South Africa requires upwards of R440 billion in the next 10 years to expand its transmission infrastructure, says Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa.
Addressing the Africa Energy Indaba in Cape Town on Tuesday, the Minister said the country’s transmission development plans have identified the need to modernise and expand the grid for 14 000 kilometres in the next 10 years.
“This is going to require an enormous amount of investment. The fiscus won’t be able to carry that. The Eskom balance sheet is not sufficient, so it is important to find bespoke financing instruments to make this possible,” the Minister said.
He called on financial actors to actively take steps to significantly lower the cost of borrowing for the investment of the continent’s development, climate resilience and clean energy transition initiatives.
“We expect the increase in electricity trade volumes to grow by about 300% by 2040 and by that time, the projection is that Africa’s population will be at about two billion people from the current 1.5 billion. For us to be able to achieve this level of ambition, there are huge investments that are required.
“One of the studies done by some of the… organisations suggests that Africa will need upwards of R2.6 trillion in investments in the energy sector by 2040. The pool of financing is enormous. Even if you had to consolidate the balance sheet of the continent, I don’t think we are going to get anywhere near raising this money.
“That is why it is important that we are able to design a financing instrument for us to be able to achieve this level of ambition,” Ramokgopa said.
He expressed support for a single electricity market on the continent, as advocated for by the the African Union’s Agenda 2063.
“We think that the ambitions of achieving a single electricity market on the continent is not far-fetched .For us to have universal access by 2063, as advocated for in Agenda 2063, which makes a point that we can achieve that through regional integration… there has to be significant investment on interconnectivity,” the Minister said.
With South Africa hosting the Group of Twenty (G20) Presidency, Ramokgopa outlined the G20 technical energy group priorities, which include energy security and forging reliable and affordable access; achieving just, affordable and inclusive energy transitions, as well as African connectivity and energy pools.
These priorities were canvassed through the platform of the African Union.
According to Ramokgopa, 43% of the total population in Africa does not have access to electricity.
“This is a big issue. Before you can talk about transitioning, people need to have access to whatever form of electricity, irrespective of the fuel sources.
“As a country and the continent, we bear the responsibility to ensure that we are able to provide this access in a manner that doesn’t degrade the environment and keep to our obligations to ensure that we reduce the greenhouse gas emissions, although we contribute less than 2.5% of the CO2 emissions. Going into the future, gas will still be part of the mix on the continent,” the Minister said.
Focus on just transition
South Africa’s G20 Presidency will elevate the issue of just, affordable and inclusive energy transitions.
“That is important because we are of the opinion that there is no single transition. Any transition should take into account the unique circumstances of individual countries, and the pace and scale that they can afford.
“We will be meeting with the National Economic Development and Labour Council (Nedlac) and are hoping that the Integrated Resource Plan (IRP) will be release to the public soon. The plan will explain how we see the transitions unfold in the country,” Ramokgopa said.
South Africa’s G20 Presidency is the fourth consecutive emerging market Presidency, and it is also the first African Presidency.
It commenced on 1 December 2024 and all engagements are being held under the theme: “Solidarity, Equality, Sustainability”.
The year-long deliberations will culminate in a G20 Leaders’ Summit in November 2025.
The G20 was established to tackle pressing global economic and financial issues. Together, G20 members account for around 85% of global GDP and 75% of international trade.
It comprises 19 countries and two regional bodies, namely the European Union and the African Union.
The grouping plays a critical role in influencing global policy making and fostering global economic stability. – SAnews.gov.za
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