Name of the Project
Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP) – Bid Window 3 (BW3).

Location
Free State, South Africa.

Project Owner/s
Department of Electricity and Energy (previously the Department of Minerals Resources and Energy), and the Independent Power Producers (IPP) Office.

Project Description
The Department of Electricity and Energy released the request for proposals (RfP) for the BESIPPPP on March 28, 2024.

The RfP calls for 616 MW/2 464 MWh of battery energy storage projects allocated to five preselected substation sites in the Free State – Harvard, Leander, Theseus, Everest and Merapi – identified by Eskom.

In May 2025, South African independent power producer (IPP) Mulilo emerged as the preferred bidder across four of the sites:

• the 124 MW Bloemhoek BESS project at the Theseus substation, which had an evaluation price of R1 801.24/MWh;
• the 123 MW Erfdeel BESS project at the Everest substation, with an evaluation price of R2 157.29/MWh;
• the 123 MW Vanilla BESS project at the Harvard substation, with an evaluation price of R2 169.80/MWh; and
• the 123 MW Retreat BESS project at the Merapi substation, with an evaluation price of R2 477.86/MWh.

Scatec, of Norway, prevailed with its 123 MW Haru BESS project at the Leander substation, with a R2 037.10/MWh evaluation price.

All the projects will use lithium-ion battery technology.

Potential Job Creation
The projects are expected to create 852 job opportunities during construction and operations, and Mulilo and Scatec have also committed to invest R184-million in skills and supplier development over the lifetime of the projects, as well as socioeconomic development initiatives.

Capital Expenditure
R9.5-billion across five substation sites in the Free State.

Planned Start/End Date
The projects are expected to reach commercial close in the coming eight months and enter into commercial operation by January 2028.

Latest Developments
Interim IPP Office head Elsa Strydom has said that there has been a 40% decrease in the average evaluation prices during BW 3 when compared with those of BW 1 of 2023. That round involved five projects in the Northern Cape, four of which are under construction, with one aiming to reach commercial close in June this year.

Evaluation prices have also been 8% better than those achieved during BW 2 for eight projects in the North West province. Those projects are expected to achieve commercial close by March 2026.

Strydom has attributed the decline in costs to a combination of technology learning and South African financial institutions becoming more comfortable with battery storage.

As with the previous two bidding rounds, the projects have been procured under a 15-year power purchase agreement framework and have been evaluated primarily on price, but were also scored using socioeconomic and transformation criteria.

Electricity and Energy Minister Dr Kgosientsho Ramokgopa has said that any additional battery procurement will be based on the 2025 edition of the Integrated Resource Plan, which is being discussed at the National Economic Development and Labour Council (Nedlac).

The Nedlac process should be concluded during June. Ramokgopa is optimistic that Cabinet will approve the update before the end of July, but made no reference to ongoing disquiet over the content of the draft and unhappiness with the lack of consultation.

Besides storing mostly solar-generated electricity for use during the morning and evening peaks, the Minister has said the projects will also provide ancillary services for the National Transmission Company South Africa, which selected the five sites, as has been the case in the previous rounds.

The ancillary requirements include instantaneous reserves, regulating reserves, ten-minute reserves and supplemental reserves.

The IPP project companies will have a minimum 40% shareholding by black-empowerment entities, while there will be a minimum of 30% black shareholding by construction contractors, and up to 42% in operations contractors.

However, Ramokgopa  has expressed a desire for the emergence of fully fledged black-owned IPPs in future.

The two successful project companies have committed to preferential procurement of R3-billion from broad-based black economic-empowerment companies and to a local content spend of R3.7-billion.

Mulilo’s appointment follows on from the South African IPP's success during the second bidding round of BESIPPPP, where the company secured five BESS projects.

In a statement, Scatec said the estimated total capital expenditure for its project was R2.2-billion, which would be financed by 90% nonrecourse project debt and equity from the owners.

Scatec will own 50.01% of the equity in the project, Stanlib’s Greenstreet and Redstreet Funds owning 44.99% and a Community Trust holding 5%.

Scatec will provide engineering, procurement and construction, operations and maintenance, as well as asset management services.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Department of Electricity and Energy, tel + 27 12 406 7788 or email info@energy.gov.za.
IPP Office, email query@ipp-storage.co.za.