The South African Department of Energy (the Department) has issued certain bid documents for an Expedited Bid Window (the Expedited Bid Window) for the procurement of an additional 1,800 MW of new electricity generation capacity under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

To this end, the Department has released Part A (General Rules and Requirements), Part B (Qualification Criteria) and Part C (Evaluation Criteria) of the bid documents, with the remaining suite of documents scheduled to be released on or around 3 July 2015. As with the bid documents for previous bid windows, it is expected that the remaining bid documents for the Expedited Bid Window will include updated requirements relating to economic development, technical and general bid returnable schedules and the suite of government-side project documents.

The Expedited Bid Window is open to all projects that are ready for submission, including projects which were unsuccessful in previous bid windows.

The form and content of the bid documents are largely based on the ones for bid window 4, save for certain key differences which include: Š

  • the megawatts available under the Expedited Bid Window are to be allocated across the technologies as follows:

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  • the maximum contracted capacity for a project using concentrated solar power has been increased to 150 MW. Concentrated solar power is the only technology in respect of which the maximum contracted capacity has been increased;
  • price caps for the onshore wind and solar photovoltaic technologies have been re-introduced. The new price caps for each technology are as follows:
  • Onshore wind: R760 / MWh Solar photovoltaic:

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  • the last date for the submission of the registration of interest is 10 July 2015, the submission of which is not compulsory but is encouraged by the Department. It is important to note that the registration of interest process applies in addition to the bid registration process;
  • the purpose of the registration of interest is for the Department to gather information relating to the project location, technology, megawatts and grid connection so as to assist the Department and Eskom’s Grid Access Unit with grid connection planning for the REIPPPP; Š
  • the deadline for the registration of bids is 8 September 2015;
  • the bid submission date is 6 October 2015;
  • the announcement of preferred bidders is scheduled for 11 December 2015; Š projects, in respect of which bids are submitted under the Expedited Bid Window, must be capable of beginning commercial operation before the end of 2019; Š
  • it is mandatory for all bidders to submit their bids on the basis that all shallow connection works will be completed on a self-build basis; Š
  • a cost estimate letter to be included in a bid response must have been signed and issued by the grid provider on a date which falls after 25 June 2015;
  • bidders are required to offer one price only, based on full indexation of the price using the consumer price index;
  • in relation to the corporate and equity financing requirements, bidders are no longer required to provide details such as identities of the providers of the financing and audited financial accounts. In addition, bidders are no longer required to demonstrate compliance with the average net asset test or track record test in raising the requisite financing;
  • in previous bid windows bidders were required to list certain line items in providing a breakdown of the sources and uses of funds in the financial model. The requirement to include such line items has been removed for the purposes of the Expedited Bid Window;
  • bidders are no longer required to provide letters of support from alternative funders who would need to step-in in the event that the proposed finance providers become unable to provide the funding on the terms stated in the bid response; Š 
  • bidders are no longer required to provide compliance certificates relating to the eligibility of the technology to be used for the project; and Š
  • bidders need not demonstrate the track record or contracting capability of proposed contractors responsible for certain key project construction activities.

As stated above, the remaining bid documents are scheduled to be released on or around 3 July 2015 and this is eagerly awaited by the market in order for prospective bidders to start preparing their projects for bid submission.

The bid documents also provide an update on the Department’s intention to procure an additional 6,300 MW of new generation capacity under the REIPPPP and the small projects programme in which it is anticipated that the megawatts will be allocated as follows:

Click here to view table.

The launch of the Expedited Bid Window is part of the Department’s stated measures to accelerate and expand the REIPPPP. This will be welcomed by prospective bidders and investors as it provides the desired certainty that there will be a pipeline of renewable energy projects in South Africa’s procurement of much needed new electricity generation capacity.