SAWEA: REI4P Re-Negotiation Would Be Clear Breach of Contract

The re-negotiation of terms with successful bidders of the first two rounds of SA’s Renewable Energy Independent Power Producer Procurement Programme (REI4P) would be a clear breach of contract and damaging to investor confidence says the South African Wind Energy Association (SAWEA).

Brenda Martin, CEO of SAWEA says that investor confidence in any public-private programme is contingent on government’s consistent, assured application of procurement law. She was responding to reported informal comments by Minister Pravin Gordhan in parliament this week, that government was considering re-negotiating with companies that won the first two rounds of the REI4P in order to take the pressure off Eskom and electricity tariffs.

“Re-negotiation, besides raising the spectre of breach of contract, would require extensive and careful process to ensure fairness to affected investors while also providing sufficient assurance to prospective investors,” says Martin. “Thus far, no formal requests for re-negotiation of contracts have been received by any Round 1 preferred bidder,” she confirms.

The REI4P was initiated by government in 2011 as a premier procurement programme with the intent that climate and energy security should be addressed. The need to diversify South Africa’s energy mix as well as transition away from coal-fired power were both primary motivators for the launch of the programme.

To read the whole article, head over to the SAWEA homepage.