Presentation on IPP procurement programme welcomed – Parliament

Committee now has a better understanding of processes that are followed in procurement of renewable energy from IPPs

Mineral Resources and Energy Committee welcomes presentation on independent power producer procurement programme

24 February 2023

The Portfolio Committee on Mineral Resources and Energy has welcomed a presentation on South Africa’s Independent Power Producer Procurement Programme, which highlighted that as of January 2023, the country has procured 11 904 megawatts (MW) of renewable energy from 134 independent power producers (IPPs).
The committee was briefed by the Department of Mineral Resources and Energy (DMRE), which said that only 6 106 MW of the 11 904 procured MW is operational and plugged into the national energy grid from 89 IPPs. The committee noted in particular the six-step procurement process facilitated by the department’s IPP Office: the development of a concept note, bid preparations and submissions, bid evaluation and approval, financial close, construction and, lastly, operation.
Other role players involved in the concept development and bid evaluation stages are Eskom, the Department of Trade, Industry and Competition, and the National Energy Regulator of South Africa.
The DMRE has signed a memorandum of agreement with the National Treasury and the Development Bank of South Africa (DBSA) to provide oversight of the IPP Office and the independent power producer procurement programme. As part of the agreement, the National Treasury manages the project development facility, while the DBSA handles procurement of goods and services, as well as the IPP Office’s human resource requirements. The IPP Office is responsible for procurement and contract management, as well as monitoring and evaluation.

The committee Chairperson Mr Sahlulele Luzipo said: “The presentation has given us background and a better understanding of the processes that are followed in the procurement of renewable energy from IPPs and the information will assist the committee to exercise an effective oversight role.”
Mr Luzipo undertook to consult with the Chairperson of the Portfolio Committee on Public Enterprises about a letter received from committee member Mr Vuyolwethu Zungula in order to establish a way forward. The letter requests the Speaker of the National Assembly to allow the two committees to summon former Eskom Chief Executive Officer, Mr André de Ruyter, to answer questions about the corruption allegations he made in the media involving Eskom.

Issued by Justice Molafo, Media Officer, Parliament, 24 February 2023