REIPPPP Renewable
Energy IPP Procurement Programme
The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is
South Africa's flagship competitive bidding programme for procuring electricity from private-sector
renewable energy projects. Launched in 2011 by the Department of Energy (now DMRE), it invites
independent power producers (IPPs) to bid for long-term Power Purchase Agreements (PPAs) with Eskom
to supply solar, wind, biomass, and other renewable energy to the national grid.
The programme has attracted over R256 billion in private investment, delivered more
than 7,300 MW of installed capacity across 95+ IPP projects, and driven some of the
lowest renewable energy tariffs in the world. It is managed by the IPP Office, a joint unit of the DMRE, National Treasury, and the
Development Bank of Southern Africa (DBSA).
Installed Capacity
7,336 MW
from 95 IPP projects on grid
Private Investment
R256 Billion
committed since 2011
CO2 Avoided
22.5M Tonnes
carbon dioxide reduction
Water Saved
26.6M kL
kilolitres conserved
Bid Windows at a Glance
The REIPPPP operates through successive "bid windows."
Scroll to see the full programme history.
BW 1
2011
1,416 MW
28 projects awarded
BW 2
2012
1,044 MW
19 projects awarded
BW 3
2013
1,456 MW
17 projects awarded
BW 3.5
2014
200 MW
CSP projects only
BW 4
2015
2,205 MW
26 projects awarded
BW 5
2021
2,583 MW
Preferred bidders Oct 2021
BW 6
2022
5,200 MW
6 solar PV preferred bidders
BW 7
2023/24
1,760 MW
8 solar PV preferred bidders
Bid Window 7: Latest Results
BW7 was released in December 2023, targeting up to 5,000 MW (1,800 MW solar PV and 3,200 MW
onshore wind). The DMRE received 48 bid responses totalling over 10.2 GW. In
the evaluation, 30 solar PV and 4 wind projects were found compliant. 8 solar PV
preferred bidders were appointed for a combined 1,760 MW. The DMRE is considering
additional appointments. BW7 projects committed to 49% South African equity participation, 46%
average BEE participation, 6,971 jobs, R7.8 billion in local content during construction, and R3
billion in Black Enterprise Procurement.
Eligible Technologies
Solar PV
Photovoltaic ground-mount
Onshore Wind
Wind turbines on land
Concentrated Solar
CSP thermal with storage
Small Hydro
Up to 40 MW
Biomass & Biogas
Organic waste, landfill gas
Battery Storage
Via BESIPPPP (separate)
How the Programme Works
The REIPPPP follows a structured competitive procurement
cycle for each bid window.
Step 1
DMRE Issues an RFP
The DMRE publishes a Request for Proposals specifying the technology, capacity
(MW), location constraints, evaluation criteria (price 70%, economic development 30%), and
submission deadline. A non-refundable deposit of R25,000 per project is required.
Step 2
IPPs Submit Bids
Developers submit fully bankable proposals including technical design,
financial model, tariff (price per kWh), BEE participation, local content commitments, job
creation targets, and community development plans. Bids must be fully underwritten by debt.
Step 3
Evaluation & Selection
Independent Bid Evaluation Committees assess bids under strict security. Price
counts for 70% and economic development for 30%. Preferred Bidders are announced publicly. The
evaluation typically takes 3 to 4 months after bid submission.
Step 4
Commercial Close
Preferred Bidders negotiate and sign project agreements, including a 20-year
Power Purchase Agreement (PPA) with Eskom. Financial close is reached when all conditions are
satisfied. This phase can take 6 to 12 months due to grid, permitting, and financing
complexities.
Step 5
Construction & Connection
Projects must be built and connected to the grid within 24 months of
commercial close. Eskom connects the project to its transmission or distribution network. Once
operational, the IPP sells electricity to Eskom at the agreed tariff for 20 years.
Economic Development
Commitments (BW7)
Every REIPPPP project must meet socio-economic requirements. Here are the BW7 preferred bidders'
commitments.
