Johnathan Paoli
Finance Minister Enoch Godongwana has described the country’s energy crisis as a problem that confronts all South Africans, and disrupts production, operations and livelihoods.
Godongwana made these remarks during his presentation of the 2024 Budget speech, held in the Cape Town City Hall on Wednesday.
“Reforming the sector will result in long term energy security. We took the necessary decisions in the past five years and these are bearing fruit,” the Minister said.
In order to promote further investments in renewable energy, this budget proposed an increase in the limit for renewable energy projects that could qualify for the carbon offsets regime, from 15 megawatts to 30 megawatts, he said.
Godongwana said Eskom continued to be a key role player in the electricity sector and that the debt relief plan allowed the entity to focus on its core business.
“We will release the report on the independent review of Eskom’s coal-fired power stations in the coming week. The review was done to inform part of the conditions attached to the debt relief plan,” he said, adding that the power system remains unpredictable and unreliable, with power cuts expected to continue until the capacity shortage of 4,000 MW to 6,000 MW is addressed
The Minister confirmed that the recent recommendations would feed into Eskom’s corporate plans to bolster accountability and oversight and it was through the combination of private investment in new energy projects, rooftop solar installations and improvements in Eskom’s generation fleet that load shedding would be reduced, and reliability and security of supply improved.
In addition, Godongwana said in order to support these efforts, the government was introducing a new R2 billion conditional grant over the medium term to fund the rollout of smart prepaid meters, and that this would begin with municipalities that have been approved for debt relief.
Previously, in the 2022-2023 period, Eskom experienced a loss of R24 billion, with the utility continuing to rely on government support for liquidity due to poor generating performance, declining sales and high-debt service costs.
The minister confirmed that Eskom was allocated R78 billion in 2023-24 as part of the Eskom Debt Relief Act.
However, an amendment has been proposed to reduce allocations by R2 billion each year if Eskom does not comply with conditions.
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