The Coal Baseload Independent Power Procurement Programme Request for Qualification and Proposals (RFP) released by the Department of Energy (DoE) allows bidders to bid cross border projects. We highlight some of the key features relating to cross border projects under the RFP.
Cross border facility and cross border project
A cross border facility is a facility which is situated in a country other than South Africa but provides power to South Africa (cross border facility).
A cross border project is a project that has a cross border facility (cross border project).
Projects that source coal, limestone or water from a resource outside of South Africa, but the facility is situated in South Africa, are not cross border projects.
Cross border projects versus domestic projects
The DoE intend issuing an addendum to the RFP to deal with cross border projects. The DoE anticipates that the process will be conducted separately to the process for domestic projects.
Cross border projects will be evaluated against each other only and not against domestic projects. The allocation for cross border projects is 600MW of the 1000MW allocated for the first phase.
Some of the legal, technical and financial qualification criteria that apply to domestic projects may be adjusted for cross border projects. Further, the economic development qualification criteria and evaluation criteria as contained in the RFP will not apply to cross border projects.
Features and requirements
Cross border projects are likely to require the following:
- The cross border facility must constitute new generation capacity as contemplated in the RFP.
- The bid response will be evaluated solely on price. It is possible that a different cap will be set for the qualification price.
- Bidders will be required to:
- include a written firm and unequivocal commitment from the host government and all utilities and agencies of that host country from and with whom consents, co-operation and support will be required for the cross border project. Particulars of how this firm commitment is to be obtained has not been detailed;
- obtain all consents, approvals and authorisations required for the project in South Africa and the host country;
- submit evidence that it has obtained the strongest rights possible under the laws of the host country over the project site on which the cross border project is located; and
- appoint legal counsel, financial and technical advisors in South Africa and the host country. The advisors will be required to give certain opinions directly to the DoE for its benefit.
- On or before the date the power purchase agreement is signed, a memorandum of understanding or arrangements must be in place between the South African government and the foreign government or international organisation. The RFP does not specify the details to be included in the memorandum of understanding or arrangements.