Zoning process in EC under spotlight

According to Quintin du Plessis, director in the real estate practice at Cliffe Dekker Hofmeyr business law firm, the RFP invited interested parties with the relevant experience, resources and know-how to submit proposals for the finance, construction, operation and maintenance of renewable energy generation facilities. This request has caused great interest amongst many potential bidders nationally and internationally, thus resulting in a high demand for farm land which will be developed by the bidders for the various renewable energy facilities under RFP.

Stringent requirements

In order for a potential bidder to meet the bid qualification criterion and secure preferred bidder status, there are stringent requirements that have to be met under the RFP. One of the most crucial requirements is having the property correctly zoned for the intended use.

"The zoning application process in the Eastern Cape has become a huge hurdle for potential bidders. The Land Use Planning Ordinance 1985 (LUPO) in its current format does not provide for a consent use or a departure which can cater adequately for renewable energy projects. This has created confusion amongst project companies and developers as to which form zoning they need to apply for," du Plessis says.

Simplifying the process

In February 2012, the Department of Local Government and Traditional Affairs in the Eastern Cape has published draft regulations which are intended to amend the Zoning Scheme Regulations made in terms of section 8 of the LUPO.

These regulations are intended to simplify the process of rezoning in the Eastern Cape by adding a definition of the term "Renewable energy structure" in the scheme regulations; providing that a renewable energy structure will be considered as a consent use in the agricultural zone "1" and in appropriate places in respect of the corresponding zones; and by providing renewable energy structure development parameters.

"Whilst the abovementioned proposed amendments to LUPO go a long way in providing clarity to project companies and developers regarding land use and zoning rights, it is important to note that the amendments are not yet in force," he adds.