Wind Power. Picture: File
Wind Power

LANDOWNERS, mainly farmers, stand to reap huge financial rewards from the renewable energy independent power producer (IPP) procurement programme, Windlab SA MD Peter Venn said on Monday.

The Department of Energy earlier this year awarded Windlab preferred bidder status for two wind projects with a total capacity of 230MW. The renewable energy projects will provide the landowners with a consistent stream of income for 20 years. The project will sell the power to Eskom under 20-year power purchase agreements.

Mr Venn said the landowners would get a percentage of the revenue from the projects "based on the amount of energy produced from their land".

"Giving the farmers supplementary income will ensure consistent cash flow," he said.

The royalties would amount to "many thousands of rands a year", Mr Venn said.

As construction work on the first group of renewable energy projects commences, there is an expectation that the projects will boost the communities in which they are based.

Coenraad Krige, MD of Kensani Eaglestone Capital Advisory, last week said the IPP procurement programme would open a number of downstream entrepreneurial opportunities. For instance, the 48 projects in the first and second bid window would lead to investments of about R80bn, Mr Krige said.

He said it was a requirement for local communities to be shareholders in the projects.

Second, a portion of the revenue from the projects must be invested in social upliftment programmes. The construction and operational contractors were also required to procure a percentage of goods and services locally.

Kensani Capital Investments is part of a consortium developing the Letsatsi and Lesedi solar photovoltaic projects in the Free State and Northern Cape, respectively.

Kensani Capital CEO Kelley Starke–Dow said Kensani looked for long-term operational roles in its projects. These were in operations, maintenance, as well as engineering, procurement and construction. "That way you build long-term capacity, especially in a new industry like renewable energy. That is how skills are transferred and capacity built," Ms Starke-Dow said.

In the first and second bidding windows of the IPP procurement programme, Kensani Eaglestone Capital Advisory advised on more than six projects, for which it raised about R15bn of debt and equity.

Mr Krige said the company was considering a number of projects in the third bid window of the programme. It also wants to participate in the procurement programme for projects of less than 5MW.