The current owners of the Kelvin power station, situated east of Johannesburg, report that they have been “greatly encouraged” by the level of interest shown in the sale process, which was initiated last year, and add that they are confident of receiving “attractive bids”.

Investec and Nedbank, which describe themselves as temporary custodians of Kelvin Power, currently own the coal-fired plant, which was previously developed and operated by the City of Johannesburg (CoJ).

At the time of acquiring equity in the plant in 2013, an undertaking was made to the Competition Commission that the plant would be transferred to a suitable owner with the skills and expertise to operate it.

Kelvin Power could not be drawn on the number of expressions of interest received by the January 16 deadline, explaining that the competitive nature of the process meant it was “not at liberty to disclose the information”.

The number of prospective bidders invited to submit nonbinding offers was also not disclosed, but Kelvin Power expressed optimism that the disposal process should be “substantively completed” by May 30.

In terms of the proposed timelines, shortlisted bidders should be identified by the end of February and these bidders would have until April 2 to make binding offers, with a preferred bidder to be identified by mid-April.

In light of South Africa’s current electricity shortages, both the CoJ and the Gauteng provincial government have expressed a desire for higher levels of output from existing municipal facilities, as well as from independent power producers.

However, it is unclear whether raising Kelvin’s capacity will be a key evaluation criterion, with Kelvin Power saying only that it is in “constant liaison and cooperation with the city as a party that has a significant interest in the outcome of this process”. Kelvin has a power purchase agreement in place with the CoJ, which has an envisaged end date of 2021.

“Kelvin offers opportunities for redevelopment backup to its original nameplate capacity of 600 MW. Currently, it operates at levels below that, as you would expect from plant commissioned several decades ago,” Kelvin Power told Engineering News in response to questions.