Spotlight on IPPs, but legal row looms
Eskom’s reluctance to sign 37 agreements puts investments of about R58bn at risk
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.
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