Mineral Resources and Energy Minister Gwede Mantashe yesterday announced eight projects that are expected to inject R45 billion of private sector investment into the economy. Photographer: Phando Jikelo / African News Agency (ANA)
Mineral Resources and Energy Minister Gwede Mantashe yesterday announced eight projects that are expected to inject R45 billion of private sector investment into the economy. Photographer: Phando Jikelo / African News Agency (ANA)

Mantashe announces eight investment projects to inject R45bn into economy

By Dineo Faku Time of article published Mar 19, 2021

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JOHANNESBURG - MINERAL Resources and Energy Minister Gwede Mantashe yesterday unveiled the preferred bidders for generating 2 000 megawatts (MW) of emergency power procurement, including naming the eight projects that are expected to inject R45 billion of private sector investment into the economy.

Mantashe said the evaluation process had resulted in the selection of eight preferred bids totalling 1 845MW and a further three eligible bids totalling 150MW.

The successful bidders were chosen from 28 bid responses with a potential contract capacity of 5 117MW.

The preferred bidders are ACWA Power Project DAO, Karpowership SA Coega, Karpowership Saldanha Bay, Karpowership Richards Bay, Mulilo Total Coega, Mulilo Total Hydra Storage, Oya Energy Hybrid Facility, and Umoyilanga Energy.

Mantashe said the eight projects were expected to inject R45 billion in total private sector investment to the economy, with an average local content of 50 percent during the construction period. South African entity participation from these projects is 51 percent with black ownership at 41 percent.

“This is important because when we release these bids, there is going to be talk that we are again favouring white monopoly capital and it is important to emphasise that the South African entity participation from these projects is 51 percent with black ownership at 41 percent,” said Mantashe.

In terms of job creation, Mantashe said that 3 800 job opportunities would be created during the 18 month construction period, and a further 13 500 during the 20-year power purchase agreement term.

Mantashe said the three eligible bids were subject to value for money proposition in line with the provisions in the request for proposal.

“It is important to note that the three bidders are within the 2 000 MW capacity threshold in terms of evaluation rankings, but their announcement will only be made following value for money propositions,” said Manatashe.

The solutions provided by the bidders were from a combination of a range of technologies including Solar PV, wind, liquified natural gas and battery storage.

The bidders are expected to reach financial close by no later than the end of July due to the urgency to bring power online the date was non negotiable. It is envisaged that first power from these projects will be connected to the grid from August 2022.

Mantashe announced the first bidding round in response to the Section 34 Determination to pave the way for the procurement of 11 813MW of new electricity from a range of technologies in line with the 2019 Integrated Resource Plan (IRP).

He said the Request for Proposal for the procurement of 2 600MW under the Renewable Energy IPP Procurement Programme Bid Window 5, were released at midnight last night. Of the 2 600MW from this Bid Window 5 1 600 would be from wind and 1 000MW from Solar PV.

“Given the energy challenges that we are facing the objective is to get these projects connected to the grid as soon as possible,” said Mantashe.

Government expects to release four more requests for proposals within the next 12 months including 2 600MW from renewable energy, 3 000MW from gas, 1 500MW from coal, and 513MW from battery storage.

Mantashe said a concerted effort to ensure that the IPP Procurement Programmes steamed ahead to deliver secure energy supply from a diverse range of energy sources, in line with the IRP 2019, was at the core of government’s work.

“Collectively, our interventions give effect to the fourth priority intervention of the Economic Reconstruction and Recovery Plan, that is, to rapidly expand our country’s energy generation capacity,” said Mantashe.

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