The Industrial Development Corporation’s (IDC’s) green industries strategic business unit (SBU), which was established in April 2011, currently has a committed portfolio valued at R10.4-billion, much of which relates to its support for South Africa’s renewable-energy project pipeline.
To date, the Department of Energy (DoE) has concluded two separate bidding rounds under its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). A total of 47 wind, solar and minihydro projects, with a combined investment value of around R80-billion, have signed the agreements necessary to proceed to the development stage.
Through the REIPPPP, the DoE aims to secure an initial 3 625 MW of large-scale renewables capacity, of which 2 460 MW has already been allocated. A third bid window will close on August 19 and the next set of preferred projects should be unveiled on October 29.
Green industries SBU head Rentia van Tonder tells Engineering News Online that the IDC has already supported 19 REIPPPP projects up to financial close, 18 of which are receiving post-financial-close funding. The bank’s total REIPPPP-related commitment stands at R7.7-billion.
The IDC is both an equity participant in REIPPPP projects and a debt provider. In addition, it has been a funder for community and black economic–empowerment equity in the projects.
The programme has been criticised by some for increasing the cost of electricity provision. But Deputy President Kgalema Motlanthe recently defended the plan to diversify the country’s coal-heavy energy mix.
Speaking at a green-economy event, Motlanthe argued that the move to develop renewables was not designed to abandon coal, nor foreclose on other technologies such as nuclear and shale gas. Instead, the intention is to take advantage of South Africa’s other natural-resource endowments.
“Fortunately for South Africa, we have amongst the best solar-energy resources in the world in addition to coal, which makes it logical for us to pursue the exploitation of photovoltaic (PV) technologies.”
Also being emphasised are the other derivatives from the renewables investment, including research and development and industrialisation spin-offs.
Van Tonder argues that the State-owned development financier has been proactive in supporting local renewables component manufacturers.
“The total IDC committed funding to green-technology component manufacturers is just above R530-million,” she reports, noting that such projects are being funded through the bank’s metals, machinery and transport equipment SBU.
Support has been provided to three PV manufacturers, a wind-tower manufacturer and a solar thin-film manufacturer, and Van Tonder indicates that it is targeting localisation efforts in the areas of blades and towers for wind farms, PV panel manufacture, as well as for the structural components for concentrated solar power plants.
Besides renewables, the IDC has earmarked three other priority green-industry subsectors, including energy efficiency, fuel-based green energy and biofuels. Linked to these focus areas, Van Tonder avers, is an increased focus on localisation and industrialisation of technologies supporting the various subsectors.
A total of R25-billion has been set aside by the IDC for development of green industries and with its current commitments, the green industries SBU already comprises 8% of the bank’s overall portfolio.
“Given the current pipeline of projects it may increase to over 10%,” Van Tonder reports.
This is in line with the IDC’s stated aspiration of turning to green industries to replenish its portfolio of listed and unlisted assets, which remains a key source of income and balance sheet stability.
CEO Geoffrey Qhena has indicated that ‘sustainable’ investments are set to absorb the largest single share of the group’s R100-billion-plus funding plan for the coming five years.
But increased competition for limited further REIPPPP allocations has emerged as a constraint, while public awareness of the energy efficiency and fuel-based green energy opportunities has also held back progress.
“Our main objective is to play a leading role in unlocking value through development of the green economy,” Van Tonder says.
Through that process, the IDC is hoping to facilitate the inclusion of local companies not only as project shareholders, but also as manufacturers, plant operators and contractors.
“This remains a challenge and an important driver to support local development, skills transfer and upliftment in order to develop a viable and vibrant local industry.”
Source....
To date, the Department of Energy (DoE) has concluded two separate bidding rounds under its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). A total of 47 wind, solar and minihydro projects, with a combined investment value of around R80-billion, have signed the agreements necessary to proceed to the development stage.
Through the REIPPPP, the DoE aims to secure an initial 3 625 MW of large-scale renewables capacity, of which 2 460 MW has already been allocated. A third bid window will close on August 19 and the next set of preferred projects should be unveiled on October 29.
Green industries SBU head Rentia van Tonder tells Engineering News Online that the IDC has already supported 19 REIPPPP projects up to financial close, 18 of which are receiving post-financial-close funding. The bank’s total REIPPPP-related commitment stands at R7.7-billion.
The IDC is both an equity participant in REIPPPP projects and a debt provider. In addition, it has been a funder for community and black economic–empowerment equity in the projects.
The programme has been criticised by some for increasing the cost of electricity provision. But Deputy President Kgalema Motlanthe recently defended the plan to diversify the country’s coal-heavy energy mix.
Speaking at a green-economy event, Motlanthe argued that the move to develop renewables was not designed to abandon coal, nor foreclose on other technologies such as nuclear and shale gas. Instead, the intention is to take advantage of South Africa’s other natural-resource endowments.
“Fortunately for South Africa, we have amongst the best solar-energy resources in the world in addition to coal, which makes it logical for us to pursue the exploitation of photovoltaic (PV) technologies.”
Also being emphasised are the other derivatives from the renewables investment, including research and development and industrialisation spin-offs.
Van Tonder argues that the State-owned development financier has been proactive in supporting local renewables component manufacturers.
“The total IDC committed funding to green-technology component manufacturers is just above R530-million,” she reports, noting that such projects are being funded through the bank’s metals, machinery and transport equipment SBU.
Support has been provided to three PV manufacturers, a wind-tower manufacturer and a solar thin-film manufacturer, and Van Tonder indicates that it is targeting localisation efforts in the areas of blades and towers for wind farms, PV panel manufacture, as well as for the structural components for concentrated solar power plants.
Besides renewables, the IDC has earmarked three other priority green-industry subsectors, including energy efficiency, fuel-based green energy and biofuels. Linked to these focus areas, Van Tonder avers, is an increased focus on localisation and industrialisation of technologies supporting the various subsectors.
A total of R25-billion has been set aside by the IDC for development of green industries and with its current commitments, the green industries SBU already comprises 8% of the bank’s overall portfolio.
“Given the current pipeline of projects it may increase to over 10%,” Van Tonder reports.
This is in line with the IDC’s stated aspiration of turning to green industries to replenish its portfolio of listed and unlisted assets, which remains a key source of income and balance sheet stability.
CEO Geoffrey Qhena has indicated that ‘sustainable’ investments are set to absorb the largest single share of the group’s R100-billion-plus funding plan for the coming five years.
But increased competition for limited further REIPPPP allocations has emerged as a constraint, while public awareness of the energy efficiency and fuel-based green energy opportunities has also held back progress.
“Our main objective is to play a leading role in unlocking value through development of the green economy,” Van Tonder says.
Through that process, the IDC is hoping to facilitate the inclusion of local companies not only as project shareholders, but also as manufacturers, plant operators and contractors.
“This remains a challenge and an important driver to support local development, skills transfer and upliftment in order to develop a viable and vibrant local industry.”
Source....
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