Pretoria:The South African government has reiterated its commitment to the gas-to-power energy generation initiative, despite recent setbacks in the Gas Independent Power Producer Procurement Programme (GASIPPPP). This announcement comes in the wake of Bid Window 1 (BW1) concluding without appointing any preferred bidders, as all four submitted bids failed to meet the mandatory functional criteria.
According to South African Government News Agency, the Department of Electricity and Energy (DEE) Minister, Dr. Kgosientsho Ramokgopa, emphasized that South Africa is not retreating from its gas-to-power objectives. The minister highlighted that the first procurement process has provided valuable insights to strengthen the necessary conditions for achieving these objectives. The focus now is on addressing infrastructure, commercial, and institutional conditions to translate market interest into viable projects.
The GASIPPPP BW1 aimed to procure 2,000 MW of generation capacity, aligning with the Integrated Resource Plan (IRP) for 2019 and 2025. Despite extensive stakeholder consultations and the issuance of a revised Request for Proposals in October 2025, the bids received in May 2026 offered a total of 2,830 MW but failed to meet the RFP's requirements, particularly in providing gas supply assurances.
The DEE noted that although South Africa has potential natural gas resources, it largely relies on imports from Mozambique and lacks a liquefied natural gas (LNG) receiving terminal. This shortcoming in gas supply assurances was a critical reason why no preferred bidders were appointed in BW1. However, the department views this process as an opportunity to better structure future initiatives.
Moving forward, the DEE plans to prioritize consultations with market participants to determine the programme's future direction. Any future procurement processes will be subject to necessary approvals, with further information expected to be communicated by the end of the year. The DEE and the Independent Power Producer (IPP) Office remain committed to procurement integrity and advancing South Africa's long-term energy security through gas-to-power projects.