SA Energy Minister: We Are Open to Business and We Welcome Foreign Direct Investments

• SA’s Energy Minister Confirms that the country’s renewable energy independent power producer program is very much back on track.
• Independent Power Producers (IPPs) are invited to submit bids for onshore wind, solar photovoltaic (PV), concentrated solar power (CSP), small hydro, biomass, biogas or landfill gas projects.
• The Minster did not comment on the proposed amendments to the constitution which will allow the government to expropriate land without compensation and its effect on the REIPP Programme.

Speaking earlier today at the Africa Oil and Power Conference, South Africa’s Minister of Energy, Mr Jeff Radebe reiterated that the country’s Renewable Energy Independent Power Program is firmly on track and open for business.

The announcement comes after the recent announcement of the country’s revised Integrated Resource Plan which stipulates production allocation of  5670 Mw for Solar Pv, 8100Mw to wind and 8100 Mw to gas leading up to 2030.

Mr Radebe explained that Independent Power Producers (IPPs) are invited to submit bids for onshore wind, solar photovoltaic (PV), concentrated solar power (CSP), small hydro, biomass, biogas or landfill gas projects.

Their qualification process is designed in two-stages, first bid stage is the evaluation stage which requires bidders to meet minimum compliance requirements such as technical specification, financial/lending requirement and local shareholding. Thereafter bidders are evaluated based on price (bid tariff) and economic development criteria in the second stage.

Round 5 of the countries REIPPP is expected to open in November 2018. The Minister explains “the REIPPP has been designed as a series of tender or auctions that are initiated by the issue of a combined Request for Qualification (RFQ) and Proposal (RFP). Each auction makes available a total amount of megawatts (MWs) in specific technology categories. Bids are generally due within 3 months of the RFP and are screened initially for compliance with general requirements and qualification criteria”

Compliant bids are then evaluated on a comparative basis and Preferred Bidder status is awarded to the highest ranked projects within the total MW allocation and within each technology.

Financial Close (FC) and signing of contracts are expected generally within 6 – 9 months from the preferred bidder status award and Commercial Operation Dates (CODs) generally within 18-24 months of FC. These timelines are indicative and improve with each successful Bid Window.

The Minster did not comment on the proposed amendments to the constitution which will allow the government to expropriate land without compensation and its effect on the REIPP Programme.

Author: Bryan Groenendaal