Energy minister Jeff Radebe today said the independent power producer (IPP) programme had been designed to enlist the private sector to develop an impressive renewable energy generation network in the country.
“On the renewable sector, the independent power producer programme, as it is known, is a competitive tender process that has been designed by our country to facilitate private sector investment into great connected renewable energy generation in South Africa,” he said.
Radebe was speaking at the three-day oil and power conference currently under way at the Cape Town International Convention Centre (CTICC).
“The qualification process is designed in stages. First stage is the evaluation stage, which requires all bidders to meet minimum compliance requirements such as technical specification, financial lending requirements and local share holding,” he added.
He reminded delegates that in April he had signed off on an additional 27 projects that were procured under the renewable power producer programme.
“These 27 projects were allocated in different provinces throughout South Africa and includes technology.”
Radebe further said that the recent procurement of the 27 projects was the biggest IPP procurement by the department of energy to date, and represented a total of R56 billion ($4.9 billion) of investment with about 2 300 megawatts of generation capacity to be added to the grid over the next five years.
“This investment of R56 billion is injected obviously by the private sector into the economy with no contribution from government other than the support of the state utility Eskom, in the event of default by the buyer,” he said, adding that the investment is expected to have a positive impact on the country’s economy and competition in the energy sector which benefits the consumer in the long run.
According to Radebe, new foreign and local direct investment expected from these projects should provide strong economic growth to support South Africa’s economy wanting to lift up its head at a time of severe local fiscal constraint.
“It is expected that this investment will certainly have a positive effect and contribute to the much needed jobs in our country, especially in the rural areas where these projects are mainly located. With the signing of the agreement, our government did not only reconfirm our firm commitment to renewable energy, but also to a solid partnership with the private sector in the generation of electricity, which includes coal and gas while pursuing our energy transmission objectives for the future,” he said.
“We expect that these projects will reach financial close by the end of this calendar year and commence construction. Over and above the expected economic benefits of this program, the renewable energy program is confirming South Africa’s commitment together with 195 other countries around the globe to the Paris agreement for the reduction of CO2 emissions worldwide.”
– African News Agency (ANA)