Apr 06, 2012
Construction group homes in on SA’s renewables prospectsBack
Construction|Engineering|Nelson Mandela Bay|Africa|Basil Read|First Solar|MetroWind|Mining|Old Mutual|PROJECT|Projects|Renewable Energy|Renewable-Energy|TWP|Water|Africa|South Africa|Energy|Power Producers|Renewable-energy Capacity|Services|Eastern Cape|Mandela Bay|Digby Glover|Ian Curry|Infrastructure|Marius Heyns|Power|Water|Eastern Cape
© Reuse this
The South African government is in the process of procuring 3 725 MW of renew- ables capacity from IPPs, with some 2 309 MW still available for allocation after 28 preferred bidders, collectively representing 1 416 MW of potential capacity, were named in December.
A Basil Read-linked consortium, known as Metrowind, was included among the initial preferred bidders and the project had partici- pated in the National Energy Regulator of South Africa’s recent licensing hearings.
Basil Read had also acquired a 35% interest in Metrowind for R10-million and would be an equity participant in the project.
CEO Marius Heyns said work was well advanced to ensure that the 26 MW project, which was being supported by Old Mutual, reached financial closure by June, which would enable construction to begin during the second half of 2012. The wind farm would be developed in the Nelson Mandela Bay metropolitan area, of the Eastern Cape.
But he also confirmed that the group’s nascent energy unit had submitted a second bid, in conjunction with the BW Energy Corpo- ration, for a 60 MW solar PV development in Beaufort West.
Should the bid prevail, some 760 000 panels, supplied by First Solar, would be installed. Here too, the company had taken a 26% equity stake.
Basil Read Energy’s Ian Curry told Engin- eering News the company had decided to concentrate on a single bid during each round to raise the group’s prospects of success.
However, Basil Read might become even more “adventurous” during the third round, when the price and localisation thresholds were also likely to be increased.
Curry confirmed that the consortium had sharpened its pencil during the second round in order to improve on the price caps set for bidders. Tariffs for wind projects had been capped at below 115c/kWh and at 285c/kWh for solar PV and concentrating solar power. A cap of 107c/kWh had been set for biomass, 80c/kWh for biogas, 60c/kWh for landfill gas and 103c/kWh for mini hydro.
The focus currently was to move the Metrowind project to financial closure so that construction could start from July.
The wind development should result in engineering, procurement and construction workflow of R450-million for the group, while the solar PV projects could yield a R1.5-billion construction contract.
Heyns said that renewable energy was already featuring in the group’s R14-billion order book and was also a key feature in a project pipeline involving projects worth R18-billion.
Energy was also a key pillar in the diversification of Basil Read’s professional services unit, TWP, which had hitherto concentrated primarily on mining.
TWP CEO Digby Glover said energy had been integrated into Basil Read Matomo and was expected to be a material contributor to the unit’s revenue and earnings growth in the coming years.
Besides energy, Heyns expected the group would eventually benefit from South Africa’s R845-billion infrastructure programme. However, he stressed that the group was only expecting a construction sector recovery from 2013.
“There has been a slowdown in infrastructure projects. But, I must say, I feel very positive . . . and it’s clear that a lot of work is going to come out,” Heyns said, indicating that the potential projects spanned the water, transport, energy and town planning milieus.
Nevertheless, the immediate horizon remained challenging, as had been the case during 2011, when operating profit decreased by 24% to R280.9-million, margins fell from 6.9% to 4.5% and headline earnings declined 33.3% to R172.9-million.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Other News This Week News
Updated 2 hours 31 minutes ago Ousted Congress of South African Trade Unions general secretary Zwelinzima Vavi is adamant that his expulsion from the trade union federation was unfair and illegal. "I am... in consultations on whether or not I should challenge my extremely irregular, illegal and...
Updated 2 hours 32 minutes ago JSE-listed industrial conglomerate Ansys has raised R17.2-million through the issue of 42.4-million ordinary shares to partly fund the acquisition of Parsec Holdings and for working capital requirements. In November, the company entered into a R93.2-million...
Updated 3 hours ago A new tool that provides municipalities with a prewritten tender and contract, which can easily be adapted to suit the specific needs and circumstances of a particular region, is now available and is expected to help municipalities curb water losses. The Model...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Projected capital expenditure (capex) in the South African automotive assembly industry should reach a record R7.48-billion this year, says the National Association of Automobile Manufacturers of South Africa (Naamsa) in its 2014 fourth quarter business review. Capex...
After several years of navigating project-threatening red tape and currency fluctuations, the 4.4 MW Bronkhorstspruit biogas power plant, which will supply clean energy to a leading automotive manufacturer in Gauteng, is expected to enter production before June....
South African paper and pulp producer Sappi reported earlier this month that it would build a pilot plant for the production of low-cost Cellulose NanoFibrils, or CNF (nanocellulose) at the Brightlands Chemelot Campus in Sittard-Geleen in the Netherlands.
The long-term outlook for Nigeria is a country that has the potential to be very strong. So affirmed International Monetary Fund (IMF) Nigeria Mission Chief and Senior Resident Representative Dr Gene Leon on recently. "But we are starting from a point of huge...
Poor infrastructure planning and inadequate maintenance are becoming increasingly problematic for new developments and the associated infrastructure required to support such developments. In many urban and rural municipalities, the state of infrastructure has been...