SA needs more private investment in power sector, says Mteto Nyati
Eskom chair says the utility does not have the R350bn needed to build transmission infrastructure
SA’s power sector requires increased private sector investment as debt-ridden Eskom implements structural reforms and builds critical new infrastructure, Eskom chair Mteto Nyati said.
Private sector involvement in the power sector is a politically sensitive subject ahead of the May 29 national and provincial elections, and Nyati is adamant the state-owned enterprise will not be moving towards privatisation.
“Private sector participation, yes, but the asset is going to end up with the government,” Nyati said.
Amid persistent load-shedding, the government is working to add generating capacity, largely through deals with private companies operating solar and wind projects.
However, Nyati said the capacity to connect those new projects to the national grid was limited by available transmission capacity.
“We probably need close to R350bn over the next 10 years to build the transmission infrastructure. We do not have, from our own operations, the capacity to fund that,” he said.
Nyati said Eskom had the finances to fund the first three years of its transmission expansion plan.
Beyond that, it would need private investment, he said, adding that the board was considering the kind of build, operate, transfer models that had already been used to construct highways and communications networks.
Under the Eskom unbundling process, the utility will be split into three companies that will separately manage electricity generation, transmission and distribution. The transmission unit would be operational 2024, Nyati said, with the new distribution entity to follow suit in 2025.
He said in future Eskom’s generating company would be the sole provider of the baseload electricity required to keep the grid running, but with independent power projects increasingly involved in adding new generating capacity.
A government planning document released for public comment in January called for the construction of power plants to ensure adequate electricity supply to 2050.
Reuters