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State, power producers sign contract

Nov 05 2012 13:52 Sapa

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Pretoria - The first contracts between the government and independent power producers (IPPs) to add 1400 megawatts of renewable energy to the national grid were signed in Pretoria on Monday.

Energy Minister Dipuo Peters said Monday's signing ceremony with the 28 approved bidders for the so-called Window 1 was an auspicious day which presented various benefits for the South African economy, not limited to the energy sector.

"Our government expects this programme to make a substantial contribution to the economy in various ways.

"It [the project] will provide greatly needed energy, with both measurable and immeasurable spin-offs, including job opportunities and skills development," she said.

Window 1 describes the first round of bids sought in terms of government's 20-year Integrated Resource Plan for renewable energy, including solar, wind, biomass, and biogas projects.

It was estimated that Window 1 would bring investment worth R47bn into the energy sector, Peters said.

The projects were not limited to particular provinces, in a bid to ensure all South African communities benefited, especially the poor.

"I am proud to announce that the projects are spread across some of the most rural and least developed provinces, including the Eastern Cape, Northern Cape, Limpopo, North West, and Free State.

"Some of the IPP bidders have undertaken to set up community development initiatives that will uplift at least one community within a 50km radius of each project. Government is sure that local communities in the vicinity of the IPP projects will gain," said Peters.

The 28 companies were appointed as preferred bidders in December last year. Monday's signing of the contracts was expected to run past 20:00.

The pacts being signed included power purchase and implementation agreements.

In a statement earlier this year, the department said it estimated that the full five-window bid process "will attract project proposals to the value of R100bn over its lifetime".

Last month, power utility Eskom applied for a 16% annual increase for five years in the price of electricity - from April next year to March 2018. A portion of this  3% - was intended to support the introduction of IPPs.
 
eskom  |  dipuo peters  |  renewable energy  |  electricity  |  ipps
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