Dailymaverick logo

South Africa

This article is more than a year old

BRICS SUMMIT

Ramokgopa inks deal with Chinese firms to fix energy crisis – and urges them to ‘work with speed’

South Africa and China are deepening their relationship in the energy sector with an MoC signed by Electricity Minister Kgosientsho Ramokgopa on Wednesday, potentially providing a much-needed reprieve from load shedding woes.
Ramokgopa inks deal with Chinese firms to fix energy crisis – and urges them to ‘work with speed’ Minister in the Presidency for Electricity, Dr Kgosientsho Ramokgopa discussing Green Energy Funding with the CEO of the Industrial Development Corporation of South Africa Mr TP Nchocho, President of China Africa Development Fund, Mr L Song and President of Energy China, Mr X Qiao at the BRICS Precinct in Sandton [Photo: GCIS]

Electricity Minister Kgosientsho Ramokgopa signed a joint memorandum of cooperation (MoC) with eight Chinese power companies on Wednesday to help South Africa solve its energy crisis and advance its energy transition.  

Speaking at the signing ceremony on the sidelines of the BRICS Summit in Sandton, Ramokgopa said the deal with the Chinese companies underscores the deepening of South Africa-Chinese cooperation in the energy sector. The eight companies have technology that can help Eskom to reduce emissions while improving performance at its coal-fired power plants, he said. 

He added that the Chinese firms had also agreed to help Eskom in developing its transmission and distribution infrastructure. 

“I am more than confident that South Africans are going to see the benefits of this relationship when we end load shedding – and we will end load shedding,” said Ramokgopa.

President Cyril Ramaphosa and President Xi Jinping observing signing of Memorandum of Understanding between two Governments In the field of Cooperation in Green Energy, Higher Education and Training, for export of Avocados from South Africa to China [Photo: GCIS]
President Cyril Ramaphosa and Chinese President Xi Jinping observe the signing of the memorandum of cooperation in Sandton on Wednesday. (Photo: GCIS)

The eight companies are the State Grid Corporation of China (SGCC), China-Africa Development Fund (CADF), China Energy International Group (CEIG), China General Nuclear Power Corporation (CGN), China National Electric Engineering Company, Huawei Technologies, TBEA, LTD, and Global Energy Interconnection Development and Cooperation Organisation (GEIDCO). 

Ramokgopa said the MoC had been in the works since he visited China in June 2023. According to a version of the MoC released to the media, it will remain in effect for three years, with an option to renew it for an additional two years.

Wednesday’s MoC signing comes a day after Chinese President Xi Jinping’s state visit to South Africa, the morning before the BRICS Summit began. His rare venture outside China is an opportunity to cement relations with Pretoria – China’s key partner in Africa.  

Reporting back on his closed meeting with Xi at the Union Buildings on Tuesday, Ramaphosa revealed the Chinese government had donated R167-million in emergency power equipment and made available a grant of about R500-million as developmental assistance, to help South Africa out of its energy bind. 

Electricity Minister Kgosientsho Ramokgopa participates in the signing ceremony with eight Chinese entities in the energy space, who have signed a joint memorandum of cooperation to advance energy security and SA's energy transition, in Sandton, Johannesburg, 23 August. Photo: Victoria O'Regan
Electricity Minister Kgosientsho Ramokgopa at the signing ceremony with eight Chinese in Sandton on Wednesday. (Photo: Victoria O'Regan)

“Energy cooperation with China is a recent development that we look to deepen, particularly in line with our respective commitments to low-carbon, climate resilient development,” Ramaphosa said. 

Read more in Daily Maverick: Tough Love Triangle: While Ramaphosa focused on Xi, Modi threw a tantrum and refused to get off his plane

During Xi’s visit to the Union Buildings, Ramokgopa signed a Framework Agreement on Cooperation in Green Energy and an Exchange of Letters between South Africa and China on the donation of emergency energy equipment. 

Speaking on Tuesday, the minister said the “donations are not attached to any conditions”.

He said the donation will assist in providing uninterrupted power supply to more than 500 public facilities in the country, including clinics, hospitals and police stations. 

South Africa is enduring its worst year for power cuts by the monopoly energy utility Eskom. (To track the days and stages of rolling blackouts in South Africa, see The Outlier.) The country is currently experiencing load shedding at stages 1 and 3. 

Speaking at the signing ceremony of the MoC, Ramokgopa said he had impressed upon the heads of the eight Chinese firms that they needed to “work with speed”.

The chairperson of the China Africa Development Fund, Song Lei – who was among the signatories of the MoC – suggested South Africa should streamline bidding and tender processes and relax BEE regulations to be more efficient. 

President Cyril Ramaphosa and Chinese President Xi Jinping at the BRICS Leaders Retreat at Summer Place in Hyde Park, Johannesburg, on 22 August 2023. (Photo: GCIS)
President Cyril Ramaphosa and Chinese President Xi Jinping at the BRICS Leaders Retreat at Summer Place in Hyde Park, Johannesburg, on 22 August 2023. (Photo: GCIS)

“If we stick strictly to the current bidding and the tendering framework, it might be difficult to be very efficient. So I suggest further organising and streamlining the bidding and tendering procedures, especially emergency and major power projects. Consider allowing direct participation of Chinese power enterprises through integrated investment, construction and the operation models,” said Lei. 

The value of grid expansion is going to run to hundreds of billions of rands. Daily Maverick has reported South African business was concerned about losing out to Chinese corporations in the large-scale roll-out of renewable energy infrastructure. 

Responding to questions on Tuesday about whether he will engage with the other BRICS nations on energy-related issues, Ramokgopa said South Africa would engage with other countries to further cooperation in the energy sector.

