Mainstream Renewable Power big winner in South Africa’s 2.5 GW renewable energy bid round

South Africa’s Minister of Mineral Resources and Energy (DMRE), Mr. Gwede Mantashe, has announced yesterday the preferred bidders for the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) Bid Window 5.

The round resulted in the selection of five consortium as preferred bidders for 25 projects totalling 2,583 MW of renewable energy. The bidders will jointly invest R50 billion in those projects, expected to reach financial close early next year and to start generating by April 2024. Out of the 2.5GW of awarded capacity, 1,608 MW will be based on onshore wind and 975 MW on solar PV.

Mainstream Renewable Power alone secured 12 projects totaling 1,274 MW (824 MW of onshore wind and 450 MW of solar PV). To date, the company has been awarded over 2.1 GW of renewable energy projects under the REIPPPP and has become the largest renewable energy developer of the country by capacity.

The company currently owns 100% of the projects awarded but ownership will transfer to the equity consortium upon financial close including Mainstream (25%), Globeleq (26%), Africa Rainbow Energy & Power (23.25%), H1 Holdings (23.25%) and Community Trusts (2.5%).

Other preferred bidders notably include Scatec with 273 MW, a Norwegian company that entered the South African energy market back in 2010 and already commissioned several solar PV projects under previous REIPPPP windows. Scatec had also secured three solar projects totaling 150 MW during the 2 GW Risk Mitigation IPP procurement programme (RMIPPPP) earlier this year.

Scatec will own 51% of the equity in the projects while its local Black Economic Empowerment partner H1 Holdings will own 46.5% and a Community Trust holding will hold the remaining 2.5%. Scatec will also be the Engineering, Procurement and Construction (EPC) provider and provide Operation & Maintenance as well as Asset Management services to the power plants.

EDF Renewables secured three projects, as did Engie and Red Rocket. Finally, the joint-venture of Mulilo and Total secured one project. Mulilo Total is already progressing two projects it has been awarded under the RMIPPPP last June, with a combined capacity of almost 275 MW.

Window 5 resulted in some of the cheapest bid price on record, making South Africa’s wind and solar energy very competitive against coal.

From 2012 to 2015, South Africa already awarded 6.3 GW of renewable energy capacity via windows 1, 2, 3, 3.5 and 4. Thousands of jobs were created, while attracting billions on foreign direct investment. While the projects from Window 4 are just reaching commissioning stage, South Africa just closed its Risk Mitigation IPP Procurement Programme (RMIPPPP), awarding another 2 GW of projects earlier this year.

Following Window 5, Window 6 is expected to be launched this year to announce the winners in May 2022, while Window 7 would be launched in 2022 to that winners are awarded in Q3 of the same year.

Finally, South Africa is also planning a storage and gas-specific windows, with the former launched in November this year while the latter would see its request for proposal issued in Q1 2022.

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Tanzania issues special mining license for world’s largest unexploited nickel deposits

Following the signing of the Framework Agreement last January, the Government of Tanzania has now issued a special mining licence (SML) for a period of over 30 years for the Kabanga Nickel project, covering the full life of the project. The Kabanga Nickel Project holds the world’s largest development-ready nickel sulphide deposit and will produce Class 1 battery grade nickel, cobalt and copper. Its cradle-to-gate operation will notably rely on the hydromet technology, which is more cost efficient than smelting but can also reduce the carbon footprint and environmental impact of operations. Based on approximately 600 km of drilling, Kabanga’s previous owners, Barrick Gold Corporation and Glencore, had published a 2014 Resource Estimate (Measured, Indicated and Inferred) of 58 million tonnes of ore at an average in-situ nickel grade of 2.62%. Mineralisation of the resource is greater than 95% massive sulphide. In order the develop the project, Kabanga Nickel and the Government of Tanzania had signed last January a Framework Agreement establishing the Tembo Nickel Corporation. The operating company is now the one in charge of mining, processing and refining the Class 1 nickel with cobalt and copper co-products. Tembo is owned at 84% by Kabanga Nickel with the remaining 16% held by the Government of Tanzania. By accelerating the development of the project, Kabanga Nickel will be increasing the supply of crucial minerals in the development and manufacture of batteries used in electric vehicles. On the back of growing demand for EV batteries, global supply of nickel is forecast to grow from 2.25 million tonnes in 2020 to 5 million tonnes by 2040, according to Roskill.

Africa’s first mRNA-based vaccine plant to be set up in Rwanda next year

German biotechnology company BioNTech has signed a Memorandum of Understanding (Mou) with the Rwandan Government and the Institut Pasteur (Dakar) to construct Africa’s first mRNA-based manufacturing facility in Rwanda next year. The agreement was signed on the sideline of the Second Ministerial Meeting of the African Union and the European Union and follows the signing of a Joint Communiqué between the same parties in Berlin last August. “We aim to accelerate the building of a GMP-certified manufacturing facility and plan to begin the construction on site in mid-2022,” said Sierk Poetting, COO of BioNTech. BioNTech’s long-term vision is to develop and grow a regional manufacturing network to support the access to vaccines manufactured in Africa. The facility in Rwanda is expected to be the first node in such a decentralized African end-to-end manufacturing network. The first production line will have a drug manufacturing capacity of 50 millions of e.g. COVID-19 vaccine does a year once operational. The capacity can then be further expanded with the addition of additional manufacturing lines and sites across the network. While BioNTech sets up the facility and staffs it, the Rwandan Development Board and the Institut Pasteur will be building up the required human resources capacity and systems to take over ownership and operational duties as soon as possible.