Spot­light on IPPs, but le­gal row looms

Eskom’s re­luc­tance to sign 37 agree­ments puts in­vest­ments of about R58bn at risk

The Star Early Edition - - BUSINESS REPORT - Siseko Njobeni

DEPUTY Pres­i­dent Cyril Ramaphosa boasted at the World Eco­nomic Fo­rum (WEF) about South Africa’s re­new­able en­ergy in­de­pen­dent power pro­ducer pro­cure­ment pro­gramme as re­new­able en­ergy com­pa­nies pre­pared for a court bat­tle with Eskom to pro­tect their R58 bil­lion in­vest­ment.

The loom­ing court bat­tle stems from Eskom’s al­leged re­luc­tance to sign power pur­chase agree­ments with 37 in­de­pen­dent power pro­duc­ers (IPPs). The South African Re­new­able En­ergy Coun­cil (Sarec) said Eskom’s stance put in­vest­ments of about R58bn at risk. Eskom is the des­ig­nated buyer of the power from IPPs.

It is re­quired to sign 20-year power pur­chase agree­ments with them.

Speak­ing at the WEF an­nual meet­ing in Davos on Tues­day, Ramaphosa held up the suc­cesses of the re­new­able en­ergy pro­gramme to back up the gov­ern­ment’s op­ti­mism about gov­ern­ment and pri­vate sec­tor part­ner­ships.

While the pro­gramme has so far re­sulted in in­vest­ments of about R194bn, re­la­tions be­tween Eskom and the re­new­able en­ergy in­dus­try have re­cently soured.

Sarec, which is rep­re­sent­ing the 37 IPPs af­fected by the de­lay in the sign­ing of the agree­ments, said yesterday that it had ob­tained le­gal opin­ion that con­firmed pre­ferred bid­ders were en­ti­tled to ap­proach a court to en­force Eskom’s sig­na­ture of the power pur­chase agree­ments.

“In our opin­ion Eskom can­not side­step the bind­ing de­ter­mi­na­tion of the min­is­ter; they are bound by the min­is­te­rial de­ter­mi­na­tion, which in­cludes sign­ing the power pur­chase agree­ments,” said David Un­ter­hal­ter, a se­nior coun­sel at Web­ber Wentzel.

Sarec chair­per­son Brenda

Deputy Pres­i­dent Cyril Ramaphosa, fourth from left, leads the South African del­e­ga­tion at the Busi­ness In­ter­ac­tion Group at the World Eco­nomic Fo­rum 2017 in Davos. He boasted about South Africa’s re­new­able en­ergy in­de­pen­dent power pro­ducer pro­cure­ment pro­gramme.

LOBBY group Or­gan­i­sa­tion Un­do­ing Tax Abuse (Outa) wants the gov­ern­ment to ex­tend the com­ment pe­riod on the New En­ergy Ef­fi­ciency Strategy, which the De­part­ment of En­ergy pub­lished in the Gov­ern­ment Gazette on De­cem­ber 23. PAGE 20

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