“This is not restricted to them [China], it’s just that they’re moving fast.” DM

Comments (10)

Hermann Funk Aug 23, 2023, 06:26 PM

“I am more than confident that South Africans are going to see the benefits of this relationship"what he means by South Africans is the ANC. It is the latter whose pockets will be filled.

Fanie Rajesh Ngabiso Aug 23, 2023, 08:16 PM

Let's face it, our government needs help. They are the masters of fokol. They are too insecure to use local skills, and the alternative is implosion. So frankly I'm good with Chinese assistance if it helps turn this country's economy around, educates people and opens their eyes to how useless the ANC actually is.

alison ellard Aug 23, 2023, 08:49 PM

The ANC create the problem, cant fix the problem, but congratulate themselves when they have to get another country to do it for them. Lets see how the ANC reacts when the Chinese close the feeding trough.

Denise Smit Aug 24, 2023, 07:56 AM

What is a R160 mil donation or a R500 mil loan in the scheme of things. We spend R3 BILJON a month on diesel. Western Cape Dept. of Health has spent millions more on solar and other solutions for their hospitals and clinics. The ANC can not make sums except for that coming into Luthuli House. And the Chinese head of state get SA honor award. The ANC can not meet eye to eye with the West who gives much more to SA than China and Russia, but it feel comfortable with the good mannered Chinese. The Chinese do not eat meat they eat dog or pork. How much avokados are used when they prefer rice. Denise Smit

Hari Seldon Aug 24, 2023, 08:23 AM

Totally - 500 million is a rounding error to the Chinese. It’s pathetic.

Dave Martin Aug 24, 2023, 08:17 AM

I've spent quite a lot of time in China and the speed and quality of their engineering work is mind-blowing. It will be interesting to see how the Chinese "can do" and "do it now" culture interacts with our red tape. I'm so, so tired of every interaction with China being seen as sinister. We as a country should be happy that we're getting help from by far the greatest infrastructural development nation on history. From purely an engineering perspective, what China achieved in the last 30 years surpasses anything previously done by humans. In just 3 years, China poured more concrete than the USA poured on the entire 20th century. Bridges, roads, dams and most relevant to us, the fastest expansion in electricity infrastructure in human history. China installs the equivalent of South Africa's entire electricity system every 6 months in solar panels alone!

Hari Seldon Aug 24, 2023, 01:27 PM

That's very true - but that is within their own country. As soon as they move into African countries the intention is not infrastructure development to benefit the country's population - its resource extraction with China as the long term beneficiaries at the expense and to the detriment of the country providing the resources. China will not help develop our own manufacturing capacity - they will want to manufacture in China and sell it to us or bring Chinese labour in to do the construction using Chinese products. This is the problem when they move out of China.

frankvdv@telkomsa.net Aug 24, 2023, 09:51 AM

As we have shrugged off the yoke of British Colonialism, we take on the even bigger burden of Chinese Colonialism

molyone Aug 25, 2023, 01:03 PM

Two questions - Has the Minister in place a mandate to exclude SA Companies in favour of China Companies, and secondly is the ANC Cabal aware of the fact that the Chinese Legal Systen rewards corruption with a death sentance swiftly executed !!!

Geoff Krige Aug 25, 2023, 02:05 PM

This article and the comments (mainly the comments) leave me somehow very saddened. I am saddened that the anti-apartheid movement and the apartheid government in its later years started the destruction of the South African manufacturing capability. I am saddened that the ANC government has almost completed the destruction of our manufacturing capability to the extent that outside help is desperately needed. I am saddened that there seems to be no component of rebuilding a local manufacturing capability in this agreement. I am saddened by the fact that an outside nation recognised the damage being done by BEE as had been painted out by local manufacturing for years. But mostly I am saddened by the negative and abusive vitriol in so many of the comments largely be people of European descent. Why should China not assist with the development of South Africa in exchange for mineral resources, exactly as the British colonial power did? Why should China not send Chinese professionals to oversee development work and ensure proper application of loans, exactly as the British colonial power did? Is this where liberal South African thinking is at - praising all the motives of the British colonial power, but ascribing the worst possible motives to the Chinese colonial power? The ANC has messed up. We need help. Let’s be thankful that here is help offered and let’s accept it and make to most of the opportunity to move forwards

Jane Crankshaw Aug 25, 2023, 02:12 PM

So now it starts - we will lend you the money as long as we are your only supplier! Next we will be bending over to get shafted!

Scott Gordon Aug 26, 2023, 06:17 PM

Missed the plot here . Donation of off the rack old stuff , and the cash loan , in Yuan or $$ ? Dudes , Arms Deal , China Rail :-) not settled :-) So it is a done deal all BEE compliant , 25% shares ? Etc . Just signed off now . Local guys ? Shafted ! I would complain . Not out to tender ? ' Emergency Rules' :-) China will come in , and fail . Then leave . Where is the payback ? All new lines ? R20 billion ? Will want rent . No free lunch , ask Sanral ! Still , many Chinese over here . Need the tech guys , have to live somewhere . Need chinese schools . The deal for hospitals might work , for a time , whenever . We sell iron for the Chinese to sell us a transmission grid ? As for Jon Q below , China has been paying the price of cutting off Aussie coal , that their plants were designed to use , does not work at Escom either ! MOU means nothing , see what Con court says in an year or 3 :-) Build huge lines for what ? Where ? Guess we might get a new nuclear power plant , thanks JZ . As for the dissenters , . Old comrades die in plane crash , or other places . As below , Triads have been around . How they work within the CCP , another question ?