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Ramokgopa asks private sector for money to end load shedding
Eskom's balance sheet is constraint, according to the Electricity Minister.
Electricity Minister Kgosientsho Ramokgopa. Picture: GCIS
Electricity Minister Kgosientsho Ramokgopa has called on businesses to help the government end load shedding.
Ramokgopa engaged with business leaders regarding South Africa’s electricity and energy challenges in Durban, KwaZulu-Natal (KZN) on Tuesday.
‘Investment is under threat’
Delivering his presentation at the Durban Exhibition Centre, Ramokgopa said load shedding as well as the logistical challenges that South Africa has been facing have had a negative impact on businesses, thus “stunting” the growth of the country’s economy.
“We do appreciate that you are facing significant headwinds… You have been going through and still continue to go through the most terrible period inflicted on your business as a result of load shedding, so we bear the responsibility for that.
“I always say to the team that as we take responsibility for the challenges that are confronting us, we are going to be the authors of the resolution of this problem,” he told those in attendance.
The minister said the potential to create more jobs was being undermined as a result of “subtractions” that are on account of load shedding.
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“So there’s more and more people sitting at home, and people are in significant distress; businesses are closing; you have to rethink your investments in this country because the state is not able to meet its primary obligation to ensure that we have got quality and reliable supply of electricity,” Ramokgopa averred.
“The point I’m making is that there is a direct correlation between load shedding, unemployment, the contraction of the South African economy, productivity, uncompetitiveness, and all the other things that undermine growth.”
Ramokgopa also stressed that load shedding posed a threat to investments made by companies such as Toyota.
“Investment is under threat if we don’t resolve the energy problem. They are going to battle, also to secure insurance as a result of the challenge, and if investment is indeed under threat, it means that jobs are under threat and the revenue base of eThekwini will also be under threat. The ability of eThekwini to collect revenue and reinvest into poor areas to build roads and to provide water will be under threat.”
Watch the event below:
‘Tap into private sector’s liquidity’
Ramokgopa emphasised that South Africa needed investors and economic growth to end the energy crisis.
In order to add more power to the grid, the minister pointed out, the private sector needed to finance the acceleration of transmission capacity.
“Eskom doesn’t have the balance sheet. Eskom’s balance sheet is a constraint.”
He further highlighted that there were renewable energy projects that were already producing electricity, but the shortfall was the lack of transmission lines, especially in the Cape provinces.
WATCH: ‘I give you my word, end of load shedding is in sight, the future is bright’ – Ramokgopa
“We need to tap into the liquidity that’s sitting with the private sector, design in such a way that the state doesn’t relinquish ownership of the transmission line, but we are getting advantage of the liquidity of the private sector.
“In the short term, we can unlock about 2 300MW of stranded electrons. That is the route that we are taking, and as the Minister, I’ll be making the necessary announcement. We already know the corridors where we are going to get this 2 335 MW,” the minister explained.
“Once we make those interventions, we get an additional 2 300MW. We don’t have to wait for 10 years. It’s the interventions that we are making now, but we need to design a bespoke financing solution to help us address the issues of transmission,” Ramokgopa concluded.
Kusile, Medupi units
Earlier, Ramokgopa assured business that Eskom’s performance in generating electricity would improve as the power utility carried out maintenance.
“We accepted that there is an inherent risk in what we are doing, and we chose to take that risk, and that’s why I talk of short-term pain and long-term gain. You will see that the system is going to become healthier and healthier as we move forward.”
The minister previously stated that Eskom’s maintenance strategy at its power stations, increased the intensity of load shedding.
He said progress was being made to return Medupi Power Station’s Unit 4 to service as part of the government’s interventions to deal with load shedding.
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Ramokgopa indicated that a second hand-generating unit, which has 15 years of life left, arrived in the country two weeks ago from the Netherlands and will be used at Medupi.
“So essentially, we purchased a second-hand unit. It’s on its way to Medupi, and we are confident that we will be synchronising it there; it will contribute 800 MW [megawatts] to the grid. We have reduced the return period of that unit by a year, so it’s coming back early in September this year.”
He further said unit 6 at Kusile Power Station will return to the grid later this year.
“There’s Unit 6 that was going to come on stream much later, but that unit is going to come on stream in November this year.”
In January, Kusile units 1, 2, and 3 returned to service after repair work on the permanent stacks, bringing a total of 3 200MW onto the grid.
This followed the successful synchronisation of Kusile’s unit 5.
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