IPP deadlines extended – South Africa

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South Africa’s Energy Minister Dipuo Peters officially confirmed on Thursday that the deadline for the financial closure of the first 28 renewable energy projects named as preferred bids in December had been extended until the end of July.

The deadline had originally been set for June 19, but the Department of Energy (DoE) decided to extend the deadline for the signing of the implementation, connection and power purchase agreements in an effort to assist bidders struggling to finalise outstanding bid commitments.

Peters described the Renewable Energy Independent Power Producer Programme (REIPPP) as a “pioneer” process globally and indicated that the decision to extend the timeframe had been informed by President Jacob Zuma’s appeal to government departments to alleviate constraints on businesses seeking to invest.

The process had involved a “learning curve for all of us” and the DoE was prepared to “meet developers halfway to ensure that the investments take place”.

She indicated that some bidders were battling to meet the “stringent” requirements of financial institutions, while others were dealing with environmental appeals processes, or working on ways to meet the jobs, local content and community development commitments outlined in their bids.

It was important to ensure that as many of the 28 projects licenced by the National Energy Regulator of South Africa (Nersa) as possible moved towards implementation to bolster confidence in the REIPPP process.

“This window must give us the requisite result to convince ourselves, to convince industry and to convince South Africans that this is the route to go,” Peters said.

Through the REIPPP, government was seeking to procure 3 725 MW of capacity, to be introduced into South Africa’s power generation mix between 2014 and 2016.

On December 7, Peters named 18 solar photovoltaic projects, representing 631.53 MW of capacity, two concentrated solar power projects, with a combined capacity of 150 MW, and eight onshore wind developments, representing 633.9 MW, as the first preferred bidders.

Subsequently, 19 additional projects, collectively representing 1 043.9 MW, were named in May, following the second-bid-window evaluation, which took place between March 5 and May 21.

The 47 preferred bids, which represented some 2 459.4 MW of renewables capacity, were expected to collectively invest some R70-billion to develop their projects.

However, Peters said that any capacity not taken up by the first 28 bidders would have to be included during window three, which was initially scheduled for August, but which was likely to be delayed as a result of the first-window schedule change.

She also indicated that the financial close deadline for the 19 second-window projects, which was initially set down for December 13, would probably be moved into the new year.
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