The JSE will host a seminar with Eskom later this month to help the utility fund its grid expansion programme.
Electricity Minister Kgosientsho Ramokgopa revealed this during a press conference on Sunday, which was first reported by News24.
“There are a number of offers that are coming through – a number of funding and financing sources across the globe,” said Ramokgopa.
“When I was in Kenya, at the climate conference, we had conversations with multiple players who raised their hands and indicated that they are ready to finance grid expansion.”
Ramokgopa said the aim is to leverage the JSE’s credibility as a financial institution to aggregate global and local interest in financing Eskom’s grid expansion.
After the seminar, a report will be submitted to the Cabinet. However, this may prove difficult as one of the conditions of the National Treasury’s debt relief plan for Eskom was that the utility should not raise any further debt.
Earlier this year, the government agreed to write off R254 billion of the power utility’s debt, which is roughly R450 billion.
However, Ramokgopa said there was a footnote to this condition, as the Finance Minister would consider any exceptional circumstances.
“So it is not necessarily out of the picture that you can have a consideration for additional financing. But I think it’s up to us to illustrate if we are of the opinion that Eskom must be given that opportunity. We simply need to make the case.”
Eskom’s big grid problem
Renewable energy projects in South Africa cannot connect to the grid due to Eskom’s lack of grid capacity and chronic underinvestment.
General manager for Scatec in Sub-Saharan Africa Jan Fourie explained to Newzroom Afrika what is preventing the company from connecting its solar farms in the Western Cape to Eskom’s grid.
Three of the company’s projects at Grootfontein in the Western Cape reached financial close at the end of June.
However, construction can only start in the first quarter of next year, with the projects only being completed and providing electricity to the grid in 2025.
This is due mainly to delays in getting grid connection approval from Eskom. The delay is not financial, planning, or construction – but rather a lack of grid capacity.
“The grid is becoming the bottleneck, especially in high-resource areas with wind and solar resources.”
He explained that building transmission lines to large renewable projects far outside major metropolitan areas is extremely difficult as they must cross private and public land.
There is simply a lack of electricity infrastructure in these areas due to the design of Eskom’s grid and chronic underinvestment in the grid.
Fourie explained that South Africa’s grid is designed to carry electricity from large, central power stations in the country’s northeast to other parts.
Renewable energy generation is decentralised, with generation facilities located almost anywhere.
The areas, such as the Western Cape, Eastern Cape, and Northern Cape, which have rich renewable resources, do not have the grid capacity to distribute electricity to the rest of the country.
The grid in these areas can only carry limited load, which is insufficient for large-scale projects such as Scatec’s.