The mayor of Maruleng Local Municipality in Limpopo, Tsheko Musolwa, has embarked on a 30-year concession agreement to bring R2.5-billion renewable energy to more than 70 000 households in the tourism town of Hoedspruit and its neighbouring villages.
Musolwa told Sunday World the project was aimed at reviving the local economy, which has suffered setbacks due to the loadshedding crisis that is crippling the country.
To jump start the R2.5-billion project, he said, the municipality has commissioned a feasibility study to determine the practical steps needed in order to achieve its goal of adding 200 megawatts to the grid.
“The 200MW immediately alleviates the community from loadshedding. The consistent power generation and supply to the businesses and households in the area will allow the municipality’s economic participants to be competitive.
“It will allow them to compete with others in terms of production and productivity. In most instances we lose many production hours to loadshedding. Any company would wish to settle in an area where the amenities are readily available,” Musolwa.
To ensure the project succeeds, he said, the municipality has signed a service level agreement with two private partners, Triviron Project Management and AM Consulting Engineers, who will be funding the project or attract investment towards the establishment of the electricity generation farm.
A third company, Kgora Afrika Fund, has been roped in as transaction advisor, he said.
Musolwa said traditional leaders in the area have been consulted to provide land for the project. “We met the traditional authorities last week and there is a great deal of excitement on their part and they are now directly involved in the development project of the municipality because this is their land.”
He said the project will be tackled in three phases, which include land suitability tests, concept development, pre-feasibility and feasibility studies and financing during the first phase.
The mayor indicated that they have already embarked on a process to identify the suitable land and how leases will work.
He said the second phase, which involves planning, will be implemented over 12 months and will cover the physical construction work.
Musolwa said the municipality’s commitment is to buy electricity from the companies once the project is in full swing.
Each of the two companies are expected to produce 100MW for the municipality. “It is very important for communities to get power generation, hence in this instance we felt that [the] unsolicited bids would create a very conducive environment.
“Private companies will benefit from the initiative by recovering their expenditure over the 30 years of the contract,” Musolwa said.
“It is very important the private sector plays a role in the development of our communities because that is the strength they have. Government is very constrained in terms of finances, so partnerships are important.”
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