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OPPORTUNITIES FOR WOMEN OWNED BUSINESSES IN THE REIPPP PROGRAMME Masechaba Mabilu Marion Green-Thompson

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OPPORTUNITIES FOR WOMEN OWNED BUSINESSES IN THE REIPPP PROGRAMME

Masechaba Mabilu Marion Green-Thompson

Overview of the REIPPPP ED Requirements Economic Development Elements Minimum Threshold Maximum Target Weighting

1 Job creation 12% - 50% (various indicators)

20% - 80% (various indicators)

25%

2 Local content 40%-45% (differs by technology)

65% 25%

3 Ownership (overall black ownership requirement )

12% of project shareholding

30% of project shareholding

15%

Ownership(community ownership requirements)

2.5% of project shareholding

5% of project shareholding

4 Management Control 0% 40% 5% 5 Preferential procurement 10%

BBBEE Procurement 0% 60%

QSE and EME Procurement 0% 10%

Women Owned Vendor Procurement

0% 5%

6 Enterprise Development (ED) 0% 0.6% of project revenue 5%

7 Socio-economic development (SED) 1% of project revenue 1.5% of project revenue 15%

Total 100% Total Points 30

KEY DRIVERS

Construction Phase Opportunities • Majority spend goes to the EPC contractor with a spend of on average

R1b+ over 18 months, consisting of imports and local content • It is in the local content, in particular balance of plant (civils, electrical &

other services on site) where the opportunities lie. • The 5% target for WO enterprises translates to approx. R25million per

project

However,

• Construction phase performance will reflect SA construction sector trends • SA construction sector controlled by the BIG FIVE, and are dominated by

male owned sub contactors- The businesses that are available in the construction industry use the same contractors time and again as they have a track record of on time on budget delivery

• Traditionally women owned service – travel and accommodation, catering, cleaning and security spend - are not biggest opportunity for spend although they are necessary and what IPP’s are making available for women owned businesses

Operations and Maintenance • O&M contract is the biggest • Value of remainder of services required is smaller but the

duration of contracts are longer (3 years) • Key opportunities in HV maintenance, security, facilities

management (cleaning of offices and provision of office suppliers), vegetation control, panel washing (specific for solar), waste removal, fleet services (vehicles used onsite), specialised equipment and tools, maintenance of internal roads, PPE products

The Hard Truths • Construction value chain in commercial and public sector remains

male dominated, although government tenders have created more opportunities for women

• Fronting • Boldness of male entrepreneurs vs female entrepreneurs • Dominance of males at industry networking and information sharing

events • Costing – costs generally higher than established companies

• poor economies of scale in SMMEs? • lack of capacity to cost properly? • additional margin required due to outsourcing of work to established

companies? • Supporting start-ups requires time, mentorship and training which

IPPs/EPCs have limited capacity to undertake during an 18-months construction period with high risk

• Quick start-up time required for operations also limit the ability to appoint start-ups at the beginning of the O&M period

• Onsite compliance requirements, e.g. Health and Safety, licensing, etc.

Opportunities through enterprise and socioeconomic development Economic Development Elements Minimum Threshold Maximum Target Weighting

1 Job creation 12% - 50% (various indicators)

20% - 80% (various indicators)

25%

2 Local content 40%-45% (differs by technology)

65% 25%

3 Ownership (overall black ownership requirement )

12% of project shareholding

30% of project shareholding

15%

Ownership(community ownership requirements)

2.5% of project shareholding

5% of project shareholding

4 Management Control 0% 40% 5% 5 Preferential procurement 10%

BBBEE Procurement 0% 60%

QSE and EME Procurement 0% 10%

Women Owned Vendor Procurement

0% 5%

6 Enterprise Development (ED) 0% 0.6% of project revenue 5%

7 Socio-economic development (SED) 1% of project revenue 1.5% of project revenue 15% KEY DRIVERS

Social Enterprises • “combining profit with purpose” • “social innovation” • Applying practical, innovative and sustainable approaches to

social challenges • Includes commercial (for profit) enterprise where the goods or

services provided have a social impact • E.g. kinderkinetics services to disadvantaged communities,

integrating skills development in the construction of social infrastructure, provision of internet connectivity

• Strategic alignment for RE sector: lighting retrofit at schools, clinics, etc.; installation of solar street lights and traffic lights, off grid renewable energy solutions in areas with limited access to grid electricity, SWG and heat pumps installations

QUESTIONS?