Two of the projects elected under South Africa’s IPP, the 5.8-MW Adams and 5.8-MW Bellatrix solar projects, are being sponsored by the Aurora Power Group. The Aurora Power Group was founded in Cape Town by engineering brothers Simon and Chris Haw in 2009.
SOLA Future Energy, a locally owned solar PV engineering and construction firm, will design, construct and operate the plant. The Industrial Development Corp. of South Africa (IDC) and local black-owned company Mergence Investment Managers have signed a term-sheet to provide debt to the project company.
“We’re very excited to finally have a completely locally controlled, financed and constructed project,” says Chris Haw. “Up to now our participation has been limited by the size of the projects and the competition experienced from internationally backed IPP companies. Although we’ve developed 245MW of successful IPP projects with excellent partners over the previous rounds of bidding, we have had to sell or partner with larger international companies to meet the requirements of lenders and the market. Most of the engineering and construction has been done through foreign companies, despite us having the requisite skills and experience. Now everything is being done by local firms, which means all the benefits remain in South Africa”
With the larger projects in the IPP program tending to be controlled or constructed by foreign companies, the Department of Energy has been criticized for designing a program that has not supported the development of small and local South African IPP and EPC businesses up to now.
The implementation of the Small Projects IPP procurement program was meant to address this criticism. Along with a cap on project size of 5MW (roughly R110m in capex), it also requires that 60% of the ownership of the projects be in local hands and 15% owned by small-medium business enterprises. The department announced the preferred bidders on Sunday evening at the SAIREC conference in Cape Town, 11 months after the projects were submitted in November 2014.
“Despite the delay in announcement, we are delighted to have received the formal appointment as a preferred bidder and we are progressing to financial close,” says Simon Haw, Director at Aurora Power Solutions. “Going forward we hope that the process timeframes are adhered to as smaller projects of this nature are sensitive to delays.”