Kalahari Grid Energy — Risk Analysis
The quantified risk exposure and the mitigation architecture covering tariff, offtake, construction, grid, currency, financial and execution risks.
Section 10 · Business Plan
Risk Analysis
The quantified risk exposure and the mitigation architecture covering tariff, offtake, construction, grid, currency, financial and execution risks.
| # | Risk | L | I | Mitigation |
|---|---|---|---|---|
| 1 | Grid capacity / curtailment | 5 | 5 | Grid-first siting, corridor diversification, storage, wheeling, ITP participation |
| 2 | Tariff insufficient for gearing | 4 | 5 | Corporate-PPA-weighted offtake to lift blended tariff; lower gearing; DFI concessional tranches |
| 3 | Construction / EPC delay | 4 | 4 | Fixed-price date-certain EPC; liquidated damages; independent engineer; completion support |
| 4 | Financial-close velocity | 4 | 4 | Grid-first pipeline; committed equity; standardised SPV templates; DFI anchor |
| 5 | Offtaker credit (Eskom/NTCSA) | 3 | 4.5 | Government-backed REIPPPP PPA/IA/GFSA; creditworthy C&I diversification |
| 6 | Currency (ZAR/USD) mismatch | 4 | 3.5 | USD-linked PPAs; local-currency debt matching; hedging where economic |
| 7 | Policy / REIPPPP continuity | 3 | 4 | Diversify beyond REIPPPP into corporate PPAs & wheeling; DFI backing |
| 8 | Wind tariff uncompetitiveness | 4 | 3 | Corporate offtake for wind; grid-corridor access; storage pairing |
| 9 | BESS technology / augmentation | 3 | 2.8 | Augmentation reserved in model; warranties; proven chemistries |
| 10 | Regional (SADC) expansion | 3 | 3.3 | Phase 3 only; local partners; DFI political-risk cover |
10.2 Quantified risk exposure
Credit decisions need magnitudes. The table estimates the
steady-state annual EBITDA impact of each principal risk at 5 GW scale
(base EBITDA $444m), before mitigation.
| Risk event | Annual EBITDA impact | Absorbing buffer |
|---|---|---|
| Sustained 20% grid curtailment | −$85m to −$120m | Corridor diversification; storage; wheeling; take-or-pay where available |
| Blended tariff 15% below plan | −$65m to −$95m | Corporate-PPA weighting; contract indexation |
| One phase delayed 18 months | Revenue deferral; IRR drag | Phased close; bridge; EPC LDs |
| ZAR depreciation vs USD | Net positive on USD PPAs | Natural hedge; local-debt matching |
| Eskom payment stress | Timing / receivable risk | Government support agreements; C&I diversification |
| BESS augmentation cost overrun | −$10m to −$20m | Reserved in model; supplier warranties |
The dominant, correlated exposures are grid curtailment and tariff
insufficiency — the same two variables that determine bankability in
Section 7. This concentration is the defining characteristic of the
investment: it is not a diversified bet across many independent risks,
but a focused bet on grid access and premium offtake. The downside
scenario (Appendix D) combines curtailment and a tariff shortfall to
size the stress case.
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 Kalahari Grid Energy (Pty) Ltd.