Only half of all renewable energy projects procured during Bid Window 5 have come online, with the rest unable to reach financial close due to rising borrowing costs and unsustainable tariff pricing.
4,600MW of renewable energy generation was expected to come online from Bid Window 5 in 2021. However, 12 of the 25 projects have failed to reach financial close while a further 4 are awaiting financial closure.
This leaves only 9 projects that have reached financial close from Bid Window 5.
The 12 projects that have failed to reach financial close so far are from the Ikamva Consortium, which comprises a Danish company and Patrice Motsepe’s (pictured) African Rainbow Energy, along with other local companies.
The consortium blames rising interest rates, costs of renewable technologies, and declining production of materials used to construct the plants for distorting its calculations.
However, the head of advisory at the Economic Development Platform, Maloba Tshehla, told 702 that many of these projects were too aggressively priced to win the contracts.
This made these projects unsustainable long-term as their tariffs left no space for external shocks or price increases.
“The prices quoted in bid window five were absolutely crazy even at the time of bidding,” Manie de Waal, joint CEO of Energy Partners Group, told Reuters.
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4,600MW of renewable energy generation was expected to come online from Bid Window 5 in 2021. However, 12 of the 25 projects have failed to reach financial close while a further 4 are awaiting financial closure.
This leaves only 9 projects that have reached financial close from Bid Window 5.
The 12 projects that have failed to reach financial close so far are from the Ikamva Consortium, which comprises a Danish company and Patrice Motsepe’s (pictured) African Rainbow Energy, along with other local companies.
The consortium blames rising interest rates, costs of renewable technologies, and declining production of materials used to construct the plants for distorting its calculations.
However, the head of advisory at the Economic Development Platform, Maloba Tshehla, told 702 that many of these projects were too aggressively priced to win the contracts.
This made these projects unsustainable long-term as their tariffs left no space for external shocks or price increases.
“The prices quoted in bid window five were absolutely crazy even at the time of bidding,” Manie de Waal, joint CEO of Energy Partners Group, told Reuters.
Support our members.....
Tariffs for renewable energy have been declining sharply in South Africa, with prices for electricity from wind and solar more than halving over the last decade.
However, companies proposed tariffs with razor-thin margins to win contracts offered at the bid windows.
Read more....
However, companies proposed tariffs with razor-thin margins to win contracts offered at the bid windows.
Read more....
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