Mantashe’s RMPIPP has failed and should be terminated

Issued by Kevin Mileham MP – DA Shadow Minister of Mineral Resources and Energy
01 Apr 2022 in News

Please find an attached soundbite by Kevin Mileham MP

Minister of Mineral Resources and Energy, Gwede Mantashe’s Risk Mitigation Independent Power Producer Procurement Programme (RMPIPP), delayed for the third time, has failed and should be terminated.

In a disappointing, yet expected announcement yesterday, Mantashe revealed that the signing of power purchase agreements by preferred bidders for the 2 000MW RMPIPP has once again been postponed due to “outstanding matters and conditions with Eskom”. This is the third postponement since the last deadline extension in January 2022.

These multiple delays are essentially two wasted years by Mantashe that will keep South Africa trapped in an electricity crisis for an extended period. Independent analysts estimate that, had South Africa pursued new solar or wind energy projects during the RMPIPP time period, these projects would have been ready for commissioning by now.

Mantashe has to face the undeniable reality that his Department has made an administrative mess of the RMIPP and cannot keep delaying in perpetuity. In January 2022, DMRE’s IPP Office Acting Chief Operating Officer Maduna Ngobeni had promised that there would be consequences for preferred bidders who failed to reach financial close or commercial operation by set deadlines. With yesterday’s postponement, the obvious conclusion is that these consequences have not been effected.

That South Africa is currently going through an economically destructive energy crisis and is in urgent need of immediate workable solutions, seems lost on Mantashe and his Department. It was clear from the beginning that the cost structures from some of the bidders, such as Karpowership, were unaffordable. Still, Mantashe chose to bury his head in the sand and try to force through this discredited deal at all costs.

Bid window 5 proved beyond any doubt that renewable energy sources should be a key source of supply for South Africa’s future energy needs because they are cheaper per kWh than what Eskom produces and they can be brought online much quicker than fossil based power plants. The choice is simple, Mantashe should terminate the failed Risk Mitigation Independent Power Producer Procurement Programme and prioritise renewable energy sources. The DA repeats its call for a comprehensive parliamentary inquiry into this I’ll-conceived and badly mismanaged programme.