Two thousand six hundred megawatts (MW) of renewable energy needs to be procured by the South African government in the fifth bid window of the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) which has just opened.
Expanded energy generation is an urgent national priority and this bid window will give Independent Power Producers (IPPs) the opportunity to pitch energy tariff offers to the government. This round comes hot on the heels of Risk Mitigation IPP Procurement Programme which closed in December 2020 and preferred bidders having been recently announced.
To assist IPPs with their projects, three of South Africa’s experienced industry specialists – Carnegie Energie, Economic Development Solutions (EDS) and SDG Legal have joined forces to create a consortium called CES Project Advisory. The consortium offers a consolidated turnkey solution providing bidders with a single service provider point of engagement from project development, through bid submission to financial close and on to COD.
“IPPs face the immense challenge of engaging with numerous companies to assist with bid preparation and compliance. This complicates the process and can result in delays and frustrations. CES Project Advisory is a unified, cost-effective solution for bidders that provides consolidated access to our collective expertise and extensive experience of over 2095 Megawatts of preferred bidders under the REIPPPP,” explains Janine Espin, the managing director of EDS.
“This consortium provides everything from legal expertise to project management, economic development, carbon tax compliance and technical management competencies to satisfy RFP bid requirements.”
Timelines are unbelievably tight
“These are high-value projects and with tight timelines and the pressure is on,” notes Chris Carnegie, the managing partner at Carnegie Energie. “The Risk Mitigation bids will need to reach financial close within four to five months. Thereafter, the projects must be built and COD achieved within 12 to 14 months. It’s clear there is no time to waste on these projects. Bidders in REIPPPP Round 5 will need assistance with everything from finalising permits to National Energy Regulator of South Africa (Nersa) applications, completing feasibility studies, finalising funding terms, and ensuring that the project can meet the local content requirements. This is where we add value. As a seamless unit, we enable bidders to make the most of the time available without having to waste anytime managing miscommunications or acting as middleman between service providers.”
Risk management is key
“By unifying competencies, we’re effectively merging disparate workstreams. Legal, technical, financial, and economic development workstreams usually run parallel to each other. If these teams struggle to reach consensus or misunderstand one another the process to rectify this can be time-consuming and counter-productive,” explains Tammy-Lynne Bekker the managing director of SDG Legal, “We offer IPPs one fluid turnkey solution to eliminate the need to source each competency separately. Bidders benefit from our collaborative approach. We work extremely well together, and we know exactly where ownership lies for every step of the process. We also have a very similar work ethic which ensures we take accountability for delivering high quality service to our client.”
“Furthermore, we have the hard-earned experience to know where the risks lie from a deliverable perspective. We also are highly competent in monitoring and managing these risks through established internal processes, in addition to the having in place the necessary professional indemnity insurance required by sponsors and financiers,” Bekker continues.
Agility is our competitive edge
To present a compliant and competitive bid, IPPs will need to evidence project viability and meet local content, environmental and other legal requirements. “This is where our agility is an advantage for IPPs,” Lize Louw, a director at SDG Legal clarifies. “When client requirements change, we don’t have to go through cumbersome the organisational hierarchies as we have the authority to immediately adapt to that change. Furthermore, we can issue the legal opinions and take care of everything necessary to ensure a project is ‘bid ready’ quickly and correctly.”
“In addition to agility and cost-effectiveness, the consortium is 100% South African-owned. We have a high degree of diversity and a large female-owned equity participation,” Espin points out, “which is an important factor in the current economic climate. We also have a deep understanding of the industry, bringing top-quality competencies to the table at a time when so many important skills are exiting the country.”
In approaching the CES Project Advisory, IPPs will benefit from existing relationship management between service providers, which can be invaluable when it comes to saving time and minimising bid compliance risk.
“As a group, we are providing a one-stop-shop to the client, eliminating the need for multiple middle-man scenarios. Our work ethic provides for uniform delivery with lower overall bid preparation costs,” Carnegie concludes.
Contact Janine Espin, Economic Development Solutions, Tel 011 447-4683