Cape Town – Government has affirmed its commitment to renewable energy by announcing the signing of the 27 outstanding renewable energy independent power producer projects (REIPPP).
Energy Minister Jeff Radebe made the announcement at Parliament on Thursday.
The projects will be signed on March 13 2018 and has the full support of the President and Cabinet, as well as Eskom.
Eskom previously had delayed the signing of REIPPPs due to financial concerns. In February former public enterprises minister Lynne Brown gave Eskom the green light to sign the agreements.
Earlier this week the department of energy’s (DoE) director general, Thabane Zulu, told the oversight committee that the issues in the delay would be dealt with.
At the briefing Radebe said that the signing demonstrates government’s commitment to renewable energy and to partner with the private sector. “A partnership with the private sector, labour and civil society, where we support each other in different roles, is of a really great benefit to our economy,” he said.
The 27 projects will create over 61 600 jobs, linked to the construction of the plants. The focus will be on youth employment and 59% of jobs are to be sourced from the Northern Cape, 15% in the Eastern Cape and 13% in the North West.
Radebe also expressed hopes that the projects would contribute to economic growth by drawing R56bn of investment over the next two to three years.
Of these investments R9.8bn will go towards socio-economic development initiatives and R3.4bn will go towards enterprise development over the 20-year lifetime of the projects.
The REIPPPs are also expected to help drive the development of black industrialists, by increasing black participation through ownership and through involvement in the construction and operation of plants.
The local community shareholding in the 27 projects is 7.1% or R1.6bn. Shareholders will receive dividends amounting to R5.9bn over the lifetime of the projects. Communities will be able to control spend through Community Trusts.
About 25% of project equity is owned by foreign investors, said Radebe. They are serving as “catalysts” by providing the initial investment and skills transfer. South Africans own 48% of the equity, the DoE said.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER