Feature image: The Department of Energy (DoE).

At the launch of the Black Energy Professionals Association (BEPA) on Thursday, South Africa’s minister of energy, Jeff Radebe, stressed the importance of this platform for “black professionals to share ideas, forge closer working relationship with government, to influence government energy policy, and collaborate”.

The Minister said that government, public and private sector need to work together towards a radically transformed and inclusive economy: “This is a non-negotiable for our country.”

“My recent approval and sign off of the Renewable Energy Independent Power Producers Projects supports an increase in black participation through increase not only at ownership level, but at operational and manufacturing level towards the creation of black industrialists,” he added.

Local participation

According to Radebe, the government’s IPP Programme “remains the only vehicle that progressively enables participation by black investors and industrialists in electricity generation. Through its unique programme design, the Renewable Energy IPP Programme requires a mandatory 40% of South African Entity Participation and black enterprise and broad-based black participation in the form of ownership, economic and socio-economic benefits.”

“With these latest projects, black shareholding of 64.2% of local ownership has been achieved, and shareholding by black South Africans has also been secured across the value chain. Black ownership and participation in Engineering, Procurement and Construction (EPC) and Operating and Maintenance (O&M) Project Companies have improved under this new round of projects.

“Around 86%, or 1 748, of the top management jobs of the new IPP Project Companies will be filled by black professionals,” the Minister added.

Black-owned enterprises

“The IPPs have committed to an average of about 40% or R8.90 billion of the local goods and services spend to be procured from black-owned enterprises during the construction period,” Radebe said adding that a key focus for the Programme is to ensure rural communities receive sustainable benefits.

“The Renewable Energy IPP Programme is embracing local community socio-economic and enterprise development and through an inclusive geographic approach it has created opportunities across the country – in all 9 provinces – in mostly lagging rural areas,” he said.

According to Radebe, “local community shareholding (total equity) in the newly signed projects amount to 7.1% (or R1 627 million).  The local community shareholders for these projects will receive R5.9 billion net income over the 20 year life of the projects.  In addition, the IPPs will enable local communities to further benefit directly from the investments attracted to the area and IPP commitments in the areas of education and skills development social welfare, healthcare, general administration and enterprise development.”

The Minister concluded: “The newly signed projects will contribute a total R9.8 billion to socio-economic development initiatives and R3.39 billion to enterprise development over the 20 year life time of the projects.”