Black Business Council
7 June 2012
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South African partner : 40 %
Local content , job creation & BEE: 30 %
Contribution towards local community
At end of window 5 – R 120 bill worth of
projects
At 3 725 MW , SA is currently one of the
biggest procurers of RE technology .
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No BBBEE Local Content procurement policy
in place.
No real Government legislation driving RE
development in South Africa (only
Government policies such as IRP2010,
IPAP,IPAP3,White paper on Renewable
Energy, etc focus on the need for RE from a
electricity demand position).
Note BBBEE is inclusive and includes all SA
business
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RE tenders should be awarded to the BEE / local partner . The BEE partner then sub contracts work to multinational companies as is the current practice in the Mining
Sector.
Awarding of licences to project developers should be subject to fulfilling BBBEE
requirements (such as skills development, preferential procurement, etc.) not only
local content .
RE project development companies should be BEE compliant and comply with
Preferential Procurement Act .
Introduce ongoing assessment on BBBEE status to ensure ongoing BEE compliance
( Cl 16.3 of RFP only makes reference to ownership ) in order for IPP to retain its
supply contract with Eskom.
Government should assist BEE companies with the acquisition of land as this is a key
requirement of the RE bid process.
This could be done in Special Economic Zones where EIA's have already been
completed and Govt can use this to create dedicated RE Special Economic Zones. The
allocation of land in such SEZ should be biased towards BEE companies.
Fast track the implementation of Green Economy Accord of COP17 conference.
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Lack of access to capital for BEE project
developers .
RE Bidding process is costly and lengthy
◦ Associated costs of RE’s feasibility phase are high
and therefore the BEE partner is at the mercy of
multinational companies.
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Economic impact will not match the World
Cup as a significant amount of the technology
will be imported.
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Funding institutions can assist by implementing
preferential funding to BEE partners.
Consider reducing the application fees and bid
bonds etc.
Bidding process needs to be simplified . E.g. RE
tenders for the 5MW projects should have a
shortened bidding period and preference be
given to small black owned enterprises.
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Continual reference to jobs created are
mostly referring to unskilled jobs – e.g.
cleaning of solar panels & security.
E.g. - One of the R 2 billion projects will only
provide 12 permanent jobs .
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Govt must require a full breakdown of jobs
to be created and the duration of such jobs
from bidders.
Govt must focus on skills transfer at the
highest level. There is a unique opportunity
to create real quality green jobs not just low
level semi-skilled jobs.
A ratio or target of skilled ,semi skilled and
unskilled jobs must be set for bidders.
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Limited understanding of the sector by BEE
companies (REDD+, CDM projects and Carbon
markets, etc)
Local content is mostly steel production, civil
works & construction.
Limited manufacturing of the RE technology
taking place in SA. Most technologies are
imported (Germany, China, etc.)
Little to no RE technical skills available in SA
especially amongst black South Africans.
No beneficiation to allow for downstream &
upstream procurement opportunities for BEE
companies.
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Factories to be established will have capacity
and skills to export products into Africa etc . It
is therefore essential that these factories
develop local black technical skills. The bid &
DFIs need to play a developmental role to build
and invest in upstream production
opportunities that will create real capacity in SA
and sustainable jobs after window 5 and a build
RE industry
Skills transfer at the highest technical level
must be a precondition of the tender .
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Government should promote off-grid RE solutions for low
income housing sector.
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Government should set the example and also adopt off grid RE
solutions on public buildings.
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SA is currently only a procurer of technology. SA must become
provider of technology especially with the demand for RE in
Africa ( 500 mill without electricity).
Encourage and assist development of local invented and
owned RE technology. RE is one of the biggest growth sectors
of the future.
Introduce SMART grid solutions for RE. In so doing each micro
installation on a roof becomes a mini wind farm or solar park.
Thank you