- Bloomberg reports that Eskom has extended the grid access rights to Turkey’s Karpowership SA and Denmark’s Copenhagen Infrastructure Partners owned, Mulilo.
- Both companies were awarded preferred bidder status in South Africa’s controversial Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) where projects have struggled to reach financial close since July 2021.
- In June this year, Eskom announce major changes to their grid access allocation rules for independent power producers (IPP’s). Read more
The objective of the RMIPPPP was to fill the current short-term supply gap, alleviate the current electricity supply constraints and reduce the extensive utilisation of diesel-based peaking electrical generators. The Determination for the RMIPPPP was gazetted on the 7th of July 2020.
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.
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 financial close was 31st July 2023 which has come and gone without any announcement of an extension from the country’s ministry of mineral resources and energy who is responsible for managing energy procurement in the country. The ministry is headed up by devout communist, Gwede Mantashe, who has failed to feed a single electron of new generation capacity into the grid since taking office in 2019. Read more
The fate of the remaining RMIPPPP preferred bidders, ACWA Power, Oya Energy Hybrid Facility led by G7 Renewable Energies and Umoyilanga Energy lead by french IPP EDF remains unknown.
G7 Renewable Energies recently lost their first court case challenging Eskom’s new grid access rules. Read more
South Africa’s Independent Power Producer Procurement Programmes were once globally respected at the best model in the world for emerging market countries. Credibility has however deteriorated swiftly under the leadership of Mantashe. Many would also argue that looking at his track record as energy minister, he has deliberately delayed government procurement of renewable energy in favour of coal and nuclear technology. This has resulted in delays, controversy, accusations of corruption and multiple deadline extensions in procuring new energy generation capacity. Read more
Only 56 bids were received for the country’s REIPPP Bid Window 6. This marks a dramatic decline in bids by around half compared to Bid Window 5 which was massively oversubscribed, attracting a total of 102 bids – REIPPPP BW5 bidders list. Link to the full list of bidders HERE: Bid Window 6 Bids Received.
On 8 December 2022, South Africa’s Minister of Mineral Resources and Energy, Minister Mantashe announced five Preferred Bidders with projects totalling 860MW were appointed under the 6th Bid Window of the REIPPPP.
No wind projects awarded in REIPPPP Bid Window 6. The Department received Onshore Wind bid responses amounting to 4 116 MW for the Bid Window 6, all of which are located in the Eastern Cape and Western Cape supply areas. Following the confirmation from Eskom during the evaluation that no grid capacity was available to connect any proposed Onshore Wind projects in these supply areas, the Department could unfortunately not award any of the wind projects up to the allocated 3 200 MW under the bid window.
Since then, Mantashe appears to be adding preferred bidders piecemeal without any public announcements. Read more
About Gwede Mantashe
Samson Gwede Mantashe, popularly known as Gwede Mantashe is a communist, South African politician, and trade unionist, who as of 18 December 2017, serves as the National Chairperson of the African National Congress. He is also a former chairperson of the South African Communist Party and Secretary General of the ANC.
He studied at the University of South Africa in 1997 and completed a B.Com Honours degree in 2002. He also acquired a master’s degree from the University of Witwatersrand in 2008. He completed his MBA through MANCOSA in 2021
He joined the migratory labour force to eke out a living in the mining industry. Beginning his mining experience at Western Deep Levels mine in 1975 as a Recreation Officer and, in the same year, moved to Prieska Copper Mines where he was Welfare Officer until 1982.
In 1982, Mantashe moved to Matla Colliery where he co-founded and became the Witbank branch chairperson of the National Union of Mineworkers (NUM), a position he held until 1984. He was then elected NUM Regional Secretary in 1985. In recognition of his skills, Mantashe became the NUM’s National Organiser from 1988 to 1993 and its Regional Coordinator between 1993 and 1994. He was elected Secretary-General of the African National Congress at the party’s 52nd national conference in 2007.
Mantashe and his family are implicated in a string of corruption scandals. Mantashe’s daughter received R1 million in illicit Eskom money. His wife’s business received an R639 million catering contract for the still incomplete Kusile coal power plant project that has been riddled with corruption and cost overruns. His foundation is also embroiled in corruption scandals over millions in irregular payments.
In the country’s Commission of Inquiry into Allegations of State Capture, it was revealed that Mantashe received security upgrades to his three homes from the now-defunct company, Bosasa. The commission’s chair, Justice Raymond Zondo, said there was no evidence of contracts being awarded due to Mantashe’s direct interference, but there were “reasonable grounds for suspecting that Mr Mantashe accepted or agreed to accept gratification” from a company (Bosasa) that wanted business from the state and that further investigations had a reasonable prospect of making prima facie findings of corruption against Mantashe. Mantashe of course denies all charges. Read more
It is also important to recall that during Zuma’s ten-year presidency, Mantashe was a key figure in the project to shield him from accountability. As secretary-general of the ANC, he instructed members of Parliament to always side with Zuma or face discipline. As such, he was a key enabler of corruption during the Zuma years and remains part of the RET faction.
South Africans face up to 16 hours of blackouts daily this winter. Read more
Author: Bryan Groenendaal