- South Africa’s Department of Mineral Resources and Energy (the “Department”) is pleased to announce that the first two projects under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Window 6 have signed project agreements and reached commercial close on 30 April 2024.
- The remaining 4 Preferred Bidders are finalising preparations for Commercial Close but are hampered mostly by grid access related challenges, as well as inter-dependencies between projects across bid windows.
The two projects are the 240MW Virginia Solar Park led by IPP, Red Rocket, located in the Lejweleputswa District, which is the 7th renewable energy project in the Free State Province. The second project is the 120MW Doornhoek PV (Pty), led by IPP, AMEA Power, which is the 6th renewable energy project in the North West Province, and located in Dr Kenneth Kaunda District Municipality.
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The two (2) Solar PV projects will together contribute an additional 360MW to the national grid once construction is completed. The projects’ construction is expected to take no more than 24 months with new generation capacity expected to come online around May 2026.
These projects, developed by international investors in partnership with local players, will attract a total investment of R4.9 billion. South African Entity Participation stands at 49% for each project.
In support of the current economic challenges that South Africa is facing, the two projects have committed a total of 2 034 job opportunities (measured in job years), which includes 859 jobs during construction and 1175 in operations. The projects have also committed a total amount of R 389 million to be spent on Skills Development, Supplier Development, Enterprise Development, and Socio-Economic Development initiatives in the communities within which they will be located, over their 20-year lifetime.
The Independent Power Producer Procurement Programme (IPPPP) has been the major driver behind South Africa’s growing sector of Independent Power Producers. To date, the programme has 95 IPP projects that are supplying 7 336 MW to the national grid, including from renewable and diesel generators.
The REIPPPP Bid Window 6 was released to the market on 6 April 2022, following the promulgation of the Ministerial Determination of 11 318 MW on 25 September 2020, with concurrence from NERSA. Six (6) Preferred Bidders, all Solar PV projects, were announced on 8 December 2022.
The remaining 4 Preferred Bidders are finalising preparations for Commercial Close but are hampered mostly by grid access related challenges, as well as inter-dependencies between projects across bid windows. Some projects form Bid Window 5 have not reach financial close nealry three years after being awarded preferred bidder status. Read more
The Department and IPP Office said they are working tirelessly with Eskom to resolve these challenges, to ensure that all projects can reach Commercial Close and start construction.
Author: Bryan Groenendaal
