South Africa: First projects from REIPPPP round 6 reach commercial close

Construction of the sites is expected to be complete within 24 months, when they will begin delivering power to South Africa’s grid operator, Eskom. Image: Den Harrson via Unsplash

The first two solar PV projects from the sixth round of South Africa’s state renewable energy tender – representing 360MW capacity – have been approved and reached commercial close.

In a public statement, the Department of Mineral Resources and Energy said that the Virginia and Doornhoek solar projects had signed project agreements and reached commercial close as of 30 April.

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The projects are included under the sixth round of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which was launched in April 2022.

Construction of the sites is expected to be complete within 24 months, when they will begin delivering power under contract with South Africa’s grid operator, Eskom.

Project breakdown

The 120MW Doornhoek project is being developed by Emirati renewable energy developer AMEA Power, alongside local South African energy companies Ziyanda Energy and Dzimuzwo Energy. AMEA Power announced the signing of a 20-year power purchase agreement (PPA) with Eskom yesterday.

The Doornhoek site – located in the North West province – represents US$120 million in investment and will receive debt funding from Standard Bank South Africa, whilst the Industrial Development Corporation (IDC) will provide equity funding for the local partners. It is AMEA Power’s first project in South Africa.

Hussain Al Nowais, chairman of AMEA Power, said: “As part of South Africa’s long-term strategy to reduce carbon emissions and enhance energy stability, the Doornhoek Solar Project will play a pivotal role in the transition towards sustainable energy solutions.”

The other project that reached commercial close was the 275MWp Virginia Solar Park, owned and developed by South African independent power producer (IPP) Red Rocket. 240MW of the site’s capacity is contracted under REIPPPP.

The Virginia project is located in the central Free State, about 140km north-east of Bloemfontein.

CEO of Red Rocket, Matteo Brambilla, said: “Red Rocket has been highly successful in REIPPPP bid windows as well as in the increasing C&I market. We are proud to be the driving force behind REIPPPP’s largest solar project to date, but not only that, we can proudly say the largest grid-connected solar farm on the continent is now in South Africa.”

REIPPPP continues

The seventh round of the REIPPPP tender was announced in December 2023, seeking 1.8GW of solar PV capacity.

The scheme was first established in 2011 to encourage private sector investment in renewable energy generation on South Africa’s grid. The country’s energy transmission system is famously unstable, and Eskom regularly schedules blackouts – also known as “load shedding” – because of a lack of generation capacity.

But previous REIPPPP auctions have been under-subscribed. The sixth round closed with 860MW of solar PV capacity awarded out of a total tendered capacity of 4,200MW, largely due to a lack of available grid capacity.

In the fifth iteration of REIPPPP, Norwegian IPP Scatec secured 273MW of capacity, on which it reached financial close in June 2023.

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