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Oct 09, 2012

Progress on first SA renewables projects needed to re-establish momentum – Spanish industry body

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Engineering|Africa|Eskom|PROJECT|Projects|Renewable Energy|Renewable-Energy|Southern Africa Renewable Energies Consortium|Africa|South Africa|Energy|Energy Project Developers|Juan Laso Rodriguez|Power|Southern Africa
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Spanish renewable-energy project developers and suppliers are eagerly awaiting news regarding the finalisation of the first 28 projects that were identified as preferred bidders in December under South Africa's Renewable Energy Independent Power Producer Programme (REIPPP).

Spain and Southern Africa Renewable Energies Consortium president Juan Laso Rodriguez told Engineering News Online on the sidelines of the 'South Africa-Spain Business Meeting' on Tuesday that the delays were understandable. But it was now critical for the first projects to reach closure soon to sustain REIPPP's momentum and credibility.

The fact that the first projects did not close in June as initially scheduled was resulting in additional costs for developers and raising risks for suppliers.

However, Rodriguez stressed that the momentum could be more than rebuilt if the delays to the first two rounds led to a vastly improved and expanded third bidding round, which had been pushed back until May next year. In the second bidding round a further 19 projects were named as preferred bidders.

Re-establishing momentum, he stressed, was important to sustaining investor interest at a time when other large renewables programmes were emerging in other jurisdictions.

The Department of Energy indicated that the outstanding guarantees needed to support Eskom's balance sheet had been approved on October 5 and that the signing of power purchase and implementation agreements should proceed in late October, or early November. It also indicated the allocation to renewables projects would be increased and the procurement process extended to 2020.

Rodriguez stressed that the REIPPP was still perceived positively by Spanish companies, which believed the competitive bidding processes could increasingly emerge as the preferred procurement mechanism in other parts of the world.

The programme's localisation, black-empowerment and community development had not lowered the appetite of Spanish companies, which generally prided themselves on their ability to partner with local enterprises.

The consortium, which was supported directly by member companies and morally by the Spanish government, was also pleased with the success rate of Spanish developers and component suppliers in the first two rounds.

Rodriguez said Spanish companies were represented both as developers and suppliers and that other companies planned to participate in the upcoming third bid window.

Edited by: Creamer Media Reporter
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