, lifetime analysis,• Sensitivity Analysis