Black-owned energy group says renewables programme is not anti-transformation

07 May 2018

Black-owned and managed independent power producer (IPP) Pele Green Energy(PGE), which is an active owner and partner in wind and solar projects with a combined capacity of 900 MW, does not agree with prevailing arguments that South Africa’s IPP programmes are failing to deliver on South Africa’s transformation objectives.

MD Gqi Raoleka says while more can always be done to further transformation, the procurement programmes overseen by the Department of Energy and the IPP Office are already structured to ensure that “capable, determined and ambitious black IPPs can exist and thrive”.

PGE is participating in five projects procured during bid windows 3.5 and 4 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which stalled in 2016 when Eskom refused to sign further power purchase agreements (PPAs) for renewables projects.  However, agreements for 27 renewable-energyprojects initially procured by the IPP Office in late 2015 were eventually signed on April 4.

PGE is participating in the 100 MW Copperton wind farm and the 100 MW Redstone concentrated solarpower plant, both located in the Northern Cape, as well as three 140 MW wind farms, two located in the Northern Cape and one in the Eastern Cape.

Raoleka argues that, at its core, the REIPPPP is structured to ensure participation by black industrialists, black investors and communities across all aspects of the power generation cycle, from investment through to the operations and maintenance of the plants.

“The rules of these programmes have been structured to fully support the country’s transformation objectives, with checks along the lifespan of our power purchase agreements to ensure the adherence to the commitments that each project has made,” Raoleka says.

Over the past nine years the REIPPPP has been the main vehicle through which PGE has been able to accumulate what is “one of the largest project portfolios of projects by any IPP, be it foreign, South African or black”.

Raoleka adds that bid window 3.5 and 4 also resulted in some of the highest levels of South African and black-equity ownership to have been achieved since the REIPPPP was launched in 2011.

Energy MinisterJeff Radebe has stated that South Africans own 57.8%, or R11.9-billion, of the companies awarded projects during the most recent bid windows, of which black shareholders own 64.2%, or R7.64-billion.

The 27 projects are scheduled to reach financial close by no later than July 31 and are expected to involve a combined investment of R56-billion.

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