Gordhan’s IPP renegotiation proposal triggers ‘breach of contract’ warnings

A report indicating that the South African government may seek to renegotiate power purchase agreements (PPAs) concluded with independent power producers (IPPs) in 2011 and 2012 is raising alarm bells within the industry, which is still recovering from a protracted period of uncertainty created by Eskom’s refusal to sign new PPAs between 2015 and 2018. Business Day reported on Friday that Public Enterprises Minister Pravin Gordhan had proposed that contracts concluded during the first two bid windows of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) be renegotiated to “alleviate pressure on Eskom and the electricity tariff”.