Wed. Jul 24th, 2024

Minister of Electricity, Kgosientsho Ramokgopa, has announced collaborative efforts between the government and the National Transmission Company of South Africa to explore financing avenues for the expansion of transmission lines. He revealed a keen interest from the private sector in investing in this vital infrastructure project.

Ramokgopa disclosed that an estimated R390 billion would be required to finance the grid expansion. He emphasized that leveraging private sector funding for such ventures was not unprecedented in South Africa, citing similar models adopted by other nations globally.

Eskom’s analysis on the cost of grid expansion underscored the urgency, indicating a need to extend transmission lines by 14,000km over the next decade. This surge in demand surpasses the previous 10-year expansion rate of 4,000km, highlighting the pressing need for comprehensive grid enhancement.

Recognizing the critical need for increased grid capacity, Ramokgopa identified the Eastern Cape, Western Cape, and Northern Cape as priority regions for expansion efforts. These areas currently face grid constraints, hindering the connection of renewable energy projects to the national grid.

Ramokgopa stressed that neither Eskom nor the national treasury would solely fund the grid expansion. Instead, the focus lies on mobilizing private sector liquidity to supplement the financing. This approach aims to alleviate pressure on Eskom’s balance sheet and the national fiscal framework.

Addressing historical infrastructure disparities, Ramokgopa acknowledged the concentration of coal-fired power stations in the northern and eastern regions, resulting in grid imbalances.

Efforts to engage with the private sector, including discussions with the Johannesburg Stock Exchange, have already commenced. Additionally, the National Transmission Company of South Africa’s board is actively deliberating funding options, with updates promised to the public once decisions are reached.

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