By Lameez Omarjee and Pelane Phakgadi
None of the renewable energy projects linked to African Rainbow Energy & Power (AREP) were received directly from government, its founder and chair, Patrice Motsepe, said on Monday morning, responding to allegations of favouritism.
“We got them from the private sector in a bidding process,” said Motsepe at a media briefing in Sandton with AREP’s CEO, Brian Dames.
Motsepe added he does not support the privatisation of Eskom or “the sale of any of its assets, entities”.
“[Neither] AREP nor any company I am associated with will not participate or be part of the sale or disposal of any entities or assets of Eskom.”
Motsepe is the brother-in-law of President, Cyril Ramaphosa, who is married to Tshepo Motsepe. Energy Minister Jeff Radebe is married to Bridgette Motsepe, another one of Motsepe’s sisters.
The media briefing comes in the wake of repeated claims by the Economic Freedom Fighters that the Independent Power Producer programme is benefitting the interests of Ramaphosa’s family.
‘Perceptions of favouritism’
At the briefing, Dames said having relatives in high government positions justifiably raises perceptions of favouritism. But he said AREP had strengthened its governance processes after Ramaphosa was elected president and Radebe named minister of energy.
Reading from a press statement, Dames said the value of AREP’s share in nine current renewable energy projects is R800m (Approx. US$ 56 million). This was 3.9% of the total equity value of the R20.6bn(approx. US$1.5bn) fourth round of the Department of Energy’s Renewable Energy Independent Power Producer Programme.
The programme aims to add renewable energy to the country’s mix, create a renewable energy industry in SA, help alleviate electricity shortfalls, and cut greenhouse gas emissions.
Some unions have also opposed the introduction of IPPs, claiming renewable energy would lead to job losses in the coal sector and make energy more expensive for consumers. The National Union of Metalworkers of SA (Numsa) has called the IPP programme “disastrous”.
Dames said the total BEE equity value for round four of the programme is R8.6bn, meaning AREP’s share of R800m is less than 10%.
“It is patently clear that every single one of the nine REIPPP that AREP is participating in and has minority shareholding was acquired from privately owned companies and not the [Department of Energy],” Dames said.
Motsepe also told journalists that because AREP bid through the private sector, the company ended up paying more than the other bidders. “We paid more than the other people … We committed almost R400m of our own money,” he said.
He added that AREP has consciously avoids doing business with government.
President Ramaphosa has also had to defend himself against claims of conflicts of interests in the past.
After EFF leader, Julius Malema, inquired why government had rushed to sign the IPPs, Ramaphosa said in an oral reply to Parliament in August 2018 that he would never seek to advance interests of relatives or the interests of people close to him. He added that if there is evidence that he and Radebe were doing such, it should be brought forward.
Ramaphosa also said that the signing of the IPPs in April 2018 was not a rushed decision, as the successful bidders were selected in 2015 and the agreements were being finalised over the past three years.