Most Read Contributor in South Africa, September 2016
The last few years have seen project developers and sponsors
investing in and developing renewable energy projects in emerging
markets. This has particularly been the case in South Africa,
following the successful Renewable Energy Independent Power
Producer Programme initiated by the Government of South Africa, as
well as the Small Projects Independent Power Producer Programme
which is now also in progress.
Project developers can now look forward to investing in and
developing solar projects in Uganda, with the advent of the Global
Energy Transfer Feed-In-Tariff "GET FiT" Uganda Programme
(the "Programme"), which is aimed at
providing clean energy to East African nations. The Programme seeks
to facilitate a reduction in CO2 emissions and to increase
electricity access to households within Africa. While the concept
of a feed-in tariff was applied to other technologies in this
Programme, this component of the Programme is based on the concept
of a combination of a competitively bid tariff and a feed-in tariff
"premium". This follows on from the successful example
set by the renewable energy programmes in South Africa Programme
which operate on the basis of a tariff determined by a competitive
Like the South African programmes, bidders will need to document
compliance with established technical, economic and financial,
environmental, social and legal requirements.
Compliance is a critical aspect of any proposal to bid for these
types of projects. The legal requirements are of particular
importance and it is imperative that potential bidders seek the
advice of experienced counsel in this regard.
The initial focus of the Program was on:
In addition to these focus areas of the Programme, the GET FiT
Solar Facility (the "Solar Facility")
was introduced in 2014. Previously, during the first round of
request for proposals under GET FiT in 2013, Solar PV was not
included as an eligible technology.
The minimum foreseen capacity benefiting from the GET FiT Solar
Facility is estimated to be at least 20 MW. Single projects must
have an installed capacity of 5 MWp, however, one bidder can be
eligible for up to two projects.
The Electricity Regulatory Authority (the
"ERA") will tender out Solar PV
concessions in which developers will be asked to bid a price per
kWh. Concessions will be awarded following a due diligence process
whereby the most cost effective bidders are selected. The selected
developers will receive an output-based GET FiT Premium Payment
(the "Premium Payment") in order to
bridge the gap between the predetermined tariff that is set by the
ERA and the offer of the selected developer, which offer would be
lower than the pre-determined tariff.
Following the Premium Payment, successful bidders will
subsequently enter into a "Developer Finance Agreement"
with the Government of Uganda. Selected bidders will be required to
sign a standardised Power Purchase Agreement
("PPA") with a duration of 20 years. An
additional benefit in being chosen as a selected bidder is the
potential eligibility for a guarantee arrangement with the World
2. BIDDING REQUIREMENTS
Eligible bidders under the Solar Facility are required to
provide the following:
an Expression of Interest ("EOI")
for developing, financing, building and operating a grid connected
solar photovoltaic power plant situated in Uganda;
documentation justifying their capacities in respect of
finances, technical expertise and project relevance experience in
order to facilitate the development, financing, building and
operation of the solar PV plant; and
evidence of effective site selection for the development and
installation of the project, such as the land co-ordinates and
EOIs must be submitted by no later than 28 March 2014 at 3pm
(EAT). This process aims to pre qualify up to 10 bidders no later
than four weeks following the bid submission date. These
shortlisted bidders will be invited to tender in early May 2014 and
in doing so will need to submit technical and financial proposals.
Bidders will be invited to propose up to two separate projects of 5
The tender process is aimed to be completed by July 2014.
The awarding of the contract, signing of the PPA and the
Developer Finance Agreement with the successful bidders is aimed to
be completed by the end of September 2014.
The IC decision is planned for October/November 2014
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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