SA’s emergency power process nears another deadline

A revised target for the projects to reach financial close by the end of this month remains in place and any changes to deadlines will be publicly communicated, the department said.
Image: Mikael Sjoberg/Bloomberg

South Africa has made faltering progress toward implementing plans announced more than two years ago to procure additional power needed to swiftly address crippling energy shortages.

The Department of Mineral Resources and Energy first issued a request for information from potential electricity suppliers in December 2019. A year later it listed 28 interested bidders, and in 2021 it chose the winners of contracts to generate about 2 000 megawatts of capacity under its so-called Risk Mitigation Independent Power Producer Program.

The projects were supposed to reach financial close in July and the new plants were expected to be on line within 18 months. But a lawsuit filed by a losing bidder along with environmental challenges held up the winners’ plans to secure financing, and the country experienced record power shortages last year as state-owned utility Eskom struggled to meet demand.

A revised target for the projects to reach financial close by the end of this month remains in place and any changes to deadlines will be publicly communicated, the department said in reply to emailed questions on Wednesday.

Karpowership, a Turkish supplier of ship-mounted gas-power plants, won the bulk of the emergency supply tender. The rest were dominated by solar power and included groups in which Scatec ASA, Electricite de France SA and TotalEnergies SE hold stakes.

Separate longer-term plans to increase the amount of renewable power from independent producers are also being implemented, with the energy department picking 25 projects in late October that are supposed to reach financial close within six months. It previously said an additional round of projects would be released no later than the end of this month, but it hasn’t indicated whether that plan is still on track.

© 2022 Bloomberg

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