Challenges in assisting foreign contractors to understand the requirements of the South African Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), specifically with regard to the pass-through of risk and the ambit of force majeure, seem to have been successfully overcome through multiple rounds of the REIPPPP,” states law firm Norton Rose Fulbright South Africa (NRFSA) head of energy in Africa Matt Ash.

“However, the key issue and challenge in the energy sector remain the financing options available to sponsors and developers, given programme structure constraints and foreign exchange weaknesses,” he notes.

NRFSA is involved in the implementation of projects in round two of the REIPPPP, and in bringing concentrated solar power, photo-voltaic and wind power projects in round three to financial close.

Owing to these challenges, alternative financing possibilities for the energy sector will be discussed at the 2014 Africa Energy Indaba. The REIPPPP and its Power Producer and Power Purchase Agreement Forum will be included as an official workshop at the indaba, which will run from February 18 to 20, in Johannesburg.

Ash notes that, currently, the public and private sectors in South Africa are closely focused on renewable energy. “This has stimu-lated much greater public-sector interest in renewable energy throughout the sub-Saharan Africa region, with energy authorities in African countries beginning to develop renewable-energy programmes on a much larger scale,” he says.

Work in Other Regions

As part of its advisory process in the REIPPPP, NRFSA recently ran a workshop on multicontracting for developers, lenders and Engineering Procurement Construction contractors to discuss and debate the feasibility of split contracts in the REIPPPP.

NRFSA is also conducting bespoke workshops for lender clients on project bonds. Ash notes that, at the end of last month, the Norton Rose Fulbright Group presented an Energy Academy in Tanzania, designed to coincide with the Powering Africa Finance Options – Tanzania executive briefing. This, together with the Energy Academy, run in London in 2013, will form the basis for a similar academy to be conducted in South Africa later this year, he adds.

“Presently, given the need for energy procurement through sub-Saharan Africa, the outlook for the energy industry remains very positive. The key, however, will be translating interest into action,” he concludes.