Cape Town - The announcement that Eskom will sign the outstanding Renewable Energy Independent Power Producer Procurement Programme (REIPPP) sends a strong message to investors that the renewable energy industry is very much open for business.
The SA Photovoltaic Industry Association (Sapvia) was reacting to President Jacob Zuma's State of the Nation Address (SONA) on Thursday evening.
"We now hope that Eskom heeds the president’s commitment to finalise these agreements and the minister moves ahead with the announcement of the expedited round," Sapvia said in a statement. It represents more than 170 players in the renewable energy sector.
Zuma committed to South Africa’s continued investment in renewable energy as part of its overall energy mix. This is after Eskom has for months refused to issue final budget quotes to preferred bidders in Round 4 and the Round 4 extension of the REIPPP.
“It is reassuring to know that government remains committed to working together with the private sector to attract investment and drive much-needed job creation in the renewable energy sector,” said SAPVIA chair Davin Chown.
“This industry has a strong track record when it comes to delivering on government’s key objectives of economic growth and social development and we look forward to building on the successes we have already had in rounds 1, 2, and 3 of the REIPPP.”
Sapvia has been working together with partner associations in the SA Renewable Energy Council to build long-term partnerships with government and related stakeholders who benefit from the growth in renewable energy in South Africa.
“We know from the first three rounds of the REIPPP that this collaboration between business and government provides a very successful foundation for sustainable and genuinely transformative enterprises and we can’t wait to kick on with the programme,” said Chown.
Sapvia CEO, Mike Levington says the association appreciates the hard work that the minister of energy has done behind the scenes to assist in unblocking the obstacles to the finalisation of the financial close of the fourth procurement round.
“The spades are in the ground and ready and waiting for the minister to sign,” he says. “We now look forward to the announcement of the preferred bidders in the expedited round of the programme."
“As a result of their efforts, many new construction jobs will be created, many current jobs will be secured, foreign and local investment will flow into the sector and the economy,” says Levington. “Local ownership in the 37 projects as well as projects in the small IPP Programme will be secured, particularly by black owned enterprises, and significant socio-economic benefits will flow to local communities over the 20 year lifespan of the projects.”
The South African Renewable Energy Council (Sarec) also said it is very pleased to note the president’s clear support for the country’s Renewable Energy Procurement Programme (REI4P).
“Some of the serious economic effects of the recent pause in SA’s renewable power procurement programme such as factory closures and job losses have caused serious hardship for this fledgling industry. We trust that there will now be rapid movement to resolve the impasse in line with the president’s directive,” said Sarec chair Brenda Martin.
"This president’s leadership can ensure that now much-needed direct and indirect investment and job creation is unlocked. More than R57bn investment will flow in the short-term and jobs will be created once outstanding power purchase agreements are signed."
By 2014, investment into renewables in SA accounted for 84% of all foreign direct investment - a total sum of just under R200bn. Since 2016, while approximately R57bn worth of further renewable power investment had been secured under the programme in 2015, this sum has not entered the economy.