The Department of Energy has announced the postponement of the closing of the third window of bid submissions for the Renewable Energy Independent Power Producer Programme (REIPPP). The closure, which should have taken place at the start of October this year, will now take place on May 7, 2013.

In this programme, the country plans to procure 3 725 MW of renewable energy from private or independent producers that will be added to the main grid or energy supply by the next four-odd years. According to the Integrated Resource Plan of 2010, around 42% of all electricity generated in the country must be from renewable sources.

The postponement is due to the financial close processes for the first and second windows which is currently underway. This process has been delayed. The first window was expected to reach financial close by the end of June.

To date the department has announced 28 preferred bidders in Window 1 and 19 preferred bidders in Window 2. The preferred bidder’s status is subject to obtaining a licence from the National Energy Regulator of South Africa, water usage authorisation from the Department of Water Affairs, connection agreement from the network provider (Eskom or Municipality) and any other approval as may be required for financial closure.

Among other agreements, the department would be expected to sign an Implementation Agreement with each preferred bidder while power parastatal Eskom would sign the Power Purchase Agreement.

It is expected that each implementation agreement will be customised to be in line with the commitments made by the bidder, which in turn will ensure that the commitments made by the bidder are met. The commitments among others include job creation, social development, local content and preferential procurement among others.

Further benefits relate to communities close to each project with each holding a stake of up to 5% per project via community trusts which are 100% funded by the Development Bank of Southern Africa (DBSA), Industrial Development Corporation (IDC) and/or the Public Investment Corporation (PIC) whilst some will be classified as free carry.

The department has gone to great lengths to ensure that all the necessary documentation reflects what was submitted by the bidders and are ready for financial close.

According to the department, “Given the limited resources, it is imperative for the Department to give more attention to financial close for Windows 1 and 2. Having considered the various representations regarding the current Window 3 bid submission date, the Department has decided to postpone the 3rd bid submission date from 1 October 2012 to 7 May 2013.”

Source: sanews.gov.za