Eskom meets with 70 private institutions over electricity crisis

 ·31 Jul 2022

Power utility Eskom met with the chief executives and top leadership from 70 private institutions on Friday (29 July) to discuss possible solutions to the energy crisis.

“The purpose of the discussions was to identify initiatives where the parties can collaborate and plant the seeds of opportunity to leverage private sector investment capacity and harvest the low-hanging fruit in the electricity industry,” said Eskom CEO Andre de Ruyter.

The chief executive shared Eskom’s strategy to address the security of power supply through increasing capacity and reducing demand.

He called on company leaders to coordinate efforts towards supporting the strategy by pursuing opportunities to make investments and realise savings benefits from the electricity industry reforms, as announced by president Cyril Ramaphosa.

The president on Monday announced measures to bring to end the country’s power crisis, Bloomberg reported.

The state scrapped a 100 megawatt limit on plants, allowing companies to build power plants of any size without a license to meet their own needs and to sell it to the grid.

The government also doubled renewable energy procurement to 5,200 megawatts.

A move that will accelerate the country’s shift from a dependence on coal for more than 80% of its power toward the use of the nation’s abundant wind and solar resources, Bloomberg said.

During the meeting on Friday, four areas were identified where the business sector could make practical contributions towards a sustainable electricity supply industry, Eskom said.

This included:

  • Opportunities to invest in own-generation projects and Independent Power Producers (IPPs) through land leasing and wheeling arrangements.
  • Encourage the usage of electricity sparingly
  • Provide support for security interventions to protect electricity infrastructure from vandalism and theft
  • Contribute to the development and alignment of enabling policies related to the Fiscus and environment, energy, and industrial sectors

President Ramaphosa’s plan literally opens the door for investors and entrepreneurs to provide solutions that can have many other indirect and positive consequences for our country, especially when it comes to creating jobs,” said JSE chief executive officer, Leila Fourie.

Eskom debt

South Africa’s plan to take over part of Eskom’s R396 billion debt is in the “the right direction,” because the power utility is “too big to fail,” Nedbank Group chief executive officer Mike Brown said.

South Africa’s Treasury is finalising a plan to take over a portion of the utility’s debt to place the struggling electricity company on a sustainable footing, Duncan Pieterse, head of assets and liability management at the National Treasury, said in an interview Wednesday, as reported by Bloomberg.

That helped lower the company’s bond yields.

“It makes absolute sense to shift a portion of Eskom’s unsustainable debt onto the government balance sheet,” Brown said in an interview in Johannesburg on Friday. “Because in all economic sense, it’s there already.”

“Electricity supply is a binding constraint to growth and job creation, and hence the president’s plan to fix that,” Brown said.

Read: Expect a massive electricity price hike to fund Ramaphosa’s energy plan: report

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