/ 4 April 2018

Jeff Radebe signs renewable energy contracts after more than two years of delays

Jeff Radebe
Jeff Radebe is currently understood to be in Windhoek, Namibia, for a Southern African Development Community summit. (Madelene Cronje/M&G)


Energy Minister Jeff Radebe has signed R55.92-billion in contracts with 27 independent power producers after more than two years of delays on Wednesday afternoon following a delay in the morning.

The deals were initially set to be signed off at around 09.30am but officials had to do more work to finalise details of the deal, a department of energy official said.

The long-awaited partnerships have been marred by numerous delays, including a last-minute court challenge last month.

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“The signing was expected to take place this morning but has been slightly delayed. We are still finalising some details of the contracts,” said Maduna Ngobeni, project manager in the Independent Power Producer office at the department of energy.

The group of companies set to sign the contracts will generate wind power, biomass and solar energy to increase the share of clean electricity SA produces.

The signing of the deals was expected to take place last month, but hit a snag when the National Union of Metalworkers of South Africa  (Numsa) and Transform RSA approached the High Court in Pretoria in an attempt to block the partnerships. Numsa had also claimed the IPP roll-out would lead to a significant increase in the cost of electricity.

READ MORE: IPP deal would be ‘financial suicide’ ― Numsa lawyer tells court

The urgent interdict application was dismissed on late March, and the case was struck the case from the roll. This enabled the signing of the agreements to go ahead.

Capacity booster

Private sector participation in the country’s electricity industry was first approved by cabinet in 2003, in a bid to boost capacity.

Independent producers would contribute up to 30% of the country’s in electricity production, and the rest would come from state power utility Eskom.

The road to the signing of the renewable energy deals faced delays well before the court challenge, after Eskom refused to sign further agreements two years ago, citing financial woes.