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SOUTH AFRICA Will baseload allocations in SA follow REIPPP model? South Africa’s renewable energy independent power producer programme (REIPPP) model has proven effective at lowering prices of projects round by round. The country needs to install baseload capacity, however, and it might use a similar approach. A s South Africa’s REIPPP programme begun in 2011 approaches its fourth round it looks to build on the confidence in this approach among project developers and investors. On the 26 May 2014, the South African department of energy (DoE) announced that it had issued updated bid documents for window four of the REIPPP. As was the case with bid window three there are no price caps for onshore wind and solar photovoltaic technologies, and the price caps which were set for bid window three for the remaining technologies remained unchanged. Overall 1,105 MW are to be allocated in window four as follows: • Onshore wind: 590 MW. • Solar photovoltaic: 400 MW. • Biomass: 40 MW. • Landfill gas: 15 MW. • Small hydro: 60 MW. There will be no allocation for concentrated solar power (CSP) in bid window four, as a separate bid window was designated for this purpose earlier in 2014. The time during which bidders had 16 to notify the DoE of their intention to submit a bid response for window four ended on 13 June 2014. The deadline for the registration of bids is 21 July 2014 and the bid submission date is 18 August 2014. The announcement of the preferred bidders is scheduled for 28 October 2014. Legal firm Macfarlanes says that in terms of window four all bidders that were compliant in a previous bid window but were not selected as preferred bidders based on the degree of competitiveness of their response at the evaluation stage need not, subject to certain conditions, comply with either the land or environmental requirements. It also says that window four bidders need not submit fully developed shareholders’ agreements in respect of the proposed shareholding arrangements in the project company. They also need not submit detailed heads of terms of the contracts with their contractors and equipment suppliers. Thus, as the bid windows progress and confidence is gained in the process, some of the requirements are relaxed to ease the time and cost burden on bidders of preparing a compliant bid. For window four, bidders will no longer be required to provide proof that all necessary applications including, but not limited to, land use change, subdivision, removal of restrictive conditions and zoning have been submitted. They will instead be required to provide this post-appointment as a preferred bidder. In addition, the financial criteria now create some flexibility for equity finance to be provided by investment funds and by individuals, subject to compliance with certain requirements. Bidders must provide letters of indicative support from alternative funders should the proposed funders of finance become unable to provide finance on terms stated in the bid response. The reimbursement of development costs at financial close is now considered to be a success payment and must be declared as such by bidders at bid submission. In previous bid windows, bidders were required to provide the DoE with seven hard copies and seven soft copies of the bid response; however in window four they need only provide two hard copies of the entire bid response and one soft copy. ESI AFRICA ISSUE 2 2014