R131b renewable energy commitment will help end load shedding – Ramaphosa

Cyril Ramaphosa at state capture commission of inquiry
President Cyril Ramaphosa. Image credit: Facebook/MyANC

The recent R131 billion commitment by developed countries to fund South Africa’s just transition to a low-carbon economy will help end load shedding, President Cyril Ramaphosa has said.

Writing in his weekly letter to the nation on Monday (8 November), Ramaphosa said recent government decisions will also spur investments in the energy sector to address the ongoing power crisis.

‘Debilitating load shedding’

“The 25 preferred bidders in the fifth round of our Renewable Energy Independent Power Producer Procurement Programme are together expected to invest around R50 billion into the economy. The increase of the licensing threshold for embedded generation to 100 megawatts is likely to result in substantial private investment in electricity generation projects,” Ramaphosa said.

“South Africa has recently secured an initial commitment of around R131 billion to fund a just transition to a low carbon economy by investing in renewable energy, green hydrogen and electric vehicles.

“This commitment by the United States, United Kingdom, France, Germany and the European Union is in line with the Paris Agreement, which obliges wealthier countries to support decarbonisation in the developing world.

“These energy investments will help us overcome the debilitating load shedding that the country is currently experiencing, as new electricity generation capacity comes online.”

Investment conference postponed

The President also announced the postponement of this year’s Investment Conference, which was due to be held this month. This is because several events, including the local government elections and COP26 climate change conference, were being held around the same time.

South Africa held three Investment Conferences since 2018, netting around R770 billion in investment commitments across various sectors so far. The fourth Conference will now be held in March 2022.

“In the last year alone, nearly R120 billion of investment commitments flowed into project construction or expansion,” Ramaphosa said.

“This means that around 38 percent of the total investment commitments – or R290 billion – have to date flowed into the economy. Some investments have been delayed due to COVID-19, particularly in hard-hit sectors like property development and tourism.”

Besides investments in the energy sector, Ramaphosa cited commitments in other sectors, including Aspen Pharmacare’s R3.4 billion expansion, investments in datacentres and undersea cables, and the World Health Organisation’s choice of South Africa as host of an mRNA vaccine manufacturing hub with the Biovac Institute.

“As we make progress with the implementation of the Economic Reconstruction and Recovery Plan – with its focus on infrastructure, industrial development, employment and structural reform – the environment for investment will improve further,” he concluded.

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