Mossel Bay gas and a 1.5GW pumped hydro storage project priority energy projects in South Africa – Ramaphosa

  • South Africa’s President, Cyril Ramaphosa, says investment in infrastructure is central to the achievement of the country’s development goals.
  • He was addressing the 2024 Sustainable Infrastructure Development Symposium of South Africa (SIDSSA) currently underway at the Century City Conference Centre in Cape Town.
  • South Africa’s infrastructure has been in rapid decline over the last decade under the leadership of Ramaphosa and his predecessor, Jacob Zuma.
  • National blackouts of up to 10 hours are a daily occurrence while water supply and sewerage systems are in a general state of disrepair at most municipalities and metros across the country.
  • Taps recently ran dry for over 10 days in the country’s biggest metro and economic hub, Johannesburg. Read more.
  • National rail, ports and road infrastructure has also been poorly planned and mismanaged hurting the country’s exports. Read more 

“It is estimated that to achieve our infrastructure goals, we need an additional R1.6 trillion in public sector infrastructure investment and a further R3.2 trillion from the private sector by 2030,” President Ramaphosa said.

“We are working on reforms to develop sustainable infrastructure, lift business confidence and encourage investment. These reforms include the amendment of the Division of Revenue Act to enable provincial governments to use their infrastructure grants and budget allocations to crowd-in private sector finance for large social infrastructure programmes,” President Ramaphosa said.

The President said amendments to the public-private partnership regulations, which have recently been published for public comment, are part of broader reforms to mobilise and pool public and private sector resources for infrastructure.

“Projects worth nearly R170 billion are currently in procurement. In this calendar year, 11 such projects, with a total investment value of R45 billion, are expected to reach financial close.

“To date, Infrastructure South Africa has unblocked a total of R25 billion worth of projects in the renewable energy space using the Infrastructure Development Act to fast-track government authorisations,” the President said.

There also priority projects for project preparation in energy security and the green economy, such as Eskom’s gas project at Mossel Bay and pumped hydro storage project in Fetakgomo Tubatse Special Economic Zone.

Mossel Bay gas project

Ramaphosa’s government has controversially approved state-owned company Petro SA’s recommendation of Russia’s GazpromBank Africa as an investment partner for the reinstatement of the Mossel Bay Gas to Liquids (GTL) refinery plant and production – with no feedstock in place. Read more

Related news: The deal saw 19 out of 20 bidders being eliminated on technical grounds, leaving Gazprombank as the only qualifying bidder  

PetroSA has chosen Equator Holdings, run by notorious local political operator Lawrence Mulaudzi, to bankroll exploration of its offshore gas reserves and rebuild critical gas infrastructure with GazpromBank Africa. The Limpopo businessman was mentioned 176 times in the Mpati Commission report into malfeasance at the Public Investment Corporation and has been accused of channelling money to ANC and EFF politicians.

The projects awarded to Equator are critical for government’s dream of developing an offshore gas industry, but it is unclear where Mulaudzi, who previously had his Bentley repossessed, will find the billions PetroSA needs to rebuild gas infrastructure and drill wells. Read more

1.5 GW Fetakgomo Tubatse pumped hydro storage project

Eskom’s original proposal to build the 1.5 GW Fetakgomo Tubatse pumped hydro storage project was mothballed more than a decade ago due to ‘stagnant electricity demand’. Read more

It was revived in 2022 in South Africa’s so-called Just Energy Transition Investment Plan but has gained little traction since largely because the government has no money to build it. The project will cost R35.9-billion and take about about eight years to construct.

Link to Ramaphosa’s full speech HERE

Author: Bryan Groenendaal

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