- South Africa’s Energy Minister, Mr Gwede Mantashe has announced eight preferred bidders in the 2000 MW Risk Mitigation Independent Power Producer Programme (RMIPPP).
- The Risk Mitigation IPP Procurement Programme succeeded in attracting project proposals featuring a variety of technology combinations but clearly dominated by gas power projects.
- The quantity and quality of the bid responses and potential megawatt of contracted capacity allowed for a competitive price evaluation.
The evaluation process has resulted in the selection of 8 (eight) Preferred Bids totalling One Thousand Eight Hundred and Forty-Five megawatts (1 845) and a further 3 (three) Eligible Bids totalling One Hundred and Fifty megawatts (150MW). The three Eligible Bids are subject to value for money proposition in line with the provisions in the Request for Proposal. It is important to note that these Three bidders are within the Two Thousand megawatts (2 000MW) capacity threshold in terms of the evaluation rankings, but their announcement can only be made following satisfactory value for money propositions.
The eight Preferred Bidders in alphabetical order are:
- ACWA Power Project DAO
- Karpowership SA Coega
- Karpowership SA Richards Bay
- Karpowership SA Saldanha
- Mulilo Total Coega
- Mulilo Total Hydra Storage
- Oya Energy Hybrid Facility
- Umoyilanga Energy
The solutions provided by these preferred bidders are from a combination of a range of technologies that include, Solar PV, Wind, Liquified natural gas and battery storage. The prices for the proposed solutions range from One Thousand Four Hundred and Sixty-Eight Rands per megawatt hour (R1 468 per MWh) to One Thousand Eight Hundred and Eighty-Five Rands per megawatt hour (R1 885 per MWh). The weighted average price is One Thousand Five Hundred and Seventy-Five Rands per megawatt hour (R1 575 per MWh).
Related news: Link to original list of 28 bidders HERE
These 8 projects will inject a total private sector investment amount of R45 billion to the South African economy, with an average local content of 50% during the construction period. South African entity participation from these projects is 51% with black ownership at 41%.
About Three Thousand Eight Hundred (3 800) job opportunities will be created during the 18 months construction period and a further 13 500 during the 20-year Power Purchase Agreement (PPA) term.
The Preferred Bidders are required to reach Financial Close by no later than the end of July 2021. Due to the urgency to bring power online, this date is not negotiable. It is for the Preferred Bidders to manage all the risks to reach financial close.
It is envisaged that, first power from these projects will be connected to the grid from August 2022.
Author: Bryan Groennendaal