Lights, in­ac­tion!

Finweek English Edition - - COMPANIES&MARKETS - SVET­LANA DONEVA svet­lanad@fin­

A VIC­TIM OF cir­cum­stance is the term com­monly ap­plied to IPSA – the luck­less in­de­pen­dent power pro­ducer (IPP) whose most re­cent in­terim losses are yet an­other il­lus­tra­tion of the lack of de­ci­sive­ness ex­hib­ited by Eskom in get­ting IPPs on board. As dis­heart­en­ing as its in­terim fig­ures were – ac­com­pa­nied by the fol­low­ing com­ment by chair­man Richard Lin­nell: “The way for­ward for the pri­vate power sec­tor in SA con­tin­ues to re­main un­clear” – there is a small ray of hope for IPSA.

South Africa’s in­te­grated re­source plan (IRP) will open some doors for IPPs. That’s pro­vided plans to build ca­pac­ity in Gov­ern­ment to take care of IPPs and the reg­u­la­tory en­vi­ron­ment go ahead, says Marc Gold­stein, en­ergy an­a­lyst at con­sult­ing firm Frost & Sullivan.

IPSA has lost 40% of its share price value on the JSE alone (the com­pany is also listed on Lon­don’s AIM mar­ket) and is run­ning out of cash to de­velop its planned power projects in the East­ern Cape. In one re­spect, IPSA’s mis­for­tune has also been a prod­uct of bad tim­ing. The com­pany fin­ished build­ing its only plant in SA – KwaZulu-Na­tal’s New­cas­tle Co­gen­er­a­tion (NewCo­gen) – be­fore sign­ing a pur­chas­ing power agree­ment (PPA) with Eskom. “IPSA came into SA with a Euro­pean per­spec­tive, where power is pro­vided at any cost. In SA we’re happy to have the lights go out,” says Gold­stein.


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