49%
SA Equity Participation
46%
Average BEE Participation
6,971
Job Opportunities (job years)
38.8%
Local Content (% of project cost)
R3Bn
Black Enterprise Procurement
R333M
Black Women Procurement
Grid Capacity Is the Biggest Bottleneck
The programme is 2 to 3 years behind schedule. The most significant challenge is
insufficient grid capacity in the areas where renewable energy resources are
strongest (primarily the Northern and Western Cape). In BW6, none of the wind bids were accepted
because available grid capacity had been taken by private projects. BW7 saw the same trend, with
far more solar bids received than could be accommodated. Eskom's transmission network needs
significant investment to unlock the full potential of the REIPPPP.
Battery Storage: BESIPPPP
The Battery Energy Storage Independent Power Producer Procurement Programme
(BESIPPPP) is a separate but related programme. BW2 (announced alongside REIPPPP
BW7) procures up to 615 MW of battery storage at 8 specific Eskom sites in the North West,
Gauteng, and Free State. Battery storage provides ancillary services (frequency regulation, peak
shaving) and increases available grid capacity. 31 bid responses were received and 8 preferred
bidders appointed (one per site).
Who Can Participate?
The REIPPPP is designed for large-scale project developers, investors, and energy
companies. It is not a programme for households or small businesses. To participate as
a bidder, you typically need access to significant project development capital (tens of millions of
rands minimum), engineering and technical expertise, legal and financial advisory capability, BEE
partnerships and local community engagement capacity, and environmental and grid connection
approvals.
However, the programme creates significant opportunities for local businesses, contractors,
and communities through its economic development requirements. Every project must
procure from local suppliers, invest in community development, create jobs, and include BEE
shareholders. If you are a local supplier, contractor, or community organisation near a REIPPPP
project, contact the developer or the IPP Office to learn about subcontracting and
community benefit opportunities.
Tax Incentives for Renewable Energy
Businesses investing in renewable energy (whether through the REIPPPP or for own use) can benefit
from accelerated depreciation under Section 12B of
the Income Tax Act. Solar PV installations up to 1 MW qualify for a 100% year-one
deduction. Larger installations qualify for a 50/30/20 accelerated write-off over three years.
Common Questions
Not as a bidder. The REIPPPP is for utility-scale
projects requiring significant capital (typically R500 million or more per project).
However, small businesses can benefit indirectly as subcontractors, suppliers, or
community beneficiaries of REIPPPP projects. Additionally, if you want to
generate your own electricity, you can install rooftop solar under the Section 12B tax incentive or enquire with
your municipality about small-scale embedded generation programmes.
Bids are scored on two criteria: price (70%) and
economic development (30%). Price is the tariff offered per kWh of
electricity. Economic development includes job creation, local content, BEE ownership,
community development spend, skills development, and preferential procurement. The lowest
combined score (best price + strongest ED commitments) wins. Bids must be fully underwritten
by debt to prevent underbidding.
After BW4 in 2015, Eskom refused to sign PPAs with awarded IPPs.
This effectively froze the programme for four years. Former Eskom CEO Andre de Ruyter stated
in an affidavit that this decision by predecessor CEOs exacerbated load
shedding, estimating that up to 96% of rolling blackouts could have been
avoided had those agreements been concluded. The programme restarted with BW5 in 2021.
Successful bidders sign a 20-year PPA with Eskom.
The tariff is locked in at bid time and typically adjusted for inflation over the contract
term. This long-term revenue certainty is what makes projects bankable and attractive to
lenders and investors.
BW7 preferred bidders were announced in late 2024. The DMRE has
indicated intentions to continue procuring additional renewable capacity under the
Integrated Resource Plan (IRP). Monitor the IPP Office website and
the DMRE REIPPPP page for announcements on
future bid windows. The DMRE is also considering additional capacity reallocations within
BW7 from onshore wind to solar PV.
As of the most recent data, no awarded REIPPPP project has
failed. This is considered remarkable given the scale and complexity of the
programme. It reflects the rigorous qualification and evaluation requirements, including the
mandate that all bids be fully underwritten by debt. However, some projects have experienced
significant delays, particularly those affected by the 2015 to 2019 PPA signing freeze and
grid connection challenges.
Important Links &
Resources
Official IPP Office portals, DMRE announcements, and programme documentation.
grantZA is an independent informational guide
and is not affiliated with the IPP Office, DMRE, Eskom, or any government department. For official
enquiries, contact the IPP Office at ipp-renewables.co.za.