Law firm advises on preferred bidder status projects

"The Department of Energy (DoE) is currently seeking to procure 3 625MW of renewable energy capacity from IPPs between 2012 and 2016. The first bidding window closed in November last year and the second closed in early March this year. We are currently also advising on 13 projects that received preferred bidder status in round one and are already under mandate for round three of the programme," said Kieran Whyte, director and national head of the projects and infrastructure practice at Cliffe Dekker Hofmeyr.

"Our mandates are spread amongst acting for developers, lenders and contractors. The developers and sponsors are both South African and international, and the lenders are South African financial institutions.

Most advanced technology

"We have acted on photovoltaic, concentrated solar power, wind, hydro, biomass and landfill gas projects. Both our Cape Town and Johannesburg offices were involved in the projects across many practice areas from projects and infrastructure, project finance, environmental, corporate and commercial, intellectual property, BEE, construction and engineering, employment including immigration, tax including foreign exchange as well as customs and excise, competition, public procurement and administrative law. Teamwork has been essential," said Whyte.

Whyte said that the latest and most advanced renewable energy technology had been introduced in South Africa because of the IPP procurement programme, which was great news for the country. A long term sustainable renewable energy procurement programme would stimulate job creation and localisation opportunities.

"A continued rolling renewable energy bid programme will enhance market competition amongst developers. The successful roll-out of Bid one and two would further reduce perceived programme risk. In the past, some major equipment and EPC contractors were concerned about South African risk. Because of this programme we are seeing new developers and investors coming into the country.

Direct foreign investment

"Also, the South African energy industry is gaining valuable international experience and skills transfer, which will further enhance local capability and job creation. Another positive is direct foreign investment and the continued commitment to the IPP Procurement Programme shown by South African financial institutions," he said.

With regard to challenges that the programme faces, Whyte noted that secure grid connection arrangements were critical especially grid connection dates. Other challenges would include the implementation of the proposed Integrated Systems Operator Bill and the amendment to the existing Grid Code to allow for self-despatch of renewable power plants.

Whyte said that working with DLA Piper meant that his South African team had full access to international best practice and it had allowed them to harness additional skills set and resource capacity. "The introduction and implementation of the IPP Procurement Programme has ushered in a very exciting period for all stakeholders in the South African energy sector," he added