Photo by: Bloomberg
If all goes according to plan, South Africa may be ready to issue a request for proposals (RFP’s) for its planned nuclear energy build programme by month’s end, energy department director-general Thabane Zulu said on Wednesday.
Briefing Parliament’s portfolio committee on public enterprises, Zulu said negotiations to finalise government’s procurement strategy were continuing with National Treasury ahead of the issuing of the RFP’s.
“We want to make sure that the process plan is effective and properly implemented so that is our target date but that will be determined by the current engagements…,” he told reporters on the sidelines of the meeting.
“The request for proposals is in line with the decision of cabinet that was taken on the 9th of December, 2015 for the nuclear build programme and to test the market in terms of the state of readiness for our country, our current existing institutions, and also the development of a funding model thereafter, which will still have to go to cabinet for approval.”
South Africa is planning to add 9.6 GW of nuclear power to the electricity grid.
Exactly how long the RFP process would last, would be determined by the talks between treasury and the energy department.
Zulu said based on the information contained in the proposals they expect to receive in the coming months, cabinet would have to decide which options are the most cost-effective.
“What we are doing here is not a tender, but based on what we have received, based on how the markets would have responded, based on what will be the funding model out of what you have received, you’ll then be able to go back to cabinet and say…for this government to do it in a cost-effective manner, this is the route you may take.”
Zulu said the issuing of the RFPs was also aimed at “raising the appetite” of the markets.
“In so doing, you also attract different financial institutions that exist globally that might have an interest to bank your project if it’s a bankable project,” he said.
“You don’t want to make this just a government thing. It’s a commercial project. Some of the people that have done analysis… will tell you that from the different studies that have been done this has been defined as a bankable project.”
Depending on the level of appetite for investment in South Africa’s nuclear build programme, government, and ultimately taxpayers, may not have to fork out a cent, Zulu said.
“All you need is a guarantor that the State has an interest in this project and once you have a guarantor that becomes your way to protect the taxpayers, to protect the project and the people who are responsible for the implementation.”