Eight mega-corporations battle for 300MW tender

Mbongeni Mguni | Friday October 11, 2013 15:45

The eight firms responded to the Ministry of Minerals, Energy and Water Resources Request for Expression of Interest (REOI) for potential developers of a 300 MW greenfield or new facility to be in place by 2019. The REOI was floated early in August.

Bidders under the REOI will have to specify their fuel source and location of the facility, and also be required to enter into Power Purchase Agreements (PPA) with the BPC.

On Wednesday, the Public Procurement and Asset Disposal Board (PPADB), which is facilitating the multi-billion tender, revealed the eight names of the bidders for the planned project. The REOI closed last Wednesday.

Among the bidders is the American Capital Energy and Infrastructure, an offshoot of a NASDAQ-listed private equity firm and global asset manager with total funds under management of US$119 billion (P1.02 trillion). American Capital Energy and Infrastructure has stated plans to invest between $50 million and $200 million (P430 million to P1.7 billion) in a given opportunity.

'But (we have) the capability and resources to consider investments even larger,' the company states on its website.

Another firm in the running is ACWA Power, which boasts a generation portfolio of 15,731 MW of power and investments valued at US$23 billion (P198 billion) worldwide. The Saudi Arabian company is bidding via a joint venture with the Botswana Stock Exchange-listed energy developer, African Energy Resources (AFR).

AFR had previously told shareholders it would be bidding for the 300MW greenfield via a 'power development consortium', tapping into its estimated 3.8 billion tonnes of estimated coal resources in eastern Botswana.

Japanese giant, Marubeni Corporation also has its name in the hat, bringing 50 years experience in the Independent Power Producer arena as well as assets of about 5.7 trillion Yen (P506 billion) and a net income of 206 billion Yen (P18.3 billion) as at March 2013.

India's Jindal Steel and Power, whose subsidiary snapped up the Mmamabula Energy Complex last year, is also in the race as is fellow Indian group, PPN Power and Generating Company of India, which has an installed capacity of 330.5MW.

Other bidders include IK Holdings, possibly from India, Mabesekwa Holdings, which could be a local or South African consortium, and Goldington Investment which is also possibly South African.

Of the eight bidders announced this week, three of them, being Jindal, Marubeni and ACWA, are already in the running for an earlier 300MW REOI to be built at the Morupule Coal Mine pithead and be operational by 2016 or 2017.

Criteria for the eight involved in the greenfield include the requirement that bidders should be ready to progress comprehensive feasibility studies within one year.

'It is preferable that the mine and the power block should be developed as one economic unit,' the REOI documents read.

'In this regard, the submission should clearly indicate the level of preparedness for both the mine and the power block.

'Submissions from potential IPPs should also indicate the ability to raise funds from financial institutions, as well as indicate the technology and equipment suppliers to the proposed project (mine and power block).'

Bidders will also be required to detail their planned phases of development, indicate experience in similar successfully completed projects, good standing of mineral concessions as well as other technical criteria.