Electrification of rural areas hit by budget cuts due to pandemic

Likely cuts of R230bn over the next two years means a delay of electrification, not that it won’t happen, says the energy department

 BL PREMIUM

07 JULY 2020 – 12:24

Picture: MARIANNE SCHWANKHART

Picture: MARIANNE SCHWANKHART

The department of mineral resources and energy, which has had its budget slashed by 17% due to the Covid-19 crisis, says the cuts will significantly reduce the number of new households that can be electrified in this year.

The pandemic has forced the reprioritisation of spending towards health and welfare, and brought about sharp spending cuts due to plummeting government revenue. The adjustment budget tabled last month penciled in budget cuts of R230bn over the next two years.

On Tuesday, CFO of the department, Yvonne Chetty, said that the Integrated National Electrification Programme (INEP), which provides Eskom with funds to expand bulk infrastructure for household electrification, will be halved from R3bn to R1.57bn over 2020/2021.

Chetty said it is anticipated that 43,000 fewer households will be electrified, compared to the original target of 180,000. The provinces most affected will be the Eastern Cape, Limpopo and KwaZulu-Natal, which have the biggest electrification backlogs.

The electrification of households, particularly in rural areas, has been a major success of the ANC government, which has massively expanded access to electricity since 1994 — when only 50% of households were electrified. By 2018, 84.4% of households had access to electricity connections.

Deputy director-general of the department Jacob Mbele said that the budget reduction of the electrification programme was  worked out with the Treasury on the basis of anticipated roll-overs for multi-year projects. This will mean that electrification to some areas will be delayed — not that it would not be done at all.

MPs across the political spectrum voiced strong concerns over the cut to the department’s only service delivery programme, questioning whether deeper cuts could not have been made in other areas, such as for goods and services. Chetty said that the goods and services budget has been significantly reduced.

INEP makes up close to a third of the department’s total budget and officials have been unable to argue that it should not be cut when service delivery budgets have been cut across all departments, said Mbele.