LegalBrief 12 March, 2019
President Cyril Ramaphosa says the financial and operational challenges faced by power utility Eskom are not caused by the independent power producer (IPP) programme. According to an SA News report, responding to oral questions in the National Assembly last week, the President said the IPPs would not collapse Eskom. He said the power utility’s headwinds are as a result of a number of factors – from State capture to poor maintenance of its power plants. ‘The severe financial and operational challenges being experienced by Eskom are not caused by the IPP programme, and in particular the renewable energy projects,’ said Ramaphosa. He said this in response to a question by EFF leader Julius Malema, who had asked about the cost to Eskom of the IPPs that signed the latest round of power purchasing agreements with Eskom, and if the costs of the agreements would collapse the power utility.The President said the IPPs were investing their own debt and equity to construct the projects, including the cost of connecting these power projects to the grid. He said the value of the 27 IPP agreements signed in April 2018, represented in terms of private sector investment, is R57bn. To date, the total value of private investment in SA’s renewable energy generation capacity is R202bn.