South Africa: Pending PPAs for Renewables to be Signed in October

South Africa: Pending PPAs for Renewables to be Signed in October

As part of 37 utility-scale renewable energy projects in South Africa, various PPAs are still outstanding. These will be signed in October, the country’s Minister of Energy has now announced.


South Africa is running what is called the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). As part of Rounds 3.5 and 4 of this programme, 37 large-scale projects were selected. The corresponding PPAs, however, are still pending. According to the South African Photovoltaic Industry Association (SAPVIA), the country’s Minister of Energy Mmamoloko Kubayi has now announced that these outstanding PPAs will be signed by the government in October.


Signing had previously been postponed

Shortly after being appointed in April, Kubayi had postponed the signing of the pending PPAs.
Hence this turn of events is good news for the industry, and applauded by SAPVIA: “By confirming dates for the financial close of the Round 3.5 and Round 4 projects, the government is sending out a signal that indeed, as President Zuma stated last week, ‘South Africa is open for business’. The delays in the programme have endangered long term investor confidence, investment and more specifically job creation and retention in this market.”

The postponed signing was not the first delay the REIPPPP has suffered. In fact, multiple delays over the past two years have taken their toll. They were caused by problems concerning the grid-connection as well as the reluctance to sign the PPAs on Eskom’s side.


Three entities hesitated to proceed with PPA signing

As a matter of fact, the South African Ministry of Finance, the energy regulator NERSA and the Department of Energy were contacted about the issues concerning REIPPPP projects, or so the South African Renewable Energy Council (SAREC) says. The country’s president Jacon Zuma strongly advocated for a near-term signing of the PPAs. “The government is committed to the overall Independent Power Producers Programme, and we are expanding the programme to other sources of energy including coal and gas, in addition to renewable energy,“ he was quoted back in February.


PV market growing rapidly in South Africa

At the end of last year, South Africa’s overall PV capacity was nearly 1.5 GW. One third of this was added in 2016 alone, which proves how quickly the market is growing in this country: Over just three years, from 2013 to 2016, it more than tripled.


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