Back in 2010, government made the bold decision to create a legislative and practical environment in which the Department of Mineral Resources and Energy could procure power generated by private entrants to the market. Whilst recognising the necessity of investment by the private sector in new generation capacity to achieve a diversified and sustainable energy mix, the South African government also saw the importance of an opportunity for a solution which could address the socio-economic and developmental needs of the Country, at the same time ensuring inclusive growth and prosperity for all.
South Africa is blessed with an abundance of wind and solar resources and ranks as one of the top five destinations in the world. Over the past few years, the Programme successfully unlocked rapid, large-scale private sector investment in new energy generation infrastructure, which achieved an investment of approximately R202 billion. More importantly it also served as an attractive platform for foreign private investors to transfer skills to South Africans who would like to participate in renewable energy.
Not only has the Programme ensured participation of black people in mainstream economic activity, of which 33% of ownership is in the hands of the black South African partners, but it has also ensured that communities from the areas around the projects have an ownership stake in the projects (in some cases as high as 40%). In addition, the REIPP programme is leveraging infrastructure investment to transform the South African economy, stimulate growth and create jobs. It is not only changing the energy landscape in South Africa, but also contributes significantly to the lives and livelihoods of the people.
The tremendous success is testimony to how effectively Government and the private sector have partnered and focused its efforts to employ our readily available renewable resources towards true, sustainable development.
Not surprisingly, the appetite among investors and developers for the chance to bid in successive rounds opened by government grew rapidly and remains high, with the result that costs of renewable electricity delivered to the grid have become competitive. At the same time, the industry has been praised for its strict adherence to bidding policy and legal guidelines, and for working with the precautionary principle as a priority in its operations.
By the same token, government’s selection of preferred bidders has not once been challenged, indicating that the industry has much confidence in government’s application of its own rules. If one wants an example of impeccable governance working with competitive enterprise to produce a public good that will deliver well into the future – and there are few such examples worldwide – one need look no further than South Africa’s IPP programme.
Through the success of the Renewable Energy Independent Power Producers Programme (REIPPPP), the IPP Office has established itself as a reliable vehicle for the procurement of other technologies / sources in the energy mix as well, for example coal and gas-to-power Independent Power Producers.
Contact Person: Project Officer
Tel: 087 351 3000 (main switchboard)