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Signing of first project REIPPPP bid window 5 agreements

Home Infrastructure Energy – Power Generation Signing of first project REIPPPP bid window 5 agreements

The Minister of Mineral Resources and Energy, Gwede Mantashe (MP) announced the first three projects to sign project agreements under the 5th Bid Window of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP Bid Window 5) on Thursday, 22 September 2022.

Minister Mantashe lauded EDF Renewables for taking up the challenge to invest in the three wind power projects that are going to contribute 420MW renewable capacity to the national grid. “Congratulations and we must not put pressure on you to put energy on the grid in two months, it is not going to happen. We must accept that you are going to build the facilities and give us that energy in the medium to long- term”, said the Minister.

The Minister emphasised that the Department committed in IRP 2019 to increase renewables by 18% and reduce coal by 15%.

The signing took place at the IPP Offices in Centurion. The Department further outlined the way forward with concluding the signing of the remaining 22 projects procured under the REIPPPP Bid Window 5 in October 2022.

Tshifhiwa Magoro, CEO of EDF Renewables, highlighted that the 3 EDF Renewables projects are all procured from onshore wind technologies and will contribute a total of 420MW of renewable capacity to the national grid. These projects are Coleskop Wind Power 140MW; San Kraal Wind Power 140MW; and Phezukomoya Wind Power 140MW.

The Coleskop project is located close to the town of Middleburg in the Eastern Cape Province, while both the San Kraal and Phezukomoya wind projects are located close to the town of Noupoort in the Northern Cape.

Once these projects have reached financial close, the construction timeline is expected to be 24 months and the new generation capacity should be online by the end of 2024.

EDP Renewables will develop the projects in partnership with local shareholders. The total investment amount for the projects is approximately R 11 billion, of which R 7.8 billion is debt finance. EDF Renewables is a leading global player in renewable energies, with gross installed capacity of 13.8 GW worldwide. Its development is mainly focused on wind and solar photovoltaic power. Currently EDF Renewables operates mostly in Europe and North America but is continuing to grow by moving into emerging regions such as Brazil, China, India, South Africa and the Middle East. The company has strong positions in offshore wind power, but also in other areas of the renewable energies industry such as energy storage.

As with other IPP procurement, this bid window was also designed to stimulate economic growth and support socio-economic transformation throughout the full value chain. In this respect, together the three projects will create a total number of 2 230 job opportunities and an amount of R 543 million is dedicated to be spent on Skills Development, Supplier Development, Enterprise Development, and Socio-Economic Development.

The Department and IPP Office are currently engaging with the remaining 22 Preferred Bidders under REIPPPP Bid Window 5 with a view to finalising the conditions precedent to enable the signing of the Project Agreements.

A number of bidders who have recently received their Budget Quotations will be scheduled for signing of agreements once these have been finalised. Announcements around this will be made shortly. Some bidders have challenges around their issued BQs that have to be resolved first before their legal agreements can be finalised.

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