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News & Press: Industry Affairs

R45-billion gas-to-power plant in Richards Bay

Wednesday, 28 March 2018   (0 Comments)
Posted by: Tasveera Singh
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Local Zululand newspaper the Zululand Observer, has reported that a R45-billion gas-to-power plant project is in the pipeline for Richards Bay.

The promise of a R45-billion development project, has understandably been met with scepticism from some quarters. Phangela Storage Tank Farm, Meerensee Lifestyle Centre and Green Hills Developments are among several anticipated projects in the area that were recently shelved.

Richards Bay Industrial Development Zone (RBIDZ) CEO Pumi Motsoahae, is confident that the project will go ahead, having stated ‘This project is definitely going to happen. I am bullish and we must all maintain a positive attitude’.

There are, however a number of processes that have to be followed before construction can commence.

Motsoahae confirmed that the IPP (Independent Power Producer) tender process is intended to commence with the issue of a Request for Qualification (RFQ) in September.

‘The envisaged gas procurement process will be formulated in accordance with the Integrated Energy Plan and the Integrated Resource Plan. These have been published for public comment, with the comment period only closing at the end of this month’ (March 2018).
It is anticipated that the issuing of the RFQ to the Request For Proposal (RFP) will take at least 10 months.

During this time, the IPP office will reveal the response submission date, announce the pre-qualified bidders, issue the approved RFP, engage between the pre-qualified bidders and Department of Energy and only then release the final RFP.

Motshoahae stated that commencement of construction of the plant will then depend on how long bidders are given to respond to the RFP.

‘It is likely to be well over six months. Bids will also need to be evaluated and a preferred bidder selected. The preferred bidder will need to reach financial close and a power purchase agreement will need to be entered into before construction can commence. This will take about two years.’

According to Motshoahae, construction will take approximately three years and he hopes that the plant will be operational in 2022.

Should the project come to fruition, in addition to being a massive boost for construction in the area, it will reportedly create more than one million full-time jobs, making the project a significant contributor to South Africa’s GDP.

Reference: Articles by Mia Moorcroft,

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