Electricity Minister Kgosientsho Ramokgopa said that South Africa’s main priority is to ensure that the national grid is expanded with great urgency.
Eskom is therefore looking to improve the country's transmission network.
In order to expand the national grid, Ramokgopa believes that South African will need more than R100 billion by the beginning of the next financial year.
The minister also stressed the urgency of this budget requirement.
Ramokgopa notes that government would need more than R250 billion to expand the transmission grid over the next 10 years.
"What I want to emphasise is the speed with which we are able to make this decision. Otherwise, we are going to sit on the transmission side with the same problems we are sitting on the generation side, which is the speed of decision-making“, Ramokgopa said.
A call to the private sector
Last week Ramokgopa met with a number of business leaders at the Johannesburg Stock Exchange. He discussed the financing of the grid expansion during the South African Transmission Financing Seminar.
“We are looking to tap into the liquidity that is available from the private sector to allow us an opportunity to expand the grid so that we are able to accommodate the renewable energy solutions that have been rolled out in the country, and a number of them have not been connected to the grid as a result of the constraint on the transmission side,” Ramokgopa noted.
“The transmission expansion and strengthening exercise will require a considerable amount of resources and we know that the Eskom balance sheet is constrained and we know that the sovereign metrics have deteriorated. So it’s important that we explore opportunities for the country to tap into the liquidity that is sitting with the private sector.”
He therefore called on the private sector to help and invest in the national grid expansion.
“What we know is that the State must be a very active participant in that space and that’s why we are doing everything possible to create those conditions. For us to create those conditions, it is necessary upfront, to have an appreciation and understanding from the private sector. What are some of those conditionalities that in their own view will make it possible for them to be able to finance.”
Eskom to split into three units
Last week, the portfolio committee on Public Enterprises said that Eskom is in the process of unbundling and is aiming to establish and get operational the Distribution and Generation subsidiaries by March 2024.
It should be noted that earlier in the month, the Energy Regulator of SA (Nersa) approved that the National Transmission Company of South Africa (NTCSA) be issued with two outstanding licences.
Eskom has projected that its unbundled, wholly-owned transmission subsidiary will start operating as a full subsidiary on November 1.
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