The South African IPP industry on Monday was shocked to learn the sudden ouster of Head of the IPP Office, Karen Breytenbach.
It has emerged that the IPP head was asked to vacate office about nine months before her contract expires. Breytenbach later confirmed that she had been dismissed by the Department of Energy (DoE) and the Development Bank of Southern Africa (DBSA) without being given any reason.
The Department of Mineral Resources and Energy released a statement saying the move was aimed at restoring stability to the office. The brief highlighted the Department of Energy, as the chair of the joint implementation committee mandated to oversee the office’s governance, requested a meeting to address issues creating operational instability at the IPP Office.
“This decision is taken approximately five months after the expiry of the contract of the Head of IPP Office. Since the expiry of the agreement, it has become clear to the Department that it is not possible to resolve the appointment of the Head of the IPP Office under the current circumstances part of it read.
Her ouster has come at a critical time when the country looks forward towards renewable energy procurement. It is a big deal because the IPP boss has championed the diversification of the country’s renewable energy in a bid to lessen the pressure for heavily indebted state utility Eskom.
Established in November 2010 by the Department of Mineral Resources and Energy, National Treasury and DBSA, the IPP office ensures a competitive, fair, and transparent procurement process. It oversees the bidding process, and so far, industry players have regarded the office as efficient, having facilitated a high level of trust between bid participants and the IPP office.
Following her ouster, energy experts have expressed concerns that the corrupt individuals could be planning to exploit the program that she worked hard to build. Breytenbach has built up the IPP office into a globally acclaimed unit drawing investment of ZAR 209 Bn in renewable energy projects since 2011.
Thomas Garner, the chair of the SA Independent Power Producers’ Association has said, “It worries me. In my opinion, this could be a move to make space for a corrupt individual to take her place and to milk the program.”
Other industry players speculate that the move to oust the respectable IPP head could be aligned to a plan by DBSA to scrap off the IPP office to form a bigger entity that will manage public-private partnerships (PPAs) across some infrastructure sectors. Experts express that the move will weaken the focus on renewables.
Democratic Alliance spokesperson Kevin Mileham said, “Breytenbach has rolled out 112 IPP projects which have saved our butts when it has come to load shedding, and the timing of this raises even more questions.”
Notably, she has championed for a diversified and sustainable energy future and has stood her ground in an industry that is often hit by poor political governance.
Anton Eberhard, a professor and expert of renewable energy who was appointed by SA president to head a team resolving financial and technical challenges in Eskom in a Twitter post noted, “Breytenbach has overseen ZAR 209 Bn worth of investment in 112 renewable energy projects since 2011 with “zero corruption.”
Breytenbach is a respected figure in South Africa and is held with high regard globally. She has overseen the development and roll-out of South Africa’s Renewable Energy Independent Power Producer Procurement Programme. The program is known to be one of the best renewables competitive bidding programs internationally.
Her departure comes at a crucial and delicate time since the government plan to increase investment in public infrastructure using the PPP model.
The introduction of independent power producers (IPPs) was partly based on the assumption that Eskom would only be able to build enough generating capacity by 2022. However, with her ouster, some experts have predicted doom, especially after the country faced a power crisis that pushed the country to a recession.
Pundits say the discharge of the IPP boss will be a “blow” and “terrible loss” for the renewable energy program citing that it sends the wrong signals to potential investors.
Thomas Garner, the chair of the SA Independent Power Producers’ Association, has cautioned that Breytenbach’s axing would have a chilling effect on investment in the renewable energy industry.
“She was excellent at her job and was incorruptible and was driving one of the best renewable energy programs in the world. Business and industry people see this as an absolute shocker.”
Featured Image Courtesy: Twitter
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