Eskom hails meeting with business aimed at plucking “low hanging fruit” in energy sector

SOUTH African business leaders met with Eskom in a July 29 meeting described by the utility’s CEO André de Ruyter as an effort to “harvest the low hanging fruit in the electricity industry”.

It follows sweeping proposals by President Cyril Ramaphosa aimed at liberalising the country’s energy sector by introducing significant private sector investment. Over 70 private were involved in the meeting which was led by the Johannesburg Stock Exchange and Business Leadership South Africa (BLSA).

“The purpose of the discussions was to identify initiatives where the parties can collaborate and plant the seeds of opportunity to leverage private sector investment capacity and harvest the low hanging fruit in the electricity industry,” said De Ruyter.

Investment in own generation and Independent Power Producers through land leasing and wheeling arrangements were discussed between the parties as well as the development of an aligned policy framework “related to the fiscus”.

Leila Fourie, CEO of the JSE, said South Africa was at “a very important inflection point” and that business had taken “the opportunity to unpack some of the proposed solutions for business-to-business partnerships in the generation of electricity”.

As part of Ramaphosa’s proposal the government intended to tackle Eskom’s burgeoning R400bn debt pile, enable the utility to purchase power from the industrial sector where it has surplus capacity – such as mines and paper mills – and slash red tape that may be impeding sector liberalisation.

Ramaphosa also said government would allow for the doubling to 6,000MW the amount of wind and solar power to be procured in the latest Window Bid 6 and remove licencing required for the generation of private power, currently set at a 100MW ceiling.