Govt, IPPs a step closer to lowering electricity tariffs

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A electricity pylon.
A electricity pylon.
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  • The Department of Mineral Resources and Energy has completed a re-financing agreement with an Independent Power Producer.
  • This may contribute towards lowering electricity prices, the department said in a statement.
  • The refinancing initiative was launched last year, as a means to get Independent Power Producers from bid windows 1 to 3.5 to lower the wholesale price of electricity.


The Department of Mineral Resources and Energy has managed to complete its first refinancing agreement with an Independent Power Producer (IPP), which is part of an initiative to lower electricity tariffs.

The department issued a statement on Monday in which it announced that it had concluded a refinancing agreement with the ACWA Power's Solafrica Bokpoort Concentrated Solar Power (CSP) power plant. It is part of a refinancing initiative launched by the department in October 2019. All IPPs (64 projects) of the bid windows 1 to 3.5 were invited to participate in the initiative, with the aim to reduce the wholesale price of electricity.

Eskom has signed offtake agreements with IPPs – but these agreements have in the past come under fire from unions for being costly to the power utility.

This particular agreement with Bokpoort CSP, will result in a 3.2% reduction on the IPP tariff charged to Eskom, according to the department.

The department said that through the IPP Office, it is considering and seeing further refinancing requests.

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