According to the information received from Eskom
1. (a)
The Karpowership projects are three of 11 preferred bidders selected under the Risk Mitigation IPP Programme (RMIPPP), which have applied for and been provided Budget Quotations in line with the procurement process and the associated grid application process. There is therefore no prioritisation of these projects over others.
1 (b)
Please see answer 2 below.
2. (a) and (b)
It is acknowledged that the Risk Mitigation IPP Programme has faced delays due to the changes in global economic conditions which have impacted these projects’ ability to reach commercial close. As a result, the Department of Mineral Resources and Energy (DMRE) as procurer, has communicated a long stop date for the RMIPPP of 31 December 2023, by which time the projects under this programme will have to achieve legal close. Accordingly, the Budget Quotations issued to all the remaining preferred bidders under the Risk Mitigation IPP Programme have been extended to 31 December 2023, to enable these projects to achieve legal close.
3 (a)
It is to be noted that Eskom has not concluded on the issue of reservation of capacity, thus there is no policy that defines reservation of capacity. However, in terms of section 22(2) of the Electricity Regulatory Authority (ERA), the licence holder is permitted, with the concurrence of NERSA, to discriminate for objectively justifiable and identifiable reasons. The purpose of the reservation of capacity, to the extent that it is approved by the relevant stakeholders including the Regulator, will be to secure an orderly allocation of access to the grid.
The context is that currently there is saturation of the grid by private parties. Often, private parties request access to the grid without shovel-ready projects and this prejudices those projects that can demonstrate readiness, including the government section 34 programme, which ought to go through, among others, regulatory and other approvals (e.g., PFMA), whereas private parties are not subjected to these onerous processes.
The formal IPP programmes are initiated following the section 34 determinations issued by the Minister of Mineral Resources and Energy in terms of the Electricity Regulation Act and concurred to by NERSA, which are administrative actions. The preferred bidders to these programmes therefore apply for and are provided with Budget Quotations. Any extensions to the Budget Quotation validity for the section 34 IPP preferred bidder projects are taken in line with a request from the preferred bidder and having due consideration of the time required for the attainment of certain approvals (required by either the Procurer or the Buyer) and the associated legal and financial commercial close dates as communicated by the Department of Mineral Resources and Energy.
3 (b)
Please see the response under Question 2.
Remarks: Approved / Not Approved
Jacky Molisane PJ Gordhan, MP
Acting Director-General Minister
Date: Date: