More delays could signal problems for South Africa’s efforts to establish its first IPP with the Department of Energy announcing that its third window of bidding for renewable energy projects has been pushed back eight months. The original submission deadline for the country’s latest bid round was due in September, but now the newest target is May 2013.
Many smaller bidders are going to be strained, if not out of the competition bracket altogether as costs continue to pile up in part to the South African government’s inability to commit to previously proposed deadlines. This is on top of bidders finding it difficult to meet the country’s imposed local content guidelines.
Lance Greyling from the Ministry of Energy released a statement saying, “The Department of Energy’s recognition that ‘some potential bidders will be disappointed by the decision’ does not alleviate the economic consequences of the Department’s oscillation. But this debacle also points to the broader problem of the need for institutional reform in South Africa’s energy governance. Too many decisions are made as a function of the minister’s whim at the expense of economic growth.”
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