Black women-owned company receives preferred bidder status

13th December 2013

By: Carina Borralho

  

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Black women-owned company DLO Energy Resources has succeeded in the third round of bidding under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) through its Longyuan Mulilo Maanhaarberg consortium and the Longyuan Mulilo De Aar 2 North Wind Facility Consortium.

The combined capacity of both projects is estimated to be 244 MW.  The DoE approved 17 projects with a deal value of around R33.8-billion in the third bidding round.  

DLO Energy Resources MD Linda Olagunju says the company is working towards financial close of the two projects.

The cut-off date for this is July 2014, which will be followed by a 24-month construction period. “Realistically, the projects will go on line in 2016,” she adds.

In recent announcements, 17 renewable projects have been appointed as preferred bidders under the third bidding round of the REIPPPP. The Department of Energy (DoE) sent letters of appointment as preferred bidders to the 17 successful bidders that submitted bid responses by the third bid submission deadline.

Olagunju says the renewable-energy sector is garnering this much attention because it is the first successful independent procurement programme under the democratic government.  She notes that, with electricity being a topical matter, owing to increase in demand and price hikes, the need for renewable energy has been pushed to the forefront.

“I have always been fascinated with the link between the lack of electricity and poverty especially in Africa, electricity plays a huge role in the development of any economy,” she says, adding that she wishes to be part of the reform that encourages South Africa to use its own available natural resources to address electricity deficits.

She adds that the local political outlook combined with influence from international countries using renewable energy has led to South Africa being more open to implement renewable-energy programmes.

Olagunju started her career as one of the country's few black female attorneys specialising in energy and, through the opportunity afforded by the DoE through the REIPPPP process, her company is part of two successful consortiums.

“It was never my intention for my company to only be an equity participant, and I always wanted to be involved in every aspect of development and operation of the projects.  It is important that we encourage black developers to participate in every aspect of these projects so that there can be skills transfer,” she explains.

Meanwhile, the future of renewable energy in South Africa is looking positive.  “South Africa has outdone itself with the implementation of the REIPPPP,” she says, adding that South Africa has proven its capabilities to the rest of the world.  The REIPPPP is one of the most sophisticated programmes in the world.

She adds that the future of renewable energy and the REIPPPP will continue to be a competitive one.  “The investors taking up these opportunities have changed in the third round. At the start of the programme there were private equity players, whereas currently we are seeing companies with stronger balance sheets financing these projects, which shows confidence in the programme.  Owing to the competitive bidding process, we are likely to see prices continue to decrease. We have also seen a lot more consolidation happening now, such as smaller players joining forces with bigger players.”

Opportunities in Africa

“The REIPPPP has acted as a catalyst for the development of similar programmes on the rest of the continent.  Namibia has, for example, released a request for qualification for three solar photovoltaic plants, which has attracted attention from foreign investors,” she says, adding that many people have noticed the success of the REIPPPP and are trying to replicate the programme in different countries in Africa. 

“Thus far, we are aware that three of Renewable Energy Forum South Africa Conference 2013 participating companies have been successful ¬– Mulilo Renewable Energy and renewable-energy suppliers Aurora and Mainstream,” she says. Other bid winners include energy suppliers Enel Green Power and Spanish multinational corporation Abengoa.

Approaching the Future

“The REIPPPP is like a well-oiled machine, which will help the companies involved to know what to expect in future bidding rounds,” she concludes.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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