Press Release
The Department of Mineral Resources and Energy (DMRE) has noted with concern the continued inaccurate reporting by on-line platform Green Building Africa in relation to the appointment of an additional Preferred Bidder under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Window 6.
In an article published on 3 April 2023, the author Mr Bryan Groenendaal makes an incorrect reference that the Minister of Mineral Resources and Energy quietly appointed an additional Preferred Bidder under this last REIPPPP Bid Window, insinuating that this appointment is not above board.
The Department wishes to correct sensationalized reporting by Mr Groenendaal in this regard. In fact, the Director General appointed the 6th Preferred Bidder, the Ngonyama Solar PV project on 23rd March 2023, and confirmation of this appointment was published on all platforms as required in the PFMA procurement regulations. The Minister and Ministry is not involved in any decisions regarding the appointment of Preferred Bidders.
The appointment was confirmed after the Minister initially announced 5 Preferred Bidders on 8 December 2023, amounting to 860 MW. The Minister informed the public at that time that an eligible 6th bidder had been identified, and that the Department was in discussion with the potential bidder on conditions for appointment in order to fill the remaining gap up to 1000MW Solar PV capacity, as required by the Request for Proposal (RFP). Following further evaluation of the supplementary information provided by the potential bidder, the IPP Office and Department’s Bid Adjudication Committee recommended to the Director General the appointment of the Ngonyama Solar PV Project as the 6th Preferred Bidder under this bid window, which increased the procured MW to the maximum 1000MW Solar PV. The evaluation was conducted by the same Independent Evaluation Committee that recommended the initial 5 Preferred Bidders and was therefore entirely within the prescripts of both the RFP and the public procurement legislation.
The Department continues to assure the public that the IPP procurement process is concluded independently and strictly in line with the Constitutional principles applicable to public procurement, being Fairness, Equitability, Transparency, Competitiveness and Cost-Effectiveness, and that no individual in either the Ministry or the Department has any role in the evaluation of bids.
Background to the REIPPPP Bid Window 6
The sixth round of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP Bid Window 6) is the second bid window to be procured in response to the Second Ministerial Determination. The Bid Window called for new generation capacity of 4 200MW, made up of 3200 MW wind energy resources and 1000 MW Solar Photovoltaic energy resources.
Key milestones achieved in respect of the procurement process are as follows:
- Ministerial Determination Gazetted on 25th September 2021;
- Request for Proposals (RFP) released to market on 6th April 2022;
- Bidders’ Conference was held on 7 July 2022;
- Updated Request for Proposals (RFP) advertisement to increase MW and extend timetable on 8th September 2022
- Bid Submission Date on 3rd October 2022;
- Bid Evaluation commenced on 5th October 2022;
- 5 Preferred Bidders announced on 8th December 2022;
Africa’s Growth Remains Low, Region Looks to Tap Resource Wealth for Sustainable Development and Transition to Low-Carbon Economies
Growth across Sub-Saharan Africa remains sluggish, dragged down by uncertainty in the global economy, the underperformance of the continent’s largest economies, high inflation, and a sharp deceleration of investment growth, a World Bank report said Wednesday.
In the face of dampened growth prospects and rising debt levels, African governments must sharpen their focus on macroeconomic stability, domestic revenue mobilization, debt reduction, and productive investments to reduce extreme poverty and boost shared prosperity in the medium to long term.
Economic growth in Sub-Saharan Africa is set to slow from 3.6% in 2022 to 3.1% in 2023, according to the latest Africa’s Pulse, the World Bank’s April 2023 economic update for Sub-Saharan Africa. Economic activity in South Africa is set to weaken further in 2023 (0.5% annual growth) as the energy crisis deepens, while the growth recovery in Nigeria for 2023 (2.8%) is still fragile as oil production remains subdued. The real gross domestic product (GDP) growth of the Western and Central Africa subregion is estimated to decline to 3.4% in 2023 from 3.7% in 2022, while that of Eastern and Southern Africa declines to 3.0% in 2023 from 3.5% in 2022.
“Weak growth combined with debt vulnerabilities and dismal investment growth risks a lost decade in poverty reduction,” said Andrew Dabalen, World Bank Chief Economist for Africa. “Policy makers need to redouble efforts to curb inflation, boost domestic resource mobilization, and enact pro-growth reforms—while continuing to help the poorest households cope with the rising costs of living.”
Debt distress risks remain high with 22 countries in the region at high risk of external debt distress or in debt distress as of December 2022. Unfavorable global financial conditions have increased borrowing costs and debt service costs in Africa, diverting money from badly needed development investments and threatening macro-fiscal stability.
Stubbornly high inflation and low investment growth continue to constrain African economies. While headline inflation appears to have peaked in the past year, inflation is set to remain high at 7.5% for 2023, and above central bank target bands for most countries. Investment growth in Sub-Saharan Africa fell from 6.8% in 2010-13 to 1.6% in 2021, with a sharper slowdown in Eastern and Southern Africa than in Western and Central Africa.
Despite these challenges, many countries in the region are showing resilience amidst multiple crises. These include Kenya, Cote d’Ivoire, and the Democratic Republic of Congo (DRC) who grew at 5.2%, 6.7%, and 8.6% respectively in 2022. In the DRC, the mining sector was the main driver of growth due to an expansion in capacity and recovery in global demand. Harnessing natural resource wealth provides an opportunity to improve fiscal and debt sustainability of African countries, but the report cautions that this can only happen if countries get policies right and learn the lessons from the past boom and bust cycles.
“Rapid global decarbonization will bring significant economic opportunities to Africa,” noted James Cust, World Bank Senior Economist. “Metals and minerals will be needed in larger quantities for low carbon technologies like batteries—and with the right policies—could boost fiscal revenues, increase opportunities for regional value chains that create jobs, and accelerate economic transformation.”
In a time of energy transition and rising demand for metals and minerals, resource-rich governments have an opportunity to better leverage natural resources to finance their public programs, diversify their economy, and expand energy access. The report finds that countries could potentially more than double the average revenues that they currently collect from natural resources. Tapping these fiscal resources in the form of royalties and taxes while continuing to attract private sector investment requires the right kinds of policies, reforms, and good governance. Maximizing government revenues derived from natural resources would offer a double dividend for people and planet by increasing fiscal space and removing implicit production subsidies.