Minister Mmamoloko Kubayi. Picture: GCIS

Business In The News South Africa

Kubayi gives Eskom deadline for IPP contracts signing

PRETORIA, September 1 – Power utility Eskom must ensure that all outstanding contracts for independent power producers (IPPs), under the Bid Window 3. 5 and 4 must be ready before end of next month, Energy Minister Mmamoloko Kubayi said on Friday.

 

“After lengthy deliberations, we came to a conclusion on the following actions: that the PPA [Power Purchase Agreement] for Bid Window 3. 5 and Bid Window 4 will be signed by the end of October 2017; the department of energy through the IPP office to engage with all affected parties for Bid Window 3. 5 and Bid Window 4 to re-negotiate not above 77 cents per kilowatt hour,” Kubayi told a media briefing in Pretoria.

She said this arrangement would assist in reducing the requirement for additional government guarantees which would have a negative impact given the current economic climate and constraints in the fiscus.

“[We came to the conclusion that] Eskom should ensure that all contracts are in place for signing on 28 October 2017, and that I, as the minister of energy, will meet with all IPPs participants in all bid windows, to discuss issues of concern from IPP and for government to give feedback on concerns before the date of the signing.”

Kubayi said there has been issues raised with government regarding the IPPs, and those matters will need to be resolved.

“Of importance [among the issues raised] is the lack of transformation particularly regarding local ownership of some of these projects. This has to be reconsidered and adequately addressed. Allocation of projects and the ownership structure must be in line with South African transformation policies,” said Kubayi.

She said there was also need to “review” the issue of loan conditions given to black South African participants.

“Lastly, there is need to restructure the community trust dividends,” said Kubayi.

– African News Agency (ANA)

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