10 AFRICAN ENERGY
Renewable energy projects signed
Energy Minister Jeff Radebe signed the project agreements during March 2018 .
By
South African Government News Agency
The minister said the announcement was a milestone following a protracted period of uncertainty , and the signing of the agreements would be re-confirming government ’ s commitment to not only renewable energy , but also a solid partnership with the private sector in pursuing government ’ s energy transition objectives for the future .
Minister Radebe said that signing of the long-awaited agreements will bring much-needed policy and regulatory certainty and maintain South Africa ’ s position as an energy investment destination of choice . “ This initiative will enable R56- billion of new investment in the economy over the next two to three years , which will immediately contribute to growth in the economy , supporting the already positive achievement of 3.1 % GDP growth in quarter four .
“ This programme , as well as the proposed future initiatives , will have a significant contribution in job creation across the energy value chain , including the re-establishment of industrial development and support to the technical training of young people to be absorbed in the labour market ,” he said .
“ In a nutshell , these projects will provide 61 600 full-time jobs , of which 95 % is for South African citizens , mostly during plant construction , specifically with a focus on youth employment . Northern Cape will have 59 % of the jobs created , followed by Eastern Cape with 15 %, and North West Province with 13 % of jobs created ,” the minister said .
The minister said that black participation is anticipated to increase not only at ownership level , but at operational level , and added that the construction and operation of the projects will eventually lead to the creation of black industrialists . “ The Renewable Energy Programme is embracing local community development as well as socio-economic and enterprise development . Local community shareholding ( equity share ) in the 27 projects amounts to 7.1 % ( or R1.6-billion ). The local community shareholders for the 27 projects will receive R5.9- billion net dividends over the 20-year lifetime of the projects .”
This will have a substantial positive impact on the living standard of the communities around these projects . “ Communities , through community trusts , have full control over how the money will be spent in their areas ,” he said . The minister also said the IPPs will enable local communities to further benefit directly from the investments attracted to the areas through the R9.8- billion to be spent on socio-economic development initiatives and R3.4-billion to enterprise development over the 20-year lifetime of the project agreements .
“ As part of the bid obligations , bid window 3.5 and four preferred bidders have made commitments in five categories , namely , education and skills development , social welfare , health care , general administration , and enterprise development . The majority of the money will be spent in these local communities around the projects and will involve women-owned small businesses . It will also ensure youth participation and development , whether through skills transfer and training , bursaries , and / or the establishment of small businesses ,” he said .
The minister said he has requested the IPP office to engage in the preparations to finalise all outstanding requirements for the signing of the 20 projects under the Small Renewable Energy Programme [ projects between 1MW and 5MW ], which will have a substantial impact on a different market segment and contribute to creation of small businesses . “ This will immediately ensure a R2.7-billion investment in this part of the economy . To be noted is that our Development Finance Institution , the DBSA , and the German Development Finance Institution KfW , have established access to affordable funds in support of the participation of small businesses in the ‘ green ’ economy and , therefore , in the Small Renewable Energy Programme . We want to thank them for working with the government and for their willingness in growing this very important market .”
The minister also said he has requested the IPP office to ensure a more equal distribution of the benefits to the communities , specifically the distribution of the dividends , by analysing and creating a better and more efficient structure for this purpose to sign the two projects under the Coal IPP Programme , as well as the 19 projects procured under the Renewable Energy Expedited Bid Window , which will be announced in due course . “ Together , this will achieve a further R103-billion of investment in the economy with substantial foreign direct investment ,” the minister said . PA
April 2018 Volume 24 I Number 2 www . plumbingafrica . co . za