State-owned development financier the Industrial Development Corporation (IDC) reports that it has approved funding worth R5.2-billion for 12 of the 28 preferred bidders recently identified by the Department of Energy (DoE) as part of a process to procure 3 725 MW of renewable energy capacity from independent power producers (IPPs) by 2016.

The 28 projects were among an initial batch of 53 bids submitted for the first bid window and collectively represented potential capacity of 1 415.52 MW. The preferred bidders now had until June 2012 to take their projects to financial closure.

CEO Geoffrey Qhena said the IDC had been mandated to play a central role in the deployment of government’s New Growth Path policy, which had prioritised green industries as part of a larger plan to deliver five-million jobs by 2020.

Green industries business unit head Rentia van Tonder said the projects being supported by the IDC were located in the Northern Cape, Western Cape, Eastern Cape and North West.

In total, the IDC had allocated R25-billion over the coming five years towards developing and financing industries that enhance South Africa’s transition to a green economy.

Meanwhile, Business Unity South Africa (Busa) also welcomed the DoE’s announcement, saying that it would help mobilise private sector participation more fully in electricity generation.

“Vigorous implementation of the Industrial Policy Action Plan and the Green Economy Accord - in which commitments were made to localisation by the renewable energy subsectors - will be required to ensure the job creation benefits of the IPP program are realised,” Busa said.

Under the accord, which was concluded in November, the renewable-energy industry committed to a minimum local content level of 35% for the initial roll-out of renewables projects. But it also indicated that steps would be taken to raise that level towards government's aspirational target of 75% over time.