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DA: Gordon Mackay says delay in signing of renewables contracts a massive blow to investor confidence

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DA: Gordon Mackay says delay in signing of renewables contracts a massive blow to investor confidence

Photo by Duane
Former Eskom CEO Brian Molefe

11th April 2017

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The DA will write to the new Minister of Energy, Mmamoloko Kubayi, to call on her to urgently set a new deadline for the signing of the Power Purchase Agreements (PPAs) for the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and to stick to the new deadline.

This comes after the deadline for Eskom to sign the remaining 37 renewable Independent Power Producers (IPPs) contracts, from the fourth bid window, lapsed today.

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This finalisation has been delayed for months after former Eskom CEO, Brian Molefe, expressed concern about making this commitment due to costs to the utility and its power surplus amid weak demand.

These concerns have been addressed by Treasury, the National Energy Regulator of South Africa and the Department of Energy.

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Former Minister of Energy, Tina Joemat-Pettersson, stated that the impasse had been broken in February this year and stated that Eskom would sign off on the IPPs today, 11 April 2017.

Now there are further delays as Minister Kubayi has claimed that she would like to discuss the IPPs with the Minister of Public Enterprises, Lynne Brown, and other interested parties.

We believe that the delay is a further blow to investor confidence which the country can ill afford in light of the recent cabinet reshuffle and sovereign downgrades.

It is also convenient timing given the push for nuclear with the request for proposals being issued in mid-June.

With 13 000 jobs and R58 billion worth of investment waiting for signature, urgency is required in this consultative process by Minister Kubayi.

Having resulted in inward investment of R200 billion over the past six years, the DA is worried that the delay will negatively affect the IPPs and the successful bidders for the 2015 procured projects.

Renewable energy is a vital part of our future energy mix and should not be side-lined by potential patronage-linked motives around nuclear.

This is a test of the new minister’s commitment to renewable energy and whether the renewables programme has a future beyond the already allocated bid windows.

 

Issued by DA

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