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GENERATION CAPACITY PROCUREMENT DELAYED

08/02/2022 08:04:00 Ashmond Nzima

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MBABANE – Long wait.

As the country looks to be energy independent, the roll out of first tranche procurement programme in the new generation capacity is now behind schedule. In the past Friday’s Speech from the Throne during the opening of the 4th Session of the 11th Parliament, His Majesty King Mswati III had stressed on the need for the country to be energy independent, as the contract with South Africa’s ESKOM for imported electrcity was coming to an end. “We need to urgently step up our plans to integrate alternative sources of energy supply to the local grid. “We also need to maximise on solar energy as well as wind turbines and explore natural gas options. Hydro power generation can also make use of the abundant rains,” said the King. The King’s pronouncement came at a time when the first tranche procurement programme in the new generation capacity was derailed after the tender was challenged in the advanced stage.

Proposals

In September in the past year, this publication reported that the request for proposals (RFP) for qualified bidders in the new generation capacity first tranche procurement programme was to be started afresh. This was a ruling of an Independent Review Committee (IRC), as one of the bidders successfully challenged part of the procurement process. The review application had its genesis from an intention to award a tender contract which was issued by the Eswatini Energy Regulatory Authority (ESERA). The latter, which had been cited as the first respondent in the review matter, intended to award Globeleq Africa Holding Limited and African Clean Energy Development the tender. At the heart of the procurement process was a tender for the new generation capacity first tranche programme solar photovoltaic (circa 40 Megawatts). The first stage of the process was a request for qualification (RFQ) by ESERA to shortlist qualified bidders for the project.

The applicant identified as Voltalia SA/Semane Engineering Solutions Consortium, made the list of the successful qualifying and experienced bidders including some of the respondents that include Globeleq Africa Holding Limited. The second and main phase of the tendering process was a RFP, which was launched by ESERA in March 2020, inviting qualifying bidders to submit their bids for the project. The applicant gravamen with the tendering process only related to the RFP.

Terms

According to the terms of the RFP, each bidder was entitled to submit up to four project bids. Each project shall have a maximum export capacity between five and 15 MW as measured from point of connection. The cumulative capacity of the tenders to be awarded to the bidders in the project was circa 40MW. The applicant, who was among the bidders in the RFP process, submitted one bid for a project at Ndzevane area in the Lubombo Region for 15MW. The evaluation of the bids was carried out by the various tender committees of ESERA. At the close of the process, the applicant’s bid was not preferred. Instead it was selected as a reserve bidder project. Aggrieved by ESERA’s decision, the applicant launched an application for review with the controlling officer of the first respondent (ESERA). The application was not successful.

The applicant then launched a review application with the IRC on several grounds. The application was challenging the composition of the bid evaluation committee and award of tenders significantly in excess of the generation capacity required; among other things process. The applicant sought an order directing that the evaluation process be started afresh. Among the prayers was also an order directing ESERA to re-invite the qualified bidders to re-submit their bids in accordance with a revised RFP.

ESERA and African Clean Energy Development were opposing the grant of the relief sought by the applicant. The first ground for review was concerned with the alleged involvement of Dr Shaheen Ahmed in the evaluation of the tenders by ESERA’s bid evaluation and procurement committees. He was reportedly engaged as expert transactional advisor for the procurement programme. The applicant argued that the main challenge about his participation as a member of the tender committees was that on April 20 last year, the applicant allegedly discovered that Dr Ahmed was reportedly a Managing Director of a company styled Energy System Planning (ESP) registered in South Africa.

Globeleq Africa Holding Limited, the applicant claimed, appeared on ESP website as one of its indicative clients. The IRC ordered ESERA to submit minutes of bid evaluation, procurement as well as adjudications committee and declaration of interest forms. This was done to investigate the role played by Dr Ahmed in the tendering process. “There was no full compliance with this order by the first respondent,” claimed the IRC. In its defence, ESERA had argued that Dr Ahmed only acted as technical advisor and was not a member of the committee nor a decision maker.

Notice

The applicant had further challenged the notice of intention on grounds that two preferred bidder projects in one area (Ngwenya) were selected. After hearing both sides’ arguments, the IRC ruled that the application was succeeding partly on the basis of the first and third ground for review. The first ground related to the composition of the bid evaluating committee.
The IRC ruled that all possible conflict of interest be declared by ESERA to the bidders. The third ground for review was based on the revised RFP. The major ruling of the IRC was that ESERA was ordered to commence afresh the RFP procurement process for the qualified bidders. The ruling does not interfere with the RFQ process.

ESERA’s position and way forward was that it had thoroughly analysed the decision. It had asked all its stakeholders to be patient, as it worked towards a mutually beneficial resolution for all parties involved in the process. Following the IRC ruling, this meant a delay in the procurement process. The country is now behind schedule. Through the procurement of the different technologies outlined in the country’s Short Term Generation Plan, Eswatini is expected to generate approximately 450 Gigawatt hours (Gwh) of electricity by 2022/23. This can equate to 15 per cent of the expected electricity volumes consumed in Eswatini and can result in less reliance in imported power. Eswatini relies heavily on electricity imports to supply local demand. A need for development of local generation to reduce reliance on imports and to develop renewable energy options was identified. In July 2018, the Ministry of Natural Resources and Energy announced a new energy policy setting out that new generation capacity will be procured through competitive tendering.

Roadmap

Furthermore, the ministry launched the Energy Master Plan and Short-term Generation Expansion Plan (SGEP) in October 2018 providing a roadmap of new generation capacity to be developed in the country. The MNRE also conducted an information gathering exercise to obtain information on generation projects that the private sector is interested in developing in the country. The Eswatini Energy Regulatory Authority (ESERA), in conjunction with the MNRE, has the responsibility for procuring new generation capacity in accordance with the Electricity Act 2007.

A set of fully drafted model procurement documents that are in line with international and regional best practice (Energy Toolkit) were then prepared for the Eswatini Government through an initiative funded by the African Legal Support Facility (ALSF). The Energy Toolkit was developed to enable procurement of new generation capacity following a consistent, well managed and structured competitive tendering process. Efforts to can an update from ESERA on the revised timelines and the procurement were fruitless at the time of compiling this report.