Ramokgopa's R440 billion plan to transform South Africa's energy grid with private investment
Kgosientsho Ramokgopa has announced a plan to address the country’s ongoing energy crisis through private investment.
Image: Jairus Mmutle/GCIS
Minister of Electricity and Energy Kgosientsho Ramokgopa has announced a plan to address the country’s ongoing energy crisis through private sector involvement in transmission infrastructure development.
Providing an update on the private sector’s involvement in expanding the country's power infrastructure during a press briefing on Tuesday, Ramokgopa explained that the existing transmission network was unable to keep up with the country's growing renewable energy generation, particularly in areas such as the Northern and Western Cape.
“We want to create a dispensation where we are going to accommodate the investments by private sector players on the transmission side,” Ramokgopa said.
His announcement comes after Minister of Environment, Forestry and Fisheries, Dion George, granted eight “limited emissions exemptions” to eight Eskom coal power plants on Monday.
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George had also previously slammed Eskom for consistently failing to meet minimum emission standards and delaying crucial energy reforms, pointing out that South Africans have endured rolling blackouts, rising costs, and economic stagnation due to Eskom’s inefficiencies.
Ramokgopa further explained that Eskom and government’s budgets were not in a position to support the level of investment needed to expand the transmission network, adding that a total of R440 billion was needed to modernise and expand the transmission by about 14,000 km.
"The Eskom balance sheet, the sovereign balance sheet is not sufficient to carry the kind of investments that are required in this space," Ramokgopa said.
To address this, Ramokgopa announced the launch of a pilot project under the Independent Transmission Providers (ITPs) program. This initiative will allow the private sector to finance and construct new transmission lines.
"The transmission development plan does say that we need these 14,000 kilometres of new lines to be able to unlock the capacity, especially in the Cape provinces; the Northern Cape, Eastern Cape and. Western Cape."
The Minister said the new transmission lines are expected to unlock over 3,000 megawatts of renewable energy, which has been stranded due to the lack of infrastructure.
“Our renewable energy assets are not fully exploited as a result of the constraints on the transmission side. We have exhausted all of the transmission that allows us to evacuate the electrons so that the economy can benefit from those assets,” he added.
The Minister also emphasised that the procurement process would be fair and in line with the country's procurement principles.
“We are going to procure it in accordance with the most cost-effective, fair, competitive, and equitable tendering procedures,” he said.
The initiative is expected to span over 10 years, with the first phase of the project expected to be completed by 2029.
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