Yesterday, 9 May 2013, the Department of Energy signed the Implementation Agreements and the Direct Agreements with the 19 successful bidders of Window 2 of the Renewable Energy Independent Power Producers programme, whilst Eskom signed the Power Purchase Agreements with the same bidders.
During her address at the signing ceremony, the Minister of Energy Ms Dipuo Peters said that the creation of job opportunities, local content, skills and community development remain the essential ingredients of our Renewable Energy Programme economic development model.
“As Government, we took it upon ourselves to ensure that partnerships with the private sector and other key stakeholders are forged to ensure the fruition of these commitments,” Minister Peters said.
The Minister further emphasised that localisation needed constant emphasis, because, through its design and implementation, the REIPPP is biased towards the economic development of South Africa. She further indicated that the department is starting to see progress in the establishment of local manufacturing nodes that produce some of the requisite components in the construction of solar and wind farms. For instance, the launching of manufacturing plants for inverters and wind masts in the Western Cape and Coega IDZ respectively.
The opportunity to use this programme for purposes of economic transformation was also re-emphasised by the Minister. “The inclusion and participation of women, youth, and the disabled is a weakness that we need to address in this programme. It is my hope that this will improve in the next bidding windows. It is unthinkable that women empowerment is overlooked under my watch,” she said.
The Director-General of The Department of Energy, Ms Nelisiwe Magubane cautioned bidders in cases where compliance is bridged. “From our side, in order to improve the bidding programme, we recently established a unit dealing with monitoring of the commitments made through the bid submissions. The unit will ensure that you keep to your commitments, particularly those pertaining to socio economic development. Failure to meet these commitments will have dire consequences” said the Director-General.
The department outlined that the total financial injection in all these projects amounts to R28 billion for a net generation capacity of 1 043 MW. In addition to the November 2012 Window 1 closure that saw an investment value of R27 billion and 1 415 MW capacity, these latest investment and capacity additions are a highly welcome and should bolster our quest to grow the economy while we simultaneously work to create new job opportunities. In order to ensure the success of this initiative, Minister Dipuo Peters stressed that the department will continue to provide the required technical and administrative support to all the preferred bidders.
Facts Sheet on Bid Window 2 REIPP
This information represents the commitments made by Bid Window 2 preferred bidders in the Renewable Energy IPP Procurement Programme (Programme). The department has included these commitments in the Implementation Agreement for each of the preferred bidders.
Each preferred bidder will be required to comply with its commitments and obligations, failing which, penalties will be applied which may lead to termination of the Power Purchase Agreement. The Power Purchase Agreement will be in force for a period 20 years from the commercial operation date.
Economic Development is comprised of:
- job creation, which is focused on the creation of jobs for South African citizens, black people and people located in the vicinity of the projects;
- local content which is focused on procuring goods and services from local suppliers and services providers;
- ownership which is focused on encouraging shareholding by black people and local communities in the programme;
- management control, which is focused on involving black people in the management structures as participants in the programme;
- preferential procurement, which is focused on subcontracting to empowered entities, small, medium and micro-sized enterprises (SMMEs) and entities owned by women;
- enterprise development, which is focused on the development of SMMEs through initiatives such as programmes; and
- socio-economic development, which is aimed at the development of communities surrounding the sites where the projects are located.
All bidders, in terms of the Request for Proposals (RFP) were required to meet certain minimum thresholds in relation to 4 of the 7 Economic Development in the programmes. That is, job creation, local content, ownership and socio-economic development, and thereafter competed on additional commitments made in response to Economic Development.
Some of the commitments made by the Preferred Bidders in the programme will be highlighted in this fact sheet.
Job creation
As indicated above, job creation was a mandatory requirement in the RFP. All bidders were required to meet certain minimum thresholds.
For Enquiries:
Johannes Mokobane
Tel: 012 406 7484 / 7081 / 7469
E-mail: johannes.mokobane@energy.gov.za or mediadesk@energy.gov.za
Zodwa Batyashe
Tel: 012 406 7484 / 7081 / 7469
E-mail: zodwa.batyashe@energy.gov.za
Thandiwe Maimane
Tel: 012 406 7484 / 7081 / 7469
E-mail: thandiwe.maimane@energy.gov.za
