The much-delayed BW5 (fifth bid window) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), recently saw the signing of project agreements for three more wind projects. This is according to Mineral Resources and Energy Minister Gwede Mantashe who said that more BW5 projects will be inked in the coming weeks.
Read also: Agreement signed for development of three onshore wind power projects in South Africa
The three projects, which will be built by Red Rocket South Africa, have a combined total capacity of 364 MW and an investment value of R9.3 billion. The projects include the 84 MW Wolf Wind Farm, close to Jansenville in the Eastern Cape. It also includes the 140 MW Brandvalley Wind Farm and the 140 MW Rietkloof Wind Farm, both in the Western Cape, close to Laingsburg.
The Red Rocket South Africa’s power purchase and implementation agreements were the 100th to be inked since the Independent Power Producer Procurement Program was established in 2011. Mantashe noted that their signing represented a key milestone.
The implementation agreement gives the Red Rocket projects 60 days to complete all obligations. It also allows them to complete conditions before they can start drawing down on their lending and starting construction.
How long will the BW5 project construction period last?
The construction period is expected to last 24 months once the projects have reached a financial close.
The first three BW5 wind projects inked their project agreements on September 22. The projects are being implemented by EDF. It will have a combined capacity of 420 MW. An investment amount of R11 billion will be pumped into the projects.
According to the Department of Mineral Resources and Energy (DMRE), two EDF initiatives reached commercial close on November 9. The initiatives will soon reach financial close.
The initiative’s objective
The ultimate aim of BW5 was to procure 2,600 MW. This would be comprised of 1,600 MW of onshore wind and 1,000 MW of solar photovoltaic (PV).
The bid window was initiated in April last year. It came after a seven-year interruption to the REIPPPP due to the then-state-captured Eskom leadership’s refusal to sign power purchase agreements with independent power producers. It selected 25 wind and solar PV projects as preferred bids in October last year.
The DMRE gave all BW5 projects till the end of October to sign their contracts. Recently, the department said that the deadline had been extended once more. This is in response to requests from the eight preferred bidders selected for the Risk Mitigation Independent Power Producer Procurement Program in addition to the remaining BW5 preferred bidders.
In regard to project readiness and timelines provided for legal closure, the department is in touch with each preferred bidder.
The DMRE said that it is expected that the signing of the next projects will occur in November 2022. This is in the wake of calls for the projects to be abandoned and bid bonds to be issued in order to free up valuable grid capacity for other projects.
The department stated that details would be announced about the other BW5 projects after all governance processes on the government’s side as well as the projects themselves have been completed.
