Mainstream and Ikamva Consortium advancing with six 75MW solar projects in South Africa

  • Mainstream Renewable Power and Ikamva Consortium are advancing with their six 75MW solar projects towards financial close now that key implementation and 20-year power purchase agreements (PPAs) are in place, according to Engineering News.
  • The projects, totalling 450 MW, were controversially awarded under Round 5 (bid window 5) of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

The Consortium signed 20-year Power Purchase Agreements (PPAs) and Implementation Agreements with Eskom Holdings SOC Limited (Eskom) and the Department of Mineral Resources and Energy (DMRE) respectively, which is a significant milestone in advancing the projects towards financial close in 2023 and commercial operations in 2025.

All six solar projects are in the Municipality of Tokologo, in the Free State, and will be the province’s largest renewable energy development. When fully operational, 1.8% of the revenue from each of the projects will be committed towards economic development related activities for nearby local communities.

Related news: The BBBEE cat that has all the renewable energy cream in South Africa

The outcome of bid window 5 is alleged to be rigged by some IPP’s.  Their strategy was to submit grouped projects with individual project bids according to the 75MW threshold for solar and 140MW for wind power. This allowed them to capitalise on economies of scale and gave them an unfair advantage over IPP’s that submitted bids for single projects. The subsequent outcome is glaring.  Mainstream Renewable Power won a total of 12 of the 25 projects awarded in Round 5.

The outcome has also raised serious questions on the competency of the country’s Independent Power Producer Office (IPPO). The acceptance of such bids and subsequent awarding of preferred bidder status raises serious questions regarding fair competition and broad base black economic empower principles (BBBEE). Read more

More recently, during a plenary session at the Africa Energy Indaba, South Africa’s energy minister, Gwede Mantashe, said that there is corruption in renewable energy. Read more

Once internationally respected, South Africa’s REIPPPP has lost much of it credibility. The much-needed new generation capacity has failed to come online in good time under the programme which has dropped the country into a massive energy crisis. The country faces up to 10 hours of rotational blackouts daily. Read more

Related news: South Africa’s REIPPPP in tatters while energy crisis deepens

Author: Bryan Groenendaal

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