The Independent Power Producer (IPP) Office has confirmed that a request for qualification will be issued in July in preparation for the first phase of the procurement of independent transmission projects (ITPs), a tender for which is scheduled to be launched in November.

The IPP Office has been given the responsibility to oversee the initial procurement and a Ministerial determination for the first phase of the programme was Gazetted on March 28 for the procurement of 1 164 km of 400 kV transmission lines across seven projects in three provinces, together with 2 630 MVA of transformers.

Successful ITP bidders would be required to develop, design, finance, build, operate, and/or maintain designated transmission facilities for the duration of a concession period, and subsequently transfer ownership to the National Transmission Company South Africa (NTCSA).

Draft regulations for ITPs are also currently out for public comment and a credit guarantee vehicle designed to mobilise private-sector capital for ITPs without adding to government’s contingent liabilities is scheduled to be launched in 2026.

In a presentation to the Portfolio Committee on Electricity and Energy on May 28 IPP Office interim head Elsa Strydom, who took up the position in May after Bernard Magoro’s contract expired, reported that lessons learned from the initial projects would guide future procurement, as well as the contracting model to be used for government’s broader ITP ambitions.

A report had been prepared following responses to a market-testing request for information, which was released in December and closed for submission at the end of February.

The expansion and strengthening of the grid by the ITPs, the presentation states, would unlock the roll-out of future IPP programmes, with the public IPP procurement programme that previously dominated the procurement landscape, which had been widened to private-to-private and wheeling-linked procurement, currently under review.

A total of 97 operational projects with a combined capacity of 7 615 MW had been procured through the IPP Office, while 14 projects with a combined capacity of 1 525 MW were under construction, and 21 projects with a capacity of 3 168 MW were said to be advancing towards financial close.

However, the public procurement programme was also facing headwinds, which Strydom listed in her presentation as including constraints in grid capacity and extended “process timelines” for securing cost estimate letters from Eskom of between 90 and 120 days, as well as the 180 days it was taking Eskom to process budget quotes for grid access.

“There’s a need to streamline and align processes to aid in managing procurement timelines,” Strydom indicated.

She also reported progress on several procurement processes, including the third battery storage bid window for 616 MW/2 464 MWh across five pre-selected substation sites where preferred bidders were due to be named on May 30.

It was also revealed that the two open-cycle gas turbine IPPs had applied for an extension of their 15-year power purchase agreements, which were due to expire in the 2030/31 financial year, as well as to convert the plants to operate on natural gas rather than diesel.