Government open bidding for renewables tender 2012-08-30

South Africa to open third renewables tender next month 

The South African government said it will open bidding for its third renewables tender round next month, as it accepted blame for the delays that dogged the first batch of projects.

A Department of Energy (DOE) official has reportedly claimed that banks “are queuing” to fund renewables projects in electricity-starved South Africa, but acknowledged that the delays to first-round projects – allocated last December – are the fault of the government. A lot of first-round winners, such as France’s Soitec, have expressed frustration that despite nailing down financing commitments, they have from now on to receive power-purchase agreements (PPAs) from national-owned utility Eskom.

The DOE official says amount first-round projects are expected to reach financial close by the end of August – two months later than the timetable the government originally imposed on developers. In late June Pretoria acknowledged that it would give projects extra time, and since then has been vague about its forecasts for the process, giving developers and investors pause for concern.

In May South Africa awarded another 1.04GW of renewables capacity, following on from the 1.42GW allocated last December alongside the UN climate talks in Durban.

The government’s lack of transparency and perceived inefficiency has emerged as the principal stumbling block in a market that is universally acknowledged as having vast potential for renewables – and could act as a springboard for the whole of sub-Saharan Africa.