IPPs put under the spotlight
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 socio-economic interests. Such public-private 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 20-year life of the projects.
The newly signed projects will contribute a total R9.8bn to socio-economic development initiatives and R3.39bn to enterprise development over the 20-year 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 socio-economic and operational contributions of the national utility-scale 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 socio-economic 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 black-owned enterprises during the construction period,” Radebe said.
WIND POWER: The renewable energy scheme seeks to be more economically inclused with the entry of community trusts.