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Eskom faces possible probe over failure to pen IPP contracts

The high hopes of 37 IPPs to have their contracts concluded with Eskom by April were dashed in the wake of the recent Cabinet reshuffle.

FILE: A wind farm. Picture: sxc.hu

CAPE TOWN - Eskom could be investigated over its failure to conclude certain renewable energy projects.

The signing of these contracts, procured by the Energy Department, have been postponed a number of times since last year.

Some independent power producers (IPP) have accused Eskom of deliberately delaying the process, despite its importance being highlighted by President Jacob Zuma earlier this year.

The utility has already signed more than 60 IPP contracts in previous bid windows.

The high hopes of 37 IPPs to have their contracts concluded with Eskom by April were dashed in the wake of the recent Cabinet reshuffle.

New ministers at Treasury and the Energy Departments have forced yet another delay in the process, with no new date set to sign agreements.

Complaints over the delays, initially by the South African Wind Energy Association, have led to a preliminary investigation by energy regulator Nersa.

It's understood Nersa will recommend a full probe at its next meeting later this month, to establish whether Eskom has contravened its licensing conditions by not signing the contracts as instructed by the department.

If found guilty, the utility could face a fine of up to 10% of its daily revenue.

The entire IPP programme is set to attract private investment worth approximately R194 billion in predominantly rural areas, creating thousands of jobs in the process.

(Edited by Shimoney Regter)

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