The African Wind Energy Association (AfriWEA) issued a statement from its president Hermann Oelsner denouncing South Africa’s IPP procurement process. The email said that many were unaware that the National Energy Regulator of South Africa (Nersa) had changed the feed-in tariff (FIT) into a bidding process.
Oelsner said that the new bidding process was very expensive for developers, resulting in unattractive returns particularly for foreigner financiers. He said, “The only winners are the legal advisors and large companies, which can absorb any losses within their overall operations.” The president continued to describe how unsuccessful and complicated the new bidding process was and noted that those preferred bids selected in November have still yet to reach financial close.
“Since South Africa is obviously the gateway to Sub-Saharan Africa any delays in implementing projects here to generate electricity from wind, creating a new industry, jobs, and attract local and foreign investments will considerably also delay the future of Wind power in the rest of Africa,” Oelsner said.
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