Cape Town council approves R5.1 billion electricity contract with IPP company
The City of Cape Town has secured a R5.1 billion contract with an Independent Power Producer to supply electricity over 20 years, aiming to reduce tariffs and enhance energy security amid concerns over potential impacts on residents and the need for public participation.
On March 20, the Cape Town city council approved a R5.1 billion electricity contract with Make A Difference Ventures, an independent power producer (IPP) company. The 20-year agreement will supply electricity to the city and could potentially reduce tariffs and rate increases for residents. The contract will be funded through the electricity bulk purchase account.
The report stated that the contract's rates are lower than those from Eskom, and that the rate of inflation will be based on the consumer price index. ANC councillor Siyabonga Duka expressed concerns about the contract benefiting the city more than residents, and questioned whether the city would make a direct investment into the IPP project.
DA councilor Zimkhitha Sulelo dismissed claims that residents receive fewer units when purchasing electricity from the city, stating that the city needs to recover its debt and is not avoiding investment. The contract was adopted despite objections from various political parties.
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