Africa Green Energy Holdings Business Plan › Section 13 › Financial Plan – Assumptions

This section sets out the integrated financial model assumptions that
underpin AGEH’s projected Profit & Loss, Balance Sheet and Cash Flow
statements presented in Sections 14, 15 and 16. The model is built
bottom-up at the project SPV level and consolidated to holding company
level, in nominal Rand terms, over a 12-year horizon (FY2027 development
through FY2036 steady-state operations). The base case reflects
management’s central case; sensitivity outputs are presented in Section
18.

13.1 Macroeconomic Assumptions

Macroeconomic assumptions are anchored to the South African Reserve
Bank (SARB) Monetary Policy Committee projections and National
Treasury’s 2026 Medium-Term Budget Policy Statement (MTBPS). Headline
CPI is modelled at 4.5% over the projection horizon, consistent with the
SARB’s 3-6% target band and the recent revision toward a 3% point
target. The ZAR/USD rate of R18.50 reflects the trailing 12-month
average; sensitivity is tested at R16.50 (revaluation) and R21.00
(depreciation). The real risk-free rate is anchored to South African
10-year inflation-linked bond yields.

Table 13.1 — Macroeconomic Assumptions (Sources: SARB, National
Treasury, NERSA)

13.2 Revenue Assumptions

Revenue is generated from three distinct streams: REIPPPP Bid Window
8 PPAs (solar PV), corporate PPAs (wind), and BESIPPPP / energy-trading
revenues (battery storage). Each stream is modelled with asset-specific
yield, degradation and indexation parameters.

Solar PV (300 MW)

Table 13.2 — Solar PV Operating Assumptions

Wind (150 MW)

Table 13.3 — Wind Operating Assumptions

Battery Energy Storage (100 MW / 400 MWh)

Table 13.4 — Battery Storage Operating Assumptions

13.3 Operating Cost Assumptions

Operating costs are modelled bottom-up per asset class and indexed at
South African CPI unless otherwise stated. The model carries a 10%
management reserve on aggregate OPEX for the first three operating years
to absorb early-life teething costs, declining to 5% thereafter.

Table 13.5 — Operating Cost Assumptions by Asset Class

13.4 Capital Cost & Funding Assumptions

Total project capital cost is R8,850 million inclusive of development
costs, hard EPC scope, owner’s costs, IDC and a contingency reserve. The
CAPEX build-up reflects competitive Tier-1 EPC quotations received
during the December 2025 tender process, benchmarked against REIPPPP BW7
awarded tariffs and IFC’s emerging-markets cost database.

Table 13.6 — Total Capital Expenditure Build-Up

Figure 13.1

13.5 Capital Structure & Debt Terms

AGEH’s senior secured debt facilities are structured on a
non-recourse project-finance basis with separate SPVs for each asset
class. Headline terms reflect indicative term sheets received from the
IFC, three DFI co-lenders and two South African commercial banks, all of
which have completed credit committee preliminary approval.

Table 13.7 — Capital Structure & Indicative Debt
Terms

Figure 13.2

13.6 Tax & Depreciation

The financial model applies the South African corporate income tax
rate of 27%. Section 12B of the Income Tax Act permits 100% accelerated
depreciation for renewable energy assets brought into use after 1 March
2023, materially enhancing early-year tax shields. AGEH’s structure
routes asset ownership through SPVs to maximise utilisation of these
allowances:

• Solar PV & Wind generation assets: 100% Section 12B allowance
  in Year 1 of commercial operation, creating substantial assessed-loss
  carryforwards that shelter taxable income through Year 6-7.
• BESS assets: 50/30/20 accelerated allowance under Section 12B for
  storage assets, with full deduction within three years.
• Civil works & substation infrastructure: Straight-line
  25-year depreciation per IFRS, separately tracked from tax
  depreciation.
• Capitalised development costs: Amortised over PPA tenor for
  accounting purposes; deductible in year of incurral for tax
  purposes.
• Carbon tax: Renewable assets benefit from full carbon credit
  offset eligibility under the Carbon Tax Act (Act 15 of 2019);
  incremental revenue not modelled in base case.

13.7 Working Capital & Reserves

The model assumes 60 days of revenue receivable (Eskom historically
pays within 35 days; conservatism reflects corporate counterparties) and
30 days of OPEX payables. Three dedicated reserve accounts are funded
from operating cash flow per lender requirements:

• Debt Service Reserve Account (DSRA): 6 months of forward debt
  service, funded at financial close from drawdowns.
• Maintenance Reserve Account (MRA): Progressively funded over
  Years 1-5 to a target of R125 million by Year 6, sized against the
  major-overhaul schedule.
• BESS Augmentation Reserve: R15 million per annum from Year 1,
  sized to fund Year-7 and Year-12 cell replacement programmes.

13.8 Distribution Policy

Dividend distributions to shareholders are subject to the following
lender-mandated lockup tests: (i) Historic 12-month DSCR ≥ 1.20x; (ii)
Forward-looking 12-month DSCR ≥ 1.20x; (iii) All reserve accounts fully
funded; (iv) No event of default subsisting. Subject to these tests,
100% of distributable cash is paid out semi-annually. Lock-up cure
mechanisms include an equity cure provision and a 12-month standstill
before enforcement.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Africa Green Energy Holdings (Pty) Ltd.