Construction work has commenced on the Oya Energy Hybrid Project, the first and largest renewable energy project of its kind in Africa. The 128 MW plant near the town of Matjiesfontein, straddling the Western and Northern Cape Provinces, combines 155 MW of solar PV power, 86 MW of wind power, and 92 MW/242 MWh of battery energy storage, all within a single location, and will provide dispatchable renewable energy for the Risk Mitigation Independent Power Producers Procurement Programme (RMIPPPP).
What many don’t know about is the behind-the-scenes work that happens to make a project of this magnitude happen. For example, from a land rights perspective, every turbine, every solar panel and every battery requires legal consideration. Navigating these complex land rights requires the expertise of a specialist law firm, and this is where Cape Town-based property law specialist, Watson Attorneys, added significant value to this project.
Watson Attorneys director, Reva Watson, says, “Essentially, for renewable energy projects to work they need the project’s rights to use the land on which the equipment is placed to be valid and secure. As it is not feasible to purchase the vast amount of land required, nor to stop the agricultural production on that land, the projects need to acquire the rights to use the land.”
To put the complexity of the land rights issue in perspective, this involves appropriately securing the right to use the land where the equipment will be built, the right to drive on the land, the right to transmit power over the land, the right to have a substation on the land and the right to access all of the above to maintain the project.
“These all form part of a complex structure of agreements essential to make this kind of project feasible. The newness of these large, complex renewable energy projects has posed challenges and meant that land rights authorities have had to rethink how leases and servitudes are registered within the country,” says Watson.
She says that these land rights are leveraged against project financing to obtain funding for the building and operation of the projects until they are producing power. “Without these rights being correct and secure, there is no project,” she says. “So we have been working closely with our client, G7 Renewable Energies, every step of the way to get this project from tender to financial close.”
As this is a very new field of expertise – if you consider the age of land rights dating back to 1811 – there are only a handful of conveyancers that have the experience and expertise to effectively register the types of rights that are required for these projects. Watson Attorneys has been involved in the securing of land rights for renewable energy projects since 2018 and has been instrumental in bringing numerous projects to financial close.
Watson says that the property law specialist has to take what the engineers want to do and structure the rights over the land accordingly, within the framework of legislation governing those rights and the land, so that the project can actually work.
“This requires extensive knowledge of what can be registered in the Deeds Office as it is often a complicated process requiring extensive consultation with the Deeds Registry and other key players such as existing holders of other rights over the property, like a bank, to ensure that the rights are registered in a manner that enables our clients’ projects to continue,” she says.
The project – which is globally unique in terms of its technology mix, size, and cost-effectiveness – represents the blueprint of a carbon neutral, 100% renewable future power grid – to provide all the power the South African economy needs without resorting to any fossil fuels. The project will deliver clean power to approximately 180,000 homes and accelerate the country’s transition to renewable power generation.
Watson says that her team was determined to see the project through because of its importance to South Africa’s power-stretched economy. “This project will counter many of the major issues attributed to the supply of renewable energy by providing reliable, low cost, on-demand power, the impact of which will be enormous,” she says.