Supplementary Budget 2020

IPPs on track despite Eskom freeze, says Nene

iStock

Cape Town – The fourth bid window for independent power producers (IPPs) is on track despite Eskom’s announcement that it has stopped issuing budget quotes, according to Finance Minister Nhlanhla Nene.

Speaking to media ahead of his mini budget speech, Nene said there is no indication that the bid window cannot proceed and that government is well on track with IPPs.

Eskom put a halt to the process this month with the non-issuance of budget quotes for the programme, which Eskom CEO Brian Molefe said was a temporary measure, adding that "very soon a lasting solution will be found to address this matter”.

The issue has clearly not escalated to departmental level, because Nene said he will address any issues once they are brought to his attention.

Eskom said in a statement this week that it fully supports the Department of Energy’s Renewable Energy IPP Procurement Programme (RE-IPPP) and acknowledges that IPPs must play a part in the South African electricity market.

As of October 2015, 92 projects had been selected as part of the RE-IPPP, which add up to R193bn in private sector investment and will add 6 327 MW of capacity to the national electricity grid, Treasury said.

Molefe said that the decision to temporarily halt the issuance of budget quotes was taken to protect the financial sustainability of Eskom due to the fact that no capital allocation was provided for in the current multi-year pricing regime for IPPs beyond Bid Window 3.

“In essence, Eskom’s current financial plan cannot support any new IPP connections as well as energy purchases,” he said.

“While we acknowledge the discomfort that this decision will have on the IPP procurement programme, let me assure you that Eskom is currently engaging with all the relevant stakeholders to resolve this matter as soon as possible,” said Molefe.

ZAR/USD
16.77
(-0.09)
ZAR/GBP
21.15
(-0.12)
ZAR/EUR
18.95
(-0.11)
ZAR/AUD
11.66
(-0.17)
ZAR/JPY
0.16
(-0.09)
Gold
1798.22
(+0.06)
Silver
18.69
(+0.13)
Platinum
824.50
(+0.30)
Brent Crude
43.14
(+2.10)
Palladium
1961.36
(+0.61)
All Share
55417.89
(-0.66)
Top 40
51154.08
(-0.74)
Financial 15
10472.31
(+1.28)
Industrial 25
76134.69
(-1.67)
Resource 10
52483.78
(-0.20)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1936 votes
I am taking a hit, but should be able to recover in the next year
23% - 2541 votes
My finances have been devastated
35% - 3790 votes
It's still too early to know what the full effect will be
25% - 2718 votes
Vote