Energy Minister Jeff Radebe says government has no intention of renegotiating the power purchase agreements (PPAs) for renewable-energy projects procured in 2011 and 2012, but has left the door open for a “refinancing” of the projects in the interest of lowering the cost of the plants to the consumer.

The prospect of renegotiating the contracts had been raised by Public Enterprises Minister Pravin Gordhan during a recent Parliamentary Portfolio Committee meeting in Cape Town.

Gordhan was quoted as saying that a renegotiation of the PPAs associated with the first two bid windows of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) would “alleviate pressure on Eskom and the electricity tariff”.

However, Radebe said that, while the tariffs bid during the first rounds were indeed high; there had been a steady decline in subsequent auctions. In addition, the PPA contracts had been signed after a "very fair, very competitive and very transparent" process.
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​Government would be open, though, to approaches from the IPPs themselves should they have refinancing proposals that could result in a lowering of the costs. "We will cross that bridge when we get to it," the Minister said.

One proposal is to allow for a possible ten-year PPA term extension, which would create additional value for the IPPs that could be paid for by lowering the current tariff.

Briefing the media in Pretoria on Sunday amid attacks on the IPP programme, which has been singled out by some stakeholders as posing a major financial risk to Eskom, Radebe mounted a robust defence of the REIPPPP. He noted that the programme had not only attracted R209-billion in investment over the past eight years, but had also been lauded internationally.

"While I acknowledge the programme is not perfect and can be improved in specific areas, why do we not embrace a programme that has done so much for the country and has received international acknowledgement?"

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Aug 23 (Renewables Now) - South Africa’s energy minister Mmamoloko Kubayi Tuesday said that a decision on a positive way forward for the much-delayed renewable energy power purchase agreements (PPAs) has been made.

Details will be revealed by the end of August, the South African Photovoltaic Industry Association (SAPVIA) said on Twitter, citing a statement by the minister at the Parliamentary Committee on Energy. Kubayi has also said that each technology has its place in the power mix, calling on stakeholders to work together for the country's energy future.

In July 2016 South African grid operator Eskom refused to enter into new deals with independent power producers (IPPs) that had won preferred bidder status in the last tenders under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The South African Renewable Energy Council (SAREC) calculates that these projects represent a combined investor value of ZAR 58 billion (USD 4.3bn/EUR 3.7bn).

Eskom supplies about 95% of South Africa’s electricity and holds a near monopoly on bulk electricity. The fear is that it is abusing its position as the operator of the grid to favour own investment in new power plants, including a potential nuclear energy project.

An inter-governmental task team told parliament in June that the signing of the PPAs cannot happen this year.

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Multinational companies are offering Nigerian power purchase agreements.

Cost effective and competitively priced solutions for small-scale on/off grid renewable projects of 3 to 15 MW  are required.

The Nigerian government is actively  promoting renewable energy and IPP licenses, where required, are readily available from Nigerian Electricity Regulatory Commission (NERC).

Further details available.. enquire here.....