IPP tender goes ahead to ‘bolster’ Eskom

IPP tender goes ahead to 'bolster' Eskom
CASH COW: The controversial IPP tender will soon go ahead after the ANC approved it. PICTURE BY TechCentral

The deal, which will see Eskom buying certain megawatts from private companies, is a subject of criticism in the country as critics say it seeks to privatise Eskom.

South Africa is going ahead with its controversial independent power producers (IPP) program that will see Eskom buying electricity from private energy producers.

Last year President Cyril Ramaphosa announced that currently the power generation in the country “is severely constrained”, which requires government to step up and opt for these projects.

It is still not clear how much the taxpayer will pay for this deal but it consists of 28 companies who will supply 2000 megawatts.

The tender is called the ‘Risk Mitigation Independent Power Producer Procurement Programme’ and was opened to public for bidders to make presentations and apply.

28 companies successfully applied and the deal is expected to be concluded by February 2021, the IPP Office has confirmed with Engineering News.

The preferred bidders will be announced as soon as mining minister Gwede Mantashe receives the recommendations from the “evaluation team”.

When Ramaphosa took over in February 2018 following the forced resignation of President Jacob Zuma on 14 February, the IPP was announced by then mining minister Jeff Radebe and was criticised as part of ways to privatise Eskom and ensure it belongs to the Motsepe family, which comprises of Portia Motsepe who is billionaire Patrice Motsepe’s sister and the wife of Ramaphosa as well as Bridget Motsepe who is Radebe’s wife and Motsepe’s other sister.

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The deal is called an “emergency procurement” program.

Bidders promise to invest R40 billion in the deal.

Ramaphosa announced during the ANC’s Lekgotla on 24 January 2021 that they had agreed as ANC and government that “we should pursue several measures”.

He said this will include the “procurement of new generation sources” in line with the 2019 Integrated Resource Plan.

The plan wants government to procure “distributed generation up to and including 2022, and thereafter, procurement would be capped at 500MW per year up to 2030”. 

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The IPP Office told Engineering News the request for proposals “for the 5th bid window of the Renewable Energy Independent Power Producer Procurement Programme will be released in the first quarter of this year as announced by the [mining] department”.

Accepted bidders are expected to begin full work by June 2022, “be between 50 MW and 450 MW in size and be fully dispatchable between 5:00 in the morning and 21:30 at night”.

“The evaluation will commence once all preparatory work has been concluded, including the appointment of transaction advisers,” the IPP Office in Gauteng said.

The evaluation team consists of lawyers, accountants, technicians, economist, etc.

Some projects will be ready before June 2022, the Office said. 

The Office said the aims of evaluating the bidders doing the bid evaluation “is to determine compliance by the bidders with the qualification criteria… and to select preferred bidders based on the most competitive price and economic development commitments”.

“An independent governance team consisting of governance advisers will monitor the entire evaluation process to ensure compliance with the policy and legislative requirements in relation to this procurement process,” it said.

(edited by MLM)

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