SOUTH AFRICA SIGNS DEAL TO PRODUCE MORE ELECTRICITY

South Africa to generate more energy with US$4.6bn IPP deal

Minister of Energy in South Africa, Jeff Radebe have signed a US$4.6bn contract with 27 independent renewable energy power producers. This contract is to enable the generation of additional 2300 MW of electricity over the next five(5) years.

This agreement have had so much delays including a last-minute court challenge. So it is indeed a milestone following a long period of uncertainty.

According to the minister the new 27 projects is the biggest Independent Power Producers (IPP) procurement by the department. Mr. Radebe said government have no direct financial participation in any of the investments. The only exception is support for Eskom in the event of default by the buyer.

South Africans will hold a majority 57.8% share in the project companies. While on the other hand Public Investment Corporation and other institutions will control the balance.

Completion of these renewable energy mix will certainly help to reduce cost of electricity.  Although the National Union of Mineworkers of South Africa (Numsa) have a contrary view. Last month they made an attempt to block the partnership by approaching the North Gauteng High Court.

Lowered prices of this renewable energy projects will be extremely beneficial to poor households of the country. The projects will be shared as follows:

The Northern Cape will receive 15 new wind, solar PV, and CSP projects. Eastern Cape will have Four new wind farms and the North West will also get four solar plants.