By Lerato Mpembe
The uMkhonto weSizwe Party (MK Party) has called for full disclosure of bid-adjudication records following the awarding of a R9.5 billion energy tender to Mulilo Energy, a company chaired by former Eskom Chief Operating Officer Jan Oberholzer. The announcement, made by Electricity and Energy Minister Dr Kgosientsho Ramokgopa on Friday, 30 May 2025, named Mulilo Energy and Scatec as preferred bidders for five battery storage projects under the Battery Energy Storage Independent Power Producers Procurement Programme (BESIPPPP) Bid Window 3.t.
A Major Step Toward Energy Security
South Africa’s ongoing energy crisis, marked by frequent load shedding and reliance on costly diesel-powered generators, has placed immense pressure on the government to find sustainable solutions. The BESIPPPP, launched to enhance grid stability and reduce electricity costs, is a cornerstone of this effort. On Friday, Minister Ramokgopa announced the appointment of five preferred bidders under Bid Window 3, with Mulilo Energy securing four of the five projects and Scatec winning the remaining one. These projects, located in the Free State, will deliver 616 MW / 2,464 MWh of new battery storage capacity, with a total investment of R9.5 billion into the South African economy.
The battery storage systems (BESS) are designed to store excess energy generated during low-demand periods, such as when solar panels produce power during the day, and release it during peak demand times, like early evenings. “What we are announcing today… is another ‘peaker’ that is going to help us during the peak, instead of relying more and more on the open cycle gas turbines and on burning diesel,” Ramokgopa said at the media briefing. This shift is expected to reduce the country’s dependence on expensive fossil fuels and stabilise the national grid, which is managed by the National Transmission Company of South Africa (NTCSA).
The minister highlighted the competitive nature of the bidding process, noting that the department received 33 bid responses on 28 November 2024. The high competition led to a significant reduction in costs, with average evaluation prices dropping by 40% compared to Bid Window 1 and 8% compared to Bid Window 2. “This is part of our quest to ensure that we achieve energy security, bring down the cost of electricity – because this solution has been shown to be the most cost competitive of the energy solutions that we can have,” Ramokgopa explained. The projects are also expected to boost local economies through job creation, black shareholding, and preferential procurement.
Mulilo Energy’s Dominant Role
Mulilo Energy, a South African independent power producer (IPP) founded in 2008 by Johnny Cullum and Chris Aberdein, has emerged as a leader in the renewable energy sector. The company’s success in securing four out of five projects in Bid Window 3 follows its strong performance in Bid Window 2, where it won five out of eight projects totalling 384 MW. Mulilo’s projects are strategically located near Eskom substations in the Free State, with three of the four facilities in Bid Window 3 offering a peak output of 123 MW and 492 MWh of storage capacity each.
Mulilo’s rapid rise has been bolstered by the appointment of Jan Oberholzer as chairperson in September 2023, just two months after he parted ways with Eskom by mutual agreement. Oberholzer, who served as Eskom’s COO and was closely associated with former CEO André de Ruyter, brings extensive experience in the energy sector. “Mulilo is what South Africa needs, as it is a pivotal organisation investing in long-term, diverse, and sustainable energy solutions,” Oberholzer said upon his appointment. The company is also backed by European investors, though its team remains predominantly local, a point Ramokgopa praised as a “great South African success story.”
Mulilo’s projects align with South Africa’s broader renewable energy goals, complementing solar and wind power initiatives. The company recently reached financial close on the Ukuqala Solar Project in the Northern Cape, a 105 MWDC facility, and is developing the Kestrel Main Transmission Substation with TotalEnergies, which will be handed over to Eskom upon completion. These efforts underscore Mulilo’s commitment to addressing South Africa’s energy constraints while promoting sustainability.
MK Party’s Call for Transparency
The MK Party, led by former President Jacob Zuma, has raised concerns about the transparency of the BESIPPPP bidding process, particularly given Oberholzer’s ties to Eskom. MK Party national spokesperson Nhlamulo Ndhlela stated, “The MK Party has written formally to the minister of electricity and energy, demanding full disclosure of the bid adjudication records within seven days. Should the minister fail to comply, the MK Party will immediately approach the courts to interdict and suspend these contracts.” The party’s demand reflects broader public sentiment, with some critics on social media platforms accusing Mulilo of benefiting from “state capture” due to Oberholzer’s past role at Eskom.
The controversy has sparked debate about fairness in the allocation of government tenders, especially in a sector as critical as energy. Posts on social media have described Mulilo as a “white privileged company” and questioned why its success has not faced the same scrutiny as tenders awarded during previous administrations. The MK Party’s push for a parliamentary inquiry and potential legal action highlights the need for accountability in public procurement, particularly when billions of rands are at stake.
Economic and Social Commitments
The BESIPPPP Bid Window 3 projects come with significant economic and social commitments, designed to align with South Africa’s Broad-Based Black Economic Empowerment (B-BBEE) goals. The five preferred bidders have pledged:
• Black Shareholding: A minimum of 40% in IPP project companies, with up to 30% for construction contractors and 42% for operations contractors.
• Job Creation: 852 job opportunities for South African citizens during construction and operations, measured in job years.
• Local Content Spend: Over R3.7 billion during construction and operations phases.
• Preferential Procurement: Over R3 billion from B-BBEE companies, including R1.3 billion from black-owned enterprises, R1.1 billion from Qualifying Small Enterprises (QSEs) and Exempted Micro Enterprises (EMEs), and R562 million from black women-owned companies.
• Development Initiatives: R184 million for supplier development, skills development, bursaries for black students, support for black disabled people, enterprise development, and socio-economic initiatives over the projects’ lifetime.
These commitments aim to ensure that the benefits of the projects extend beyond energy security to economic empowerment and community development, particularly in the Free State, where the projects are located.
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