8 December 2011
The Industrial Development Corporation (IDC) is to provide R5.2-billlion in finance to 12 of the 28 independent power producers chosen as preferred bidders to supply South Africa with renewable energy.
The IDC, a national development finance institution set up to promote economic growth and industrial development, said the 12 bidders have broad black economic empowerment (BEE) credentials and will further enhance the localisation of green industries in South Africa.
“The IDC has approved R5.2-billion towards the implementation of the 12 projects,” IDC green industries head Rentia van Tonder said in Pretoria this week.
“These are located in various provinces of South Africa, including the Northern Cape, Western Cape, Eastern Cape and North West, and are expected to boost much-needed economic activity in these areas.”
Transition to a green economy
The 28 preferred bidders were announced when the Department of Energy released its first list of preferred independent power producers on Wednesday.
According to South Africa’s Integrated Resource Plan, a 20-year projection on electricity supply and demand, about 42% of electricity generated in the country – about 3 725 megawatts (MW) – is required to come from renewable resources.
In August, the department put out a request for proposals on new generation, asking IPPs to submit their proposals for the first window, which closed on 4 November. There are five window phases in which potential bidders can submit their bids to provide power, with the second deadline in 2012.
Private sector participation
Meanwhile, Business Unity South Africa (Busa) has welcomed the announcement of the successful bidders, saying it was in line with the organisation’s views on increased private sector participation in electricity generation.
“Busa would in particular like to commend the government for the thoroughness of the process … which reflected both the high level technical rigour, as well as the security employed, to ensure a transparent process,” the organisation said in a statement this week.
“The criteria with which the successful bidders will have to comply are extensive and include the key elements of localisation and job creation,” Busa added.
“Vigorous implementation of the Industrial Policy Action Plan and the Green Economy Accord – in which commitments were made to localisation by the renewable energy subsectors – will be required to ensure the job creation benefits of the [independent power producer] program are realised.”
A full list of the preferred bidders is available on the department’s Independent Power Producer (IPP) Procurement Programme website www.ipp-renewables.co.za.