Most Read Contributor in South Africa, September 2016
1.1. The first key date for potential bidders is 14
October 2013, being the date of the First Stage 1 Process (details
of which are below).
1.2. On 21 August 2013, the Department of
Energy (the "DoE") issued The Request for Qualification
and Proposals for New Generation Capacity under the Small Projects
IPP Procurement Programme (the "RFP") under Tender No.
004/13/14, in terms of which the DoE will initially procure 100MW
in respect of the following technologies (the "Small Projects
IPP Procurement Programme"):
1.2.1. onshore wind;
1.2.2. solar photovoltaic
1.2.3. biomass; and
1.2.4. landfill gas.
1.3. The Small Projects IPP Procurement Programme is the second
programme to be initiated by the DoE, following the Request for
Qualification and Proposals for New Generation Capacity under the
IPP Procurement Programme issued in August 2013 under Tender No.
DOE/003/13/14 (the "IPP Procurement
1.4. The key distinguishing factor between the Small Projects
IPP Procurement Programme and the IPP Procurement Programme is that
the Small Projects IPP Procurement Programme is designed to procure
generation capacity from smaller renewable energy facilities in the
range of 1MW to 5MW. Additionally, the Small Projects IPP
Procurement Programme does not cater for projects utilising
concentrated solar power or small hydro technologies.
1.5. The memorandum sets out some of the key features of the
Small Projects IPP Procurement Programme.
2. BIDDING PROCESS
2.1. Unlike the IPP Procurement Programme, the process leading
up to the appointment of a bidder as a preferred bidder is a two
2.2. In the first stage, bidders are required to comply with the
"Stage 1 Qualification Criteria", by
supplying basic information about the bidder and its project. There
are no financial requirements in the Stage 1 Qualification
2.3. If the DoE is satisfied that the Stage 1 Qualification
Criteria have been met, the bidders will be appointed as
"Selected Bidders" and will thereafter
be required to comply with the "Stage 2 Qualification
Criteria", which relates to detailed legal,
environmental, land, financial, technical, economic development
information and is similar to the information required under the
IPP Procurement Programme.
2.4. Those "Stage 2 Bid Submissions"
which progress to the next stage will be evaluated, on a
comparative basis per technology, against the "Stage 2
Evaluation Criteria", which relate to price and
2.5. Bidders are required to bid two prices, being a fully
indexed price and a partially indexed price. The fully indexed
price forms part of the Stage 2 Qualification Criteria, and should
not exceed the following caps:
2.5.1. onshore wind – R1 000/MWh
2.5.2. solar photovoltaic – R1 400/MWh
2.5.3. biomass – R1 400/MWh
2.5.4. biogas – R900/MWh
2.5.5. landfill gas – R940/MWh
2.6. The indicative timeline, in respect of the first two
processes, proposed by the DoE is as follows:
2.6.1. First Stage 1 Process – 14 October 2013
2.6.2. First Stage 2 Process – 14 April 2014
2.6.3. Second Stage 1 Process – 10 February 2013
2.6.4. Second Stage 2 Process – 2 March 2015.
2.7. A bidder submitting a response under the First Stage 1
Process may elect which Stage 2 process it wishes to participate
in, and this should encourage bidders as far as possible to
participate in the First Stage 1 Process, regardless of the state
of readiness of their projects, but provided they are able to
comply with the Stage 1 Qualification Criteria.
2.8. It is also envisaged that there will be two further
processes in addition to the processes referred to above.
3. SUITE OF DOCUMENTS TO BE ENTERED INTO BY BIDDERS
3.1. A preferred bidder which reaches financial close will be
required to enter into an implementation agreement with the DoE, a
power purchase agreement with a buyer, and an Eskom distribution
agreement with Eskom or a Municipal distribution agreement with a
municipality (whichever is applicable). In addition, such preferred
bidder may also enter into a self-build agreement where the
preferred bidder will construct the connection to the system
3.2. Additionally, a preferred bidder will enter into financing
agreements and direct agreements with lenders (where its project is
financed by third party lenders), an EPC agreement with
engineering, procurement and construction contractors, an O&M
agreement with operations and maintenance contractors and a
shareholders agreement between the equity sponsors of the
3.3. The bidder will also need to obtain a generation licence
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