Mantashe, De Ruyter sign off on 3 emergency power projects

Last year, the department gazetted new regulations to procure close to 12 000 megawatts of power from independent power producers. 

The highly contentious IPP projects comes as a bid by the government to meet the country’s growing power demands, especially amid Eskom’s electricity woes. 

On Monday,  Minister Gwede Mantashe was joined by Eskom CEO Andre de Ruyter and Scatec CEO Terje Pilskog to sign three of the 11 project agreements.

All three of the Scatec IPP projects, based in the Northern Cape, will have until early August to finalise the conditions required for financial close, before construction begins.

The projects are then expected to take between 12 and 18 months to complete before they are ready to contribute to the grid.

Mantashe described the signing of the projects as a landmark development.

“This occasion is taking place against the backdrop of electricity interruption, that is load shedding, which impacts on the economy and the livelihoods of our people. 

“In terms of the burning platform, what we have decided to do as the Cabinet is to shorten processes, accelerate the question of energy getting into the grid and contribute to the solution of the load shedding problem.”

Mantashe vowed to cut the red tape for independent producers.

“On the part of the generators, we think the process of building generators must also be reviewed. When you have load shedding, you only realise seriously that 18 months is actually a long period. It must be shortened,” said Mantashe.

Eskom’s De Ruyter agreed the projects would be a catalyst for economic growth.

“With the projects we are signing today, it might be interesting to know that we have thus far contracted for 7309 MW of capacity from IPPs to date so there’s a very vibrant market for private power producers in South Africa and I’m sure that if we look at the announcements that have come from the department in terms of further Bid Windows that that market is going to further grow and become increasingly important to address the shortfall in generation capacity.”

Addressing concerns about procurement irregularities, De Ruyter assured measures would be in place to guard against fraud and corruption.

He believes the anti-bribery and corruption clause added to the agreements will be key.

“Eskom’s recent history has been categorised by capture and corruption and we have therefore taken a firm stance on this and we are able to give the South African public the assurance that these agreements have been done with the strictest standards of public governance ethics,” De Ruyter added.

The other 8 projects are believed to be facing some challenges, stalling the signing of agreements. 

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