Sunday, February 24, 2019

The Renewable Energy Independent Power Producer Procurement Programme
(REIPPP) is making a significant impact on the economy, job creation, community
upliftment, economic transformation and climate change.

The REIPPP is a competitive tender process that has been designed to
facilitate private sector investment into grid-connected renewable energy
generation.

In a short, 8-year period it has attracted R209.4 billion in committed
private sector investment, resulting in much-needed alleviation of fiscal
pressure.

South African entities such as Old Mutual, Red Cap, Phakwe, Pele Green,
and many others, including the Central Energy Fund and the PIC, account for the
majority of investment into the REIPPPP.

Renewable IPPs have created 38 701 jobs years for youth and women from
the surrounding communities. 

“This means 38 701 people have had a full-time job for one year,” Energy
Minister Jeff Radebe said at a media briefing in Pretoria on Sunday.

The minister said local communities have benefited from over R1 billion
spent by IPPs on education by upskilling teachers, providing extra teachers and
classrooms, as well as awarding over 600 bursaries to students from
disadvantaged communities.

In the health sector, the programme has provided health facilities while
contributing to social development through feeding schemes, supporting old age
homes and early childhood development.

Furthermore, it has helped to establish more than 1000 small
enterprises.

With regards to the Black South African equity shareholding in the REIPP
programme, it has progressively increased with each bidding round.

Radebe said the South African equity shareholding across Bid Window 1 to
Bid Window 4 and Smalls Bid Windows 1 and 2 equates to 52% – R31.4 billion- of
the total equity of R60.9 billion. This is substantially more than the 40%
requirement. 

Black South African companies such as Thebe, Kagiso/Tiso, Royal
Bafokeng, H1, Halusani, Reatile, Phakwe – on average – have 33% of the projects
that have reached financial close.  

Broad-based black participation is also secured across the value chain
through community participation, including in engineering, procurement,
construction, operations and maintenance contractors where black ownership
amounts to 21%.

Local community ownership is structured through the establishment of
community trusts.

Qualifying communities will receive R27.1 billion net income through the
dividends from their shareholding over the 20-year life of these committed
projects.

For the consumers, the programme ensures that they pay a fixed number
escalated by CPI per annum or less for the duration of the contract.

With regards to the environment, the REIPP programme’s contribution has
meant that South Africa’s carbon emission is reduced by about 33.2 million
tonnes (Mton) carbon dioxide (CO2) and water savings of 39.2 million kilolitres
achieved by 31 December 2018.

“I acknowledge the programme is not perfect and can be improved in
specific areas. However, we need to embrace that the programme that has done so
much for the country and has received international acknowledgement,” Radebe
said.

He said energy is central to the economy and an enabler in ensuring
human rights in respect of access to food and water.

With techno-economic shifts transitioning to the energy sector, the
minister said the programme holds further exciting opportunities for growth.

“The energy sector is at the cusp of an exciting period, reminiscent of
the huge changes brought about by rapid technological advancement in the mobile
telephony industry in recent years. 

“We need to be prepared for the disruptive times that the fourth
industrial revolution will bring and adjust in a responsible way,” the minister
said.

The centralised power generation plants will disappear and replaced by
distributed generation, mini-grids and batteries, he said adding that the
country must ensure that youth embraces the new technologies and move with the
changing times.

Renewable energy generation plants, complimentary hybrid technologies
such as storage and the associated industrial value-chain activities will
support the creation of jobs and better employment prospects.

To achieve prosperity for all, Radebe concluded that government and all
stakeholders involved have to take hands and become a driving force for
transformation and change. – SAnews.gov.za