Industrial Development Corporation (IDC) CEO Geoffrey Qhena last week expressed his confidence that projects that had been adjudicated under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) would proceed, despite the recent resistance shown by Eskom to signing a power purchase agreement (PPA) for a Northern Cape-based concentrated solar power (CSP) plant.

Speaking at the release of group annual results, Qhena noted that the IDC had approved R360-million for Pele Green Energy to support its participation in the 100 MW Redstone CSP project, which is being developed together with Acwa Power, of Saudi Arabia, and Solar Reserve, of the US.

Pele Green Energy is a 100% black-youth-owned energy development company, which told Engineering News recently that it was making strides in its stated objective of evolving from an energy investor into a fully fledged independent power producer.

Eskom was, however, insisting on a meeting with Energy Minister Tina Joemat-Pettersson before signing the 20-year PPA, citing concerns over its cost, which, it argued, could lead to allegations of “wasteful expenditure”.

The legality of Eskom’s resistance has been questioned and it is also in conflict with Cabinet’s recent statement that it has no intention of pulling back from the REIPPPP, which has facilitated nearly R200-billion worth of investment in South Africa’s electricity sector since 2011.

Qhena argued that it was government, not Eskom, that set policy and that the IDC was, thus, taking guidance on its renewable-energy investments from the Department of Energy and the National Treasury. He said he was confident that the “investments will be honoured”.

The IDC is a major investor in the South African renewable-energy sector, having supported projects that are expected to add nearly 1 500 MW to the grid. In 2016, it also approved R6.1-billion for REIPPPP-related projects, which were yet to be approved or to reach financial close.

Eskom chairperson Ben Ngubane recently wrote to Joemat-Pettersson indicating that Eskom was unwilling, in the absence of further consultations, to sign PPAs with independent power producers beyond the preferred projects selected under bid widow 4.5 of the REIPPPP.

However, the Redstone project had been approved during a previous bid window, bringing into question whether Eskom would indeed conclude PPAs for projects up to and including bid window 4.5. It has also raised serious questions about the future of the so-called expedited-round projects and the two coal baseload projects, which have also been adjudicated, but not yet approved.

Interestingly, Eskom CEO Brian Molefe is also an IDC board member.