Cape Town IPP signs multibillion-rand agreements for onshore wind energy projects

Load shedding and the country’s energy crisis are not expected to end soon but major strides are being made in the renewable energy sector with Red Rocket, a Cape Town-based independent power producer, recently signing three multibillion-rand wind project agreements to add capacity to the national grid.

Energy minister Gwede Mantashe said the investment amount for these onshore projects was worth about R9.3 billion. This signing also signified the 100th Power Purchase Agreement (PPA) and Implementation Agreement (IA) since the IPP Procurement Programme was launched in South Africa.

Red Rocket CEO Matteo Brambilla said the Red Rocket Consortium achieved legal close for its three wind projects that would add 364MW to the Eskom grid by the end of 2024 under the long-drawn-out 5th bid window of the country’s Renewable Energy Independent Power Producer Procurement Programme.

“We have been ready, willing, and able to do our part to address the energy crisis, and have already, for several years, worked alongside the state utility provider to support the grid, both in public tenders and directly with private off-takers,” he said.

Brambilla said the agreements were concluded at the IPP Office in Centurion (on November 10) with the signing of the PPAs with Eskom and the IAs with the Department of Mineral Resources and Energy (DMRE). The IA detailed the economic development obligations of the projects.

Mantashe said 1801 job opportunities would be created through these three projects during its construction and operation periods, and R 485 million was dedicated to skills development, supplier development, enterprise development, and socio-economic development over the lifetime of the projects.

“These projects are Brandvalley Wind Farm (140MW) and Rietkloof Wind Farm (140MW) that will be located close to Laingsburg in the Western Cape, and Wolf Wind Farm (84MW) that will be located close to Jansenville in the Eastern Cape,” Mantashe said.

Brambilla said commercial close would take place with the Department and Eskom later this month, with financial close to follow shortly thereafter. Mantashe added that once financial close was reached, the construction would be completed within 24 months.

Mantashe said, “The Red Rocket projects will have 60 days to conclude all obligations and conditions precedent in the IA, in order to start drawing down on their lending agreements, and start construction.”

The department said more projects under Bid Window 5 will be signed over the coming weeks in its process to procure a total of 2600 MW renewable energy.