South Africa extends financial close deadline for RMIPPPP projects

South Africa’s Department of Mineral Resources and Energy (DMRE) has extended the financial close deadline for projects awarded under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPPP) to end of March 2022. 

The deadline extension comes after the South African High Court dismissed with costs an application by one of the losing bidders, DNG Power Holdings (Pty) Ltd, which sought to set aside the appointment of preferred bidders under the programme. 

The RMIPPPP is an emergency program to supply 2 000 megawatts of power to South Africa’s grid to cover the energy supply deficit in the system. DNG contested the awarding of the majority of the bids to Karpowership, a Turkish company which was contracted to supply 1,220 megawatts of power for 20 years at a cost of R218 billion.

“The demonstrable reason for DNG’s unsuccessful bids was because it failed to meet a myriad” qualification criteria, judge Joseph Raulinga said in his judgement. The company also submitted additional documents without getting the correct permission from the court, he said.

DNG Energy was seeking to supply power through gas-fired plants. Karpowership is looking to supply power from three gas-fired power plants retrofitted on ships. The projects were denied environmental authorization from South Africa’s Department of Forestry, Fisheries and the Environment (DFFE) last year and would need the authorisation to proceed.

The judgement now allows the bid winners awarded projects under the programme to go ahead with financial close and commence project development. Other winners in the programme include Scatec ASA, Electricite de France SA and TotalEnergies SE, who are looking to build solar and solar-wind hybrid power plants.

“The court decision enables the Government and Eskom to finalise its governance and regulatory approval processes to conclude financial close with RMIPPPP Preferred Bidders by end March 2022,” said DMRE in a statement earlier today. 

“It is expected that these projects will be operational and ready to deliver much needed generation capacity to the national grid starting 12 months from Financial Close,” DMRE concluded.