Eskom and The JSE

By Raine St.Claire

On 21st September 2023, Dr. Kgosientsho Ramokgopa, Minister in the Presidency for Electricity, co-hosted the South African Transmission Financing Seminar in collaboration with the Johannesburg Stock Exchange (JSE). This event brought together experts and stakeholders from the energy and financial sectors to shed light on financing and advancing South Africa’s electricity transmission infrastructure, with the aim of ensuring sustainable energy security in the nation.

Crucial Infrastructure Expansion and Collaborative Funding in South Africa's Energy Sector

The expansion of South Africa’s electricity transmission infrastructure is crucial for the integration of diverse energy sources spread across the country into the national electricity grid. Chairman of the JSE. Mr. Nhleko emphasised the importance of partnerships in finding solutions and lauded the government’s commitment to collaborating with the private sector to explore alternative funding avenues for maintaining, modernising, and expanding the national grid.

During the opening session, Minister Kgosientsho Ramokgopa addressed several key aspects. He provided an overview of South Africa’s current transmission landscape, underscoring the urgent need for expanding transmission infrastructure. The Minister also shared insights into the transmission expansion plan and upcoming projects, all while highlighting the critical challenges faced by the transmission sector.

Challenges

Estimates indicate that an amount exceeding R 250 billion is required to fund the expansion of South Africa’s grid. One of the foremost challenges discussed was the substantial financing gap that needs to be filled to facilitate the development of transmission infrastructure to align with the R184bn government debt relief package.

Due to insufficient investment in the transmission system, government financial constraints, and governance deficiencies, Eskom has experienced delays in investing in the maintenance, refurbishment, and expansion of the national grid infrastructure.

Discussions On Transmission Network Expansion And Sustainability

The confidential discussions were organised into four principal focus areas in adherence to the Chatham House Rules:

• Exploration of diverse financing requirements for transmission network expansion and modernisation.

• Consideration of potential solutions to address the pressing challenges within the transmission sector.

• Central theme: Balancing long-term socio-economic interests with sustainability commitments and international climate change obligations.

“The conversations were able to provide insights of how peer countries which had our similar challenges were able to resolve their electricity problems and the possible ways to finance grid expansion”.-Minister Kgosientsho Ramokgopa.

Central Topics Tackled

The key thematic aspects addressed during the event included:

• Fostering collaboration between the private sector and government

• Evaluating the extent of available financial resources

• Assessing the scale of financial resources

• Drawing insights from international experiences

• Enhancing local resilience

• Building local capacity

• Developing local expertise

Minister Ramokgopa described the event as a valuable platform for sharing insights into how peer countries, facing similar challenges, have successfully addressed their electricity-related issues and explored potential avenues for financing grid expansion.