Apr 06, 2012
Construction group homes in on SA’s renewables prospectsBack
Construction|Nelson Mandela Bay|Africa|Basil Read|Engineering|First Solar|Gas|MetroWind|Mining|Old Mutual|Power|PROJECT|Projects|Renewable Energy|Renewable-Energy|Solar|transport|TWP|Water|Africa|South Africa|Energy|Power Producers|Renewable-energy Capacity|Services|Eastern Cape|Mandela Bay|Digby Glover|Ian Curry|Infrastructure|Marius Heyns|Eastern Cape
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
Creamer Media Senior Deputy Editor
To subscribe email firstname.lastname@example.org or click here
To advertise email email@example.com or click here
Other News This Week News
Updated 2 hours 56 minutes ago The JSE-listed Emira Property Fund has invested over R250-million in acquiring new centres and upgrading its shopping centres to strengthen its retail assets, according to Emira CEO Geoff Jennett, who stated on Thursday that the company was investing strategically....
Updated 3 hours ago JSE-listed Equites Property Fund achieved an 18.3% year-on-year increase in distributions to 96.6c a share for the year ended February 29. “The distribution growth reflects the strong property fundamentals of the Equites logistics portfolio,” Equites CEO Andrea...
Updated 3 hours ago It takes a coherent company to successfully and sustainably close the gap between strategy and execution in Africa, and one of the key factors in doing so is unconventional leadership, which is needed to foster the behavior required of coherent companies, according...
Recent Research Reports
Energy Roundup – May 2016 (PDF Report)
The May 2016 roundup covers activities across South Africa for April 2016 and includes details of the National Energy Regulator of South Africa’s proposal to introduce a coal benchmark cost as part of its final decision on Eskom’s multiyear price determination...
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
This Week's Magazine
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
Daimler Trucks and Buses Southern Africa (DTBSA) saw a marked slip in new-vehicle sales in 2015 compared with 2014, with sales dropping from 5 897 units to 5 300 units. The decline came as the South African new truck and bus market declined from 31 558 units in 2014...
Group of 20 (G-20) economies threatened to penalise havens that don’t share information on their banking clients after the leak of the Panama Papers provoked a global uproar over tax evasion. The G-20 will consider “defensive measures” against financial centers and...