S.Africa tenders for coal-fired power plants - CNBC Africa

S.Africa tenders for coal-fired power plants

Southern Africa

by Reuters 0

South Africa tenders for coal-fired power plants. PHOTOS: Electrification Online/Eskom

This is part of a string of initiatives launched this week aimed at ending chronic electricity shortages.

(READ MORE: Africa’s electricity stability in need of a remedy)

Bidders will need to pay a non-refundable 200,000 rand ($17,000) fee when they submit proposals to build, operate and maintain the new coal plants, according to a tender notice posted in national newspapers.

The government will give the winners a power purchase agreement with struggling state utility Eskom.

South Africa has suffered its worst power shortages in six years this month due to creaking power plants and emergency maintenance. Eskom is facing a 20 billion US dollars funding shortfall over the next four years, forcing the government to consider selling state assets to bail out the utility.

(READ MORE: S.Africa faces possible electricity blackouts this winter)

The government announced on Thursday that it would launch a private sector-led coal-fired power plant programme by January 2015, which should add 2,500 megawatts of generation capacity to the grid.

It also said it would increase diesel and gas imports to fuel under-supplied plants and sign deals next week for renewable energy projects that would add an additional 1,000 MW.