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South Africa: Private sector holds key to ending energy shortage

The private sector can plug the gap in South Africa's electricity needs more effectively than Eskom itself, according to Michael Meeser, the head of project finance at Investec.
Meeser believes public-private partnerships (PPPs) could play an important role. International firms are interested in developing power stations - a process that involves financing, building, owning and operating them. They include US-based AES, Brussels-based Suez Energy and London-based International Power. Peter Hunt-Davis, a project finance consultant at Investec, said: "They are probably the three biggest privately owned developers worldwide and they have the same negotiating power as Eskom." Adam Gordon, an Investec project finance consultant, said: "We need to get more clarity about the government's target for renewable energy. The renewable energy white paper mentions a target of 10 000 gigawatt hours by 2012, but there has been a gap in the execution framework to get to this policy target. Having a framework in place would go a long way towards achieving the target." Gordon identified two key problems. One was the low tariff structure, without renewable incentives, at a time when costs, particularly for coal, were escalating. The second was the process, given the various roles played by the major stakeholders in the industry: Eskom, the departments of public enterprises and mineral and energy affairs, and the National Electricity Regulator.


Additional information: Read the whole stoty at Business Report
News date: 14/03/2008

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Comments and remarks to Wim Jonker Klunne

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