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CAPE TOWN - Failure to set higher empowerment targets for engineering, procurement and construction (EPC) in the renewable energy procurement programme is a missed opportunity in the advancement of transformation in the local energy industry, Lelo Mdhladhla of electricity trader PowerX said on Friday.

The Renewable Energy Independent Power Producer Procurement (Reippp) Programme has been lauded for attracting billions of rand into South Africa and changing the landscape of the South African electricity supply industry. But Mdhladhla said the transformation targets in the programme - which has been running since 2011 - were watered down.

“Black ownership requirement in the EPC is only 20 percent. The EPC is where the technical know-how sits, and that is where there should be more focus. That is where the Reippp has missed an opportunity to advance transformation. These companies are installing these technologies and we are not getting any of the technical know-how,” he said.

Mdhladhla questioned the renewable energy industry’s commitment to advance technical upskilling. “In the Reippp programme you invite companies to come and invest in the country, you give them majority stake in the assets. These assets will operate for 20 years and the foreign companies will leave after that. We will be stuck with an asset that we cannot repurpose and we will not have the skills. Why? Because the bulk of the ownership in these projects is passive ownership.

It is passive ownership because there is a reluctance among the EPC partners and foreign companies to transfer the skills and technical know-how to the local black shareholders. At the end of the 20- year power supply agreements these projects will be stranded assets. And we will not have the skills to replicate the programme,” he said.

Mdhladhla said the entire energy industry was lagging in terms of transformation.

-BUSINESS REPORT