Ramokgopa inks deal with Chinese firms to fix energy crisis – and urges them to ‘work with speed’
In a move that began to take shape in June, South Africa has turned to several Chinese entities to lead a quick fix for load shedding and help Eskom slash emissions.
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.
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.
“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.
📸 Signing the Exchange of Letters between the Government of the People’s Republic of China and the Republic of South Africa, on the donation of emergency power equipment to South Africa, on the occasion of China’s State Visit in South Africa. https://t.co/CgtUcQjehS pic.twitter.com/VOBiqpG2CG
— Dr Kgosientsho Ramokgopa (@Kgosientsho_R) August 22, 2023
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.
“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