In South Africa, the minister of energy, Tina Joemat-Pettersson, awarded ten clean power projects under the Department of Energy’s Small Projects Independent Power Producer Programme (SPIPPP) last week. Two of these projects include the 5.8MW Adams and 5.8MW Bellatrix solar projects, which will be developed, designed, funded, constructed and operated locally.
Developing the local economy
The solar projects are sponsored by Cape Town-based Aurora Power group and the design, construction and operation will be done by South African-based solar photovoltaic (PV) engineering and construction firm, SOLA Future Energy.
SOLA Future Energy said in a statement that the South African Industrial Development Corporation (IDC) together with local black owned company Mergence Investment Managers, a term sheet has been signed to provide debt to the project company.
Co-founder of Aurora Power, Chris Haw commented: “We’re very excited to finally have a completely locally controlled, financed and constructed project. Up to now our participation has been limited by the size of the projects and the competition experienced from internationally backed IPP companies.
“Although we’ve developed 245MW of successful IPP projects with excellent partners over the previous rounds of bidding, we have had to sell or partner with larger international companies to meet the requirements of lenders and the market.
He added: “Most of the engineering and construction has been done through foreign companies, despite us having the requisite skills and experience. Now everything is being done by local firms, which means all the benefits remain in South Africa.”
Solar PV: keeping it local
Up until now, the REIPPP programme has been largely dependent on international players to support the construction of local projects, which has not left room for the local market to participate.
The development of power projects has the potential to significantly contribute towards the growth of an economy, and according to the solar PV firm, the DoE has been “criticised for designing a programme that has not supported the development of small and local South African IPP and EPC businesses up to now.”
The solar PV firm said: “The implementation of the Small Projects IPP procurement programme was meant to address this criticism. Along with a cap on project size of 5MW (roughly R110m in capex), it also requires that 60% of the ownership of the projects be in local hands and 15% owned by small-medium business enterprises.”
Director at Aurora Power Solutions, Simon Haw said: “Despite the delay in announcement, we are delighted to have received the formal appointment as a preferred bidder and we are progressing to financial close.
“Going forward we hope that the process time frames are adhered to as smaller projects of this nature are sensitive to delays.”
Delivering clean energy
According to SOLA Energy Future, each solar plant will have the capacity to generate an estimated 190 million “carbon-free” kWh for the duration of the plants’ life, which is enough to power 1,000 middle income households.