Minister of Electricity Kgosientsho Ramokgopa wants the private sector to invest in grid expansion. File Picture: GCIS
Electricity Minister Kgosientsho Ramokgopa wants government to expedite the process of finalising the financing of the transmission lines to avoid similar problems on the generation side at Eskom.
Ramokgopa said he will table his report in Cabinet in October after he met with business and various stakeholders at the JSE last week where they discussed the financing of the grid expansion.
The government would need more than R250 billion to expand the grid over the next 10 years.
But Ramokgopa, who was briefing the media on Tuesday, said they need to start investing on the grid expansion now because there are many renewable projects that have been stalled because of a lack of grid capacity.
He described the conference on the financing of transmission lines as a success.
“We had a successful transmission financing seminar where we were able to aggregate a number of financing houses, development finance institutions, commercial banks, and also pension funds that are keen on exploring opportunities on the transmission side.
“As indicated before, we are looking to ensure that we are able to tap into the liquidity that is available from the private sector to allow us 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,” said Ramokgopa.
The government wants to expand the grid by 14,000km to be able to meet the demand.
There are a number of renewable projects that are in the pipeline.
President Cyril Ramaphosa told the UN General Assembly last week that South Africa has a project pipeline of 10GW of renewable energy. But the Department of Mineral Resources and Energy is expected to process more applications for renewable energy projects in the next bid window.
Energy Minister, Gwede Mantashe told a nuclear meeting in the Eastern Cape two weeks ago that government would have to expand grid capacity in the coastal provinces of the Eastern Cape, Western Cape and Northern Cape to accommodate a number of renewable projects that have been put on hold.
In the past, the transmission lines were concentrated in the coal belt of Mpumalanga.
Ramokgopa said they need to get business to invest in grid expansion to allow renewable energy projects to be connected to the grid.
But that will require investment, as the Eskom balance sheet was not in a position to finance these projects.
“We did indicate that the transmission expansion exercise will require considerable amount of resources and we know that the Eskom balance sheet is constrained. We know that the sovereign matrix has deteriorated. It’s important that we explore the opportunities in the country so that we tap into the liquidity that is sitting with the private sector,” said Ramokgopa.
Government would need investments in transmission lines to happen speedily to avoid the problems similar to the generation side of Eskom.
The decision by government has to be taken with speed, he said.
Ramokgopa said they will put together a report to send to Cabinet on the financing of transmission lines.
siyabonga.mkhwanazi@inl.co.za
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