Ramokgopa eyes private funding for Eskom transmission boost

Ruling out any sovereign guarantees, Electricity Minister Kgosientsho Ramokgopa wants to beef up Eskom’s transmission line by tapping into private sector funding, in a move set to soon be given a thumbs up by Cabinet.

In what could translate into a shot in the arm for Eskom’s wholly owned National Transmission Company of South Africa subsidiary, Ramokgopa last week convened a seminar with commercial banks, financing houses, development finance institutions and pension funds to come up with a financial model – similar to Brazil and India – on transmission expansion.

Conceding during a media briefing in Pretoria, that transmission growth – also accommodating renewable energy solutions – would require considerable resources, Ramokgopa said government wanted to “tap into the available liquidity in the private sector, to allow us an opportunity to expand the grid”.

Due to “constraints on the transmission side”, there were several renewable energy solutions, currently not connected to the Eskom grid, which could be increasing the number of megawatts needed by the country.

“Taking into account that the Eskom balance sheet is constrained and that the sovereign matrix has deteriorated, expansion and strengthening of the power utility’s transmission will require huge resources,” said Ramokgopa, who is hopeful about Cabinet endorsing a new turnaround plan.

On plans to obtain equity and funding to ramp up transmission expansion, Ramokgopa said he was confident about Cabinet support, with Eskom not required to go through a parliamentary process.

“We have gathered opinions and counsel from private sector players. We have put together a report, which we will process through government structures and that includes the National Energy Crisis Committee structures,” said Ramokgopa.

“When I take it to Cabinet, it should be a document reflecting all views.

“For now, I am unable to say what position we are taking, what kind of money or financing solution will be required.

“Is it bill operating transfer or concessional? Of course, there is a bigger pool that is available to us, with the International Partners Group being there.

“Also there are issues raised by the minister of finance on Eskom going out on borrowing and obtaining the necessary approvals.

“But the speed with which we are going to make decisions is crucial to avoid sitting with a problem on transmission side – like generation.

“Speed in decision-making is something we will stress when we mean the structures.

“Finally, it is going to be government that will make that determination.”

Remarking the country’s lower stages of load shedding, Eskom generation head Bheki Nxumalo said: “We have been working on the plan for quite some time now.

“When the Kusile unit starts returning, we are expecting to remain on these lower stages of load shedding.

“We have no intention that this should increase – as Kusile returns.

“On Eskom meeting Kusile deadlines, we are ahead of the deadline, just waiting for the ministers’ approval and we should meet the current schedule.

“Units have been standing and are now ready for commissioning – it has been a year. Despite teething problems, we should meet timelines set.”