27 renewable energy projects to be signed
Energy Minister Jeff Radebe says the project agreements of the 27 renewable energy Independent Power Producer Projects will be signed on Tuesday 13 March. The Minister made the announcement when he briefed the media on Thursday.
“I am delighted to announce that the project agreements of the 27 Renewable Energy Independent Power Producer Projects (REIPPP), including the power purchase agreements with Eskom, will be signed on Tuesday, 13 March 2018, with the full support of the President and my Cabinet colleagues the Ministers of Finance and Public Enterprises as well as Eskom,” he said.
The Minister said the announcement was a milestone following a protracted period of uncertainty and the signing of the agreements would be re-confirming government’s commitment not only to renewable energy, but also to a solid partnership with the private sector in pursuing government’s energy transition objectives for the future.
Minister Radebe also said that signing of the long-awaited agreements will bring much needed policy and regulatory certainty and maintain South Africa’s position as an energy investment destination of choice.
“This initiative will enable R56 billion of new investment in the economy over the next two to three years, which will immediately contribute to growth in the economy supporting the already positive achievement of 3.1% GDP growth in the quarter four.
“This programme, as well as the proposed future initiatives, will have a significant contribution in job creation across the energy value chain including the re-establishment of industrial development and support to the technical training of young people to be absorbed in the labour market,” he said.
Renewable energy projects to create 61 000 full-time jobs
The Minister said the renewable energy programme, which is aligned to the Paris agreement on the reduction of emissions as well as the South African environmental policy, will create thousands of jobs.
“These programmes will contribute towards competitive market pricing of electricity, both for the household consumer as well as for industrial usage. “This will be achieved firstly through the mere entrance of new and efficient market participants and secondly through the variety of sources for electricity generation. Lower electricity prices such as what we are experiencing with renewable energy generation will assist indigent households to cope with the rising cost of living.
“In a nutshell, these projects will provide 61 600 full time jobs of which 95% is for SA citizens, mostly during plant construction specifically with a focus on youth employment.
“Northern Cape will have 59% of the jobs created, followed by Eastern Cape with 15% and North West 13% of jobs created,” the Minister said.
Black participation, community development to be prioritised
The Minister said it is anticipated that black participation is anticipated to increase not only at ownership level, but at operational level, and added that the construction and operation of the projects will eventually lead to the creation of black industrialists.
“The Renewable Energy Programme is embracing local community development as well as socio-economic and enterprise development.
“Local community shareholding (equity share) in the 27 projects amounts to 7.1% (or R1.6 billion). The local community shareholders for the 27 projects will receive R5.9 billion net dividends over the 20 year lifetime of the projects. This will have a substantial positive impact on the living standard of the communities around these projects. Communities through Community Trusts have full control over how the money will be spent in their areas,” he said.
The Minister also said the IPPs will enable local communities to further benefit directly from the investments attracted to the areas through the R9.8 billion to be spent on socio-economic development initiatives and R3.4 billion to enterprise development over the 20 year lifetime of the project agreements.
“As part of the bid obligations, the Bid Window 3.5 and 4 Preferred Bidders have made commitments in five categories, namely, education and skills development, social welfare, healthcare, general administration and enterprise development. The majority of the money will be spent in these local communities around the projects and will involve women-owned small businesses. It will also ensure youth participation and development, whether through skills transfer and training, bursaries and/or the establishment of small businesses,” he said.
Minister instructs IPP office to sign outstanding Small Producer Programme agreements
The Minister said, meanwhile, that he has requested the IPP office to engage in the preparations to finalise all outstanding requirements for the signing of the 20 projects under the Small Renewable Programme [projects between 1MW and 5 MW], which will have a substantial impact on a different market segment and contribute to creation of small businesses.
“This will immediately ensure a R2.7 billion investment in this part of the economy.
“To be noted is that our Development Finance Institution, the DBSA and the German Development Finance Institution KfW, have established access to affordable funds in support of the participation of small businesses in the green economy and therefore the Small Renewable Energy programme. We want to thank them for working with the Government and for their willingness in growing this very important market.”
The Minister also said that he has requested the IPP Office to ensure a more equal distribution of the benefits to the communities specifically the distribution of the dividends by analysing and creating a better and more efficient structure for this purpose.
“To sign the two projects under Coal IPP Programme as well as the 19 projects procured under the Renewable Energy Expedited Bid Window, which will be announced in due course.
“Together this will achieve a further R103 billion of investment in the economy with substantial foreign direct investment.