Procurement delays put South African renewables investments on hold

Written on 5 Apr 2017

Osborne Clarke are proud sponsors of inspiratia’s riskWatch which assesses the risk of investing in renewables energy projects in the most active markets globally. Please see below an extract from inspiratia’s latest report on the South African renewables market.

Since the introduction of the Integrated Recourse Plan (IRP) 2011 – 2030, the government has made great steps in the deployment of renewable energy. The Renewable Energy Independent Power Producer Programme (REIPPP), has provided a solid framework for private sector investments into the sector. However, recent delays in signing PPAs threaten the market and create uncertainty for investors. As a consequence, inspiratia’s riskWatch score has been reduced from 69.54% in Q4 2016 to 65.04% in Q1 2017, while the 12-month outlook is positive

As the continent leader in the renewable energy development, the government of South Africa introduced a number of policies to expand private sector participation, boost investments into clean energies and reduce the country’s historical reliance on hydrocarbons.

South African progress in renewable energy development is largely based on the REIPPP initiative, which was introduced by the government in 2011. Since then, the new scheme has attracted around US$15.5 billion (£12.3bn €14.4bn R201.8bn) of investments, of which more than 20% came from overseas.

So what are the policy and regulation, project drivers, macroeconomics and politics driving change in South Africa? Please contact one of Osborne Clarke’s experts below to request a full copy of the inspiratia report.

About inspiratia: inspiratia provides real-time data, forward-looking analysis, and timely market news relating to global infrastructure and renewables sectors.