21 October 2008 – Eskom has pre-qualified 27 developers from national and international companies in a bid to secure additional power from private companies under its multi-site base load independent power producer programme.
Eskom was designated to be the single buyer of power from Independent Power Producers (IPPs) in South Africa by Cabinet in September 2007. Successful IPPs will therefore sign long-term power purchase agreements with Eskom.
Power plants developed under this programme will be located at various sites within South Africa and development will be on a Build-Own-Operate basis with the contract estimated to last for 25 years. Under the programme, Eskom’s total requirement ranges from 2 100MW to approximately 4 500MW, with a minimum plant capacity of 200MW.
The 27 pre-qualified companies will be issued with the Request for Proposals (RFPs) at the end of November 2008, final bids will close in May 2009 and deals will be concluded in the first quarter of 2010 and delivery of power to the grid within the 2012 – 2017 time frame.
As is customary for base load IPPs, the power purchase agreement will be structured on an availability basis. Under this structure Eskom, as off-taker, will pay capacity charges based on the availability of the plant. Successful IPPs will also be required to enter into an equivalent term agreement with a fuel supplier to procure and secure fuel supply.