Name of the Project
Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).

Location
South Africa.

Project Owner/s
Department of Mineral Resources and Energy (DMRE).

Project Description
The RMIPPPP, also known as the ‘emergency’ procurement round, is a response to the short-term electricity supply gap identified in the Integrated Resource Plan 2019.

The objective of the RMIPPPP is to not only alleviate the current electricity supply constraints but also reduce the use of diesel-based peaking electrical generators.

The programme aims to procure 2 000 MW from a range of energy sources and technologies.

The DMRE issued a request for proposal for the RMIPPPP in August 2020.

Mineral Resources and Energy Minister Gwede Mantashe released the names of the eight preferred bidders on March 18, 2021:

• the 150 MW ACWA Power Project DAO – a hybrid facility comprising solar photovoltaic (PV) and a battery energy storage system (BESS);
• a 450 MW Karpowership SA Coega facility – a gas-to-power plant based on imported liquefied natural gas (LNG);
• the 450 MW Karpowership SA Richards Bay facility – a gas-to-power plant based on imported LNG;
• a 320 MW Karpowership SA Saldanha facility – a gas-to-power plant based on imported LNG;
• the 198 MW Mulilo Total Coega facility – a hybrid plant employing solar PV and imported LNG;
• the 75 MW Mulilo Total hydra storage project – a hybrid facility comprising solar PV and a BESS;
• the 128 MW Oya Energy hybrid facility – a hybrid facility comprising solar PV, wind and a BESS; and
• the 75 MW Umoyilanga Energy – a hybrid facility comprising solar PV, wind and a BESS.

In June 2021, the DMRE announced the appointment of three additional preferred bidder projects following the completion of “value for money” negotiations with Norwegian renewables power producer Scatec.

The Scatec projects will comprise three hybrid plants with solar PV technology and BESSs, in the Northern Cape.

To meet the dispatchable profile demanded under the RMIPPPP, the three projects – Kenhardt 1, Kenhardt 2 and Kenhardt 3 – will together produce 540 MW solar and 225 MW/1 140 MWh battery storage, based on sites in the Northern Cape.

Scatec has indicated that the projects are the only ones selected under the RMIPPPP that rely exclusively on renewable energy, making the three-project portfolio arguably one of the biggest single-site solar-storage hybrids in the world.

The projects will include average local content of 50% during construction, South African entity participation of 51% and black ownership of 41%.

Potential Job Creation
Not stated.

Capital Expenditure
The combined investment value of the eight projects is estimated at R45-billion.

Planned Start/End Date
The initial eight projects were expected to reach financial close by no later than the end of July 2021 and be connected to the grid from August 2022.

Latest Developments
The Portfolio Committee on Mineral Resources and Energy has rescinded a decision taken in 2021 to conduct an inquiry into allegations of corruption and malfeasance during the process to appoint preferred bidders in RMIPPPP.

This resolution was taken following legal opinion from the Parliament Legal Service Division, which referred to a High Court judgment that dismissed, with costs, an application to set aside the DMRE's decision to appoint preferred bidders for the RMIPPPP.

The committee voted in August last year to launch a probe into the RMIPPPP. The inquiry's terms of reference were agreed on in December. 

The inquiry was set to probe problems pertaining to the programme as well as allegations surrounding the awarding of a R22-billion contract to Turkish-led consortium Karpowership SA, which faced subsequent litigation. 

Rival bidder DNG Energy had alleged that the procurement process that led to Karpowership being named biggest preferred bidder had been riddled with corruption. These allegations contributed to the committee initially voting to conduct its own probe. However, in late January this year, the North Gauteng High Court, in Pretoria, dismissed DNG's challenge, ruling that it had been excluded for not meeting procurement requirements. 

Six ANC committee members, including committee chair Sahlulele "Zet" Luzipo, voted to scrap the probe on March 8, to which two Democratic Alliance members objected.

The vote followed a briefing by Parliamentary legal advisor Andile Tetyana, who said a recent court ruling had found no evidence of wrongdoing in the RMIPPPP process. 

"The court has put the procurement process under a microscopic eye and came to a factual and legal finding that it was fair and transparent," Tetyana said.

He said that while there were no legal impediments to the committee continuing with its inquiry, there was no need to "reinvent the wheel". 

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
DMRE, Natie Shabangu, email natie.shabangu@dmre.gov.za; or Thandiwe Maimane, email thandiwe.maimane@dmre.gov.za.