The first successful refinancing of an independent power producer agreement has been approved and marks a concrete step in reducing the price of electricity, says the department of energy.
The ACWA Power Solafrica Bokpoort Concentrated Solar Power Power Plant has been refinanced under the initiative launched by the minister of mineral resources & energy in October 2019. The initiative will lead to a reduction of 3.2% in the tariff the project charges to Eskom.
In a statement, the department of mineral resources & energy said it has approved the refinancing on the basis of the refinancing protocol issued in July 2020, after extensive consultation with independent power producers (IPPs) and the lenders.
The initiative aims to help reduce the wholesale price of electricity as an input into the economy. The earliest rounds of IPPs under the government’s Renewable Energy Independent Power Producer’s Programme (REIPPP) have been criticised by detractors as too costly. It’s these projects, which have been up and running for a few years, that are able to be refinanced at a lower rate now that they have a proven track record and, subsequently, a better risk profile — ultimately bringing down the price of power generation.
All 64 projects that fall under bid windows 1 to 3.5 of the REIPPP were invited to participate.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.