Johnathan Paoli
Electricity Minister Kgosientsho Ramokgopa says the government’s financial structure to facilitate private investment into the country’s transmission infrastructure is being consolidated under his Ministry, including the work being done by the National Treasury and the International Finance Corporation (IFC).
Ramokgopa said at a briefing on the implementation of the Energy Action Plan on Monday that over the last year, the country had endured 1 200 hours of load shedding, compared with 1 800 over the previous period.
He said that his Ministry had been working with the National Treasury, the IFC and others on what he termed an “EPC plus F” concept, involving the engineering, procurement, construction plus financing of new transmission infrastructure.
Ramokgopa said that Eskom had been able to produce 3,510 megawatts over the past year and highlighted that one of the key pillars of addressing South Africa’s energy crisis has been to focus on investing in planned maintenance.
He said that the plan was being coordinated under his auspices with the intention of settling on a way to structure such transactions without the need for government guarantees or undermining the National Transmission Company South Africa (NTCSA), the grid and system operator currently being established as an independent entity under Eskom Holdings.
“I’m confident that within the next two weeks I will be coming back to the country to say: ‘This is how we are going to progress’,” Ramokgopa said.
The Minister said that he remained confident that there was funding available for developing new grid infrastructure based on a build, own, operate and transfer model used internationally, which would be “domesticated” for the South African context, including the policy that the NTCSA remained the sole system operator and the custodian of the grid.
Ramaphosa said that prior to the appointment of the NTSCA board earlier this year, the transmission procurement agency might be located within either the Development Bank of Southern Africa or the Industrial Development Corporation; and that the NTCSA already had a Transmission Development Plan and any private sector participation would be guided by that plan with the intention of accelerating implementation.
The Minister said that there was an ambition to channel concessional and grant funding towards transmission projects, especially the nearly $12-billion in funding committed to the Just Energy Transition Partnership Implementation Plan; and that to date, this funding has not been integrated with physical projects, with most of the concessional loans approved to date having flowed into the general fiscus as ‘policy loans’.
“We are not sitting with a money problem; we are sitting with a structuring problem … and we are at an advanced stage on finalising that structure,” Ramokgopa insisted
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