IPPs put un­der the spot­light

Afro Voice (National Edition) - - SPORT - THELMA NGOMA busi­ness@the­newage.co.za

THE South African Wind En­ergy As­so­ci­a­tion (Sawea) yes­ter­day brought to­gether key rep­re­sen­ta­tives of the three con­stituen­cies con­cerned with eco­nomic de­vel­op­ment in the re­new­able en­ergy in­de­pen­dent power pro­ducer pro­cure­ment pro­gramme.

The na­tional renewables pro­gramme seeks to en­sure that in­de­pen­dent power pro­duc­ers (IPPs) in­clude min­i­mum share­hold­ing for com­mu­nity trusts. This own­er­ship struc­ture has been built into the IPP busi­ness frame­work and goes be­yond typ­i­cal CSI ef­forts to bridge a num­ber of so­cio­eco­nomic in­ter­ests. Such pub­lic­pri­vate part­ner­ships have an im­por­tant role to play in strength­en­ing lo­cal com­mu­ni­ties.

En­ergy Min­is­ter Jeff Radebe said that lo­cal com­mu­nity share­hold­ing (to­tal eq­uity) in the newly signed pro­jects amount to 7.1% or R1.6bn. The lo­cal com­mu­nity share­hold­ers for these pro­jects will re­ceive R5.9bn net in­come over the 20­year life of the pro­jects.

The newly signed pro­jects will con­trib­ute a to­tal R9.8bn to so­cio­eco­nomic de­vel­op­ment ini­tia­tives and R3.39bn to en­ter­prise de­vel­op­ment over the 20­year life time of the pro­jects.

The or­gan­i­sa­tion says it is work­ing with key con­stituen­cies to help im­prove the im­ple­men­ta­tion of eco­nomic de­vel­op­ment com­po­nents through in­dus­try prac­tice.

Par­ties in­cluded eco­nomic de­vel­op­ment di­rec­tors of project com­pa­nies, com­mu­nity trus­tees and em­ploy­ees of com­mu­nity trusts. Each of these groups fo­cus on the im­ple­men­ta­tion of dis­tinct facets of lo­cal eco­nomic de­vel­op­ment in rural com­mu­ni­ties ad­ja­cent to wind farms in the North­ern, Eastern and West­ern capes.

Brenda Martin, CEO of Sawea, said that as the in­dus­try as­so­ci­a­tion for wind power in South Africa, Sawea is “con­cerned with both the so­cio­eco­nomic and op­er­a­tional con­tri­bu­tions of the na­tional util­ity­scale re­new­able pro­cure­ment pro­gramme”.

Radebe said that the re­new­able en­ergy IPP pro­gramme re­quires a manda­tory 40% of South African en­tity par­tic­i­pa­tion and black en­ter­prise and broad­based black par­tic­i­pa­tion in the form of own­er­ship, eco­nomic and so­cio­eco­nomic ben­e­fits.

Ac­cord­ing to the min­is­ter, with these lat­est pro­jects, a black share­hold­ing of 64.2% of lo­cal own­er­ship has been achieved and share­hold­ing by black South Africans has also been se­cured across the value chain.

“Black own­er­ship and par­tic­i­pa­tion in engi­neer­ing, pro­cure­ment and con­struc­tion and op­er­at­ing and main­te­nance project com­pa­nies have im­proved un­der this new round of pro­jects.

“Around 86%, or 1 748, of the top man­age­ment jobs of the new IPP project com­pa­nies will be filled by black pro­fes­sion­als

“The IPPs have com­mit­ted to an av­er­age of about 40% or R8.9bn of the lo­cal goods and ser­vices spend to be pro­cured from black­owned en­ter­prises dur­ing the con­struc­tion pe­riod,” Radebe said.

PIC­TURE: GETTY IM­AGES

WIND POWER: The re­new­able en­ergy scheme seeks to be more eco­nom­i­cally in­clused with the en­try of com­mu­nity trusts.

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