FEBRUARY 11, 2019 EMILIANO BELLINI
South African president Cyril Ramaphosa used his State of the Nation speech to address one of the key issues facing the country’s energy sector, the long-running financial crisis at state-owned electric utility Eskom.
The struggles of the power company have represented the main roadblock to the deployment of solar and other renewables in South Africa in recent years.
Ramaphosa said, in his speech last week, bold steps must be taken to avert a crisis at the utility. “To bring credibility to the turnaround and to position South Africa’s power sector for the future, we shall immediately embark on a process of establishing three separate entities – Generation, Transmission and Distribution – under Eskom Holdings,” the president said. “This will ensure that we isolate cost and give responsibility to each appropriate entity.”
The split, Ramaphosa said, would also enable the three new entities to better raise funding. “It is imperative that we undertake these measures without delay to stabilize Eskom’s finances, ensure security of electricity supply and establish the basis for long-term sustainability,” he added.
Despite that slowdown, 27 outstanding PPAs were signed in April and a new 1.8 GW round to be held this year was announced.
In March 2017, French development agency the AFD agreed to provide Eskom with a multi-tranche ZAR6 billion credit facility, intended for projects which are part of the utility’s grid improvement plan to integrate renewable energy and develop transnational power supply networks.