Mantashe signs project agreements for two more Risk Mitigation IPP Procurement Projects

The two Projects, totalling 203MW, are both hybrid renewable Projects, which consist of a combination of Solar PV, Onshore Wind and Battery Storage technologies.

The new Projects that have signed Project Agreements are as follows:

Extended delays in RMIPPPP

In March 2021 eight preferred bidders totalling 1845MW and a further 3 eligible bids from Scatec totalling 150MW were announced. The eleven projects awarded preferred bidder status outcome included three gas powership projects totalling 1220MW submitted by Turkish owned independent power producer Karpowership SA. The other eight power generation projects are made up of hybrid systems which include solar PV, wind and energy storage technology. The prices for the proposed solutions range from R1 468 per MWh to R1 885 per MWh. The weighted average price is R1 575 per MWh.

The original deadline of 31st July 2021 was set for independent power producers (IPP’s) appointed as preferred bidders, to reach financial close for their projects in South Africa’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP). It has since been extended multiple times. Only three Scatec projects, Kenhardt 1, 2 and 3, with a total capacity of 150MW, has managed to reach financial close – in July last year. The most recent  deadline for the remaining eight projects was 31 July 2023.

The two projects awarded project agreements yesterday have up to December 2023 to finalise conditions precedent to conclude financial close and start with project construction. The new generation capacity is expected to be online from 2025 onwards.

This brings the total number of Projects that have signed agreements under the RMIPPPP to five (5) out of the eleven (11) Preferred Bidders appointed, which will add a total of 353MW of dispatchable capacity to the national grid.

The total investment attracted from the Projects that have signed agreements today is R14.6 billion, which is a substantial input into our economy the DMRE in a statement. “These projects will contribute a total of 3 966 job year opportunities in the construction and operation of these power plants and will also contribute over R610 million over their 20-year lifetime on Skills Development, Supplier Development, Enterprise Development, and Socio-Economic Development initiatives in the communities within which they operate,” the department added.

Author: Bryan Groenendaal

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