Minister of Electricity Kgosientsho Ramokgopa says there is an insatiable appetite for investors to pump in billions of rands to fund the expansion of the grid over the next 10 years.
The expansion of the grid will require almost R400 billion and Eskom’s balance sheet will not be able to fund this massive project.
The country needs to expand transmission lines by 14,000km in the next decade, said Ramokgopa on Tuesday when he was briefing the media.
He said one of the major global banks has raised its hand that it was willing to back the expansion programme.
He said the South African team that was attending the World Economic Forum in Davos was confident that there were investors who were willing to invest in the expansion of the grid.
The government wanted to expand the grid in coastal provinces of the Eastern Cape, Western Cape and Northern Cape.
“Unlike on the generation side, we are not waiting for the crisis to confront us, we are going to address that situation immediately. This is in support of Eskom’s work that they are already doing consistent with their transmission development plan which advocates for the expansion of the network by 14,000km in the next 10 years as opposed to the 4,000km that they have expanded in the past 10 years,” said Ramokgopa.
He said even the Integrated Resource Plan 2023 highlights the need for grid expansion.
Ramokgopa said the private sector was willing to invest in the project.
“There is insatiable appetite by the private sector to invest in the space. We are not short of financing. Liquidity is significant there. From the discussions that the team had when they were in Davos, the discussions as you know from the Just Energy Transition Investment Plan (JET-IP) programme, the discussions we have had with the heads of missions, there is significant amount of liquidity.”
From the discussions they had with the team that went to Davos they gave positive feedback. The team said international investors were keen to pump money into the project.
Ramokgopa said he even joined some of the discussions virtually on the matter.
“I joined one of the conversations virtually and one of the leading banks globally has come on board to underwrite some of these investments. Remember, what we are looking for is to free the sovereign. We don’t want to go the route of sovereign guarantees. The configuration of what the options are should really eliminate that as one of the considerations and part of the totality of the package is one of these leading global banks to say ‘no we can stand behind that’,” said Ramokgopa.
In the past, Ramokgopa has said the state will need almost R400 billion to fund the expansion of the grid.
siyabonga.mkhwanazi@inl.co.za
Politics