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First private coal power station bidders announced

Oct 10 2016 10:54
Liesl Peyper

Cape Town - Private bidders Thabametsi and Khanyisa won the first bid window to build South Africa’s first independent coal-fired power stations, Energy Minister Tina Joemat-Pettersson said on Monday at a media briefing in Cape Town.

The Coal Independent Power Producers (IPP) Programme is the first baseload energy programme which allows the private sector to provide coal-generated energy.

At the end of December 2014, the Department of Energy issued a Request for Proposals for coal generation. The coal programme will consist of separate bid submission phases whereby 1 000 MW would be available for allocation under the first bid submission phase. 

Thabametsi, based in Limpopo, and Khanyisa, based in Mpumalanga, will collectively provide 863.3MW of coal-generated power to South Africa’s grid within the next five years.

The two bids received are fully funded incorporating equity and debt sourced from among others the Public Investment Corporation (PIC), Development Bank of Southern Africa and the Industrial Development Corporation, Joemat-Pettersson said. Developers from Korea, Japan and Saudi Arabia will also be involved in the build project. 

Joemat-Pettersson said both bidders submitted prices well below the stipulated qualification price of 82c/kwh, which will escalate in accordance with CPI plus 1%. 

Khanyisa is expected to begin commercial operation in December 2020, while Thabametsi will follow closely with generation in March 2021.

Although the two projects will ad much needed energy to South Africa's national grid, Joemat-Pettersson expects the build programme to play a significant role in job creation and infrastructure investment, while also stimulating local procurement. 

She expects over 20 000 jobs to be created among the communities in Limpopo and Mpumalanga where the two successful bidders are based. 

Joemat-Pettersson added that although South Africa’s energy build plan still incorporates the development of fossil fuel power stations in the foreseeable future, the country remains committed to transition to low-carbon economy. “We are already seeking ways and new technologies to use fossil fuels with minimal carbon emissions.” 

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tina joemat-pettersson  |  ipp  |  energy  |  coal
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