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South Africa’s political crisis offset by coal and gas IPP announcements

Buffeted by political crosswinds throughout 2016 – the fallout of charges against finance minister Pravin Gordhan was becoming clear as African Energy went to press – the selection of preferred bidders in the coal independent power producer (IPP) procurement programme and the publication of the framework for the gas IPP programme show that there is still momentum behind private investment in South Africa’s power sector. How well the programmes will withstand the latest political crisis, already manifesting itself in a fall of more than 4% in the rand against the dollar and ten-year government bond yields soaring to 8.94%, with a sovereign downgrade to junk likely to follow, remains to be seen.

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