Global independent power producer Sonnedix, which focuses solely on the development and operation of solar photovoltaic (PV) facilities, has earmarked South Africa as a potential core future investment destination for both projects and acquisitions.

The company, which is backed financially by long-term investors primarily from the Americas and Europe, currently has a fleet of 23 solar plants, with a combined operating capacity of over 100 MW across France, Italy, Spain, Thailand and Puerto Rico.

President Franck Constant tells Engineering News that the company will seek to build a portfolio in South Africa with a “critical mass” of between 50 MW and 100 MW over the coming few years.

He indicates, though, that part of this domestic portfolio could be derived through the acquisition of existing assets, owing to the fact that a number of investors in the country’s nascent solar sector are not necessarily long-term plant operators.

Sonnedix participated, together with local partners Mulilo Renewable Energy and Ixowave-Women in Power, in the Department of Energy’s (DoE’s) third bidding round under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), and their 75 MW Prieska solar PV project was selected as a preferred bidder.

In fact, the DoE informed another 17 renewable-energy developers last week that they had been appointed preferred bidders, following the conclusion of the round, during which it received 93 bid responses.

The combined allocation represented a potential collective installed capacity of 1 471.5 MW and was shared between seven onshore wind bidders (787 MW), six solar PV projects (450 MW), a 16.5 MW biomass pro- ject, an 18 MW landfill-gas bidder and two con- centrated solar power (CSP) bidders (200 MW).

The DoE reported that a large number of competitive responses had been submitted, par- ticularly from potential onshore wind and solar PV developers and that it was, therefore, consid- ering the appointment of additional preferred bidders for those technology categories.

An announcement regarding the possible addition of preferred bidders from the third round would be made by November 20, but the DoE stressed that “no final decision on this has been taken at this time”.

Constant has been impressed by the design of the REIPPPP, but indicates that it places a significant administrative burden, especially for small projects, on developers, which has increased barriers to entry.

However, that burden has been partially offset through a systematic allocation of capac-ity across the various renewables technologies, which, together with the competitive bidding framework, has balanced the needs of investors with government’s desire for lower tariffs.

For Sonnedix, which is pursuing oppor-tunities in jurisdictions that offer long-term, fixed-price contracts with premium customers, South Africa’s power sector policy and regulatory stability are even more attractive to the company than the country’s solar resource.

Subject to DoE approval, Constant expects acquisition opportunities to begin arising as the projects start to come into operation. How-ever, he stresses that the company’s growth strategy will be balanced between organic and acquisitive growth.