- South Africa’s President Cyril Ramaphosa delivered his ninth State of the Nation Address last night in Cape Town.
This what he said regarding the countries energy sector:
‘The measures we have implemented through the Energy Action Plan have reduced the severity and frequency of load shedding, with more than 300 days without load shedding since March 2024.
While the return of load shedding for two days last week was a reminder that our energy supply is still constrained, we remain on a positive trajectory.
We now need to put the risk of load shedding behind us once and for all by completing the reform of our energy system to ensure long-term energy security.
The Electricity Regulation Amendment Act, which came into effect on the 1st of January, marks the beginning of a new era.
This year, we will put in place the building blocks of a competitive electricity market.
Over time, this will allow multiple electricity generation entities to emerge and compete.
We will mobilise private sector investment in our transmission network to connect more renewable energy to the grid.
As we reform our energy system, we are continuing to build successful multilateral partnerships in the global effort to halt the devastating impact of climate change.
Our Just Energy Transition is gaining momentum.
Over 13 billion US dollars have been pledged by the international community and significant private capital is being invested locally.
We are determined to meet our carbon reduction commitments, and will do so at a pace and scale that our country can afford.’
Situated between Volksrust and Amersfoort in Mpumalanga, Majuba is Eskom’s second largest power plant with an installed capacity of 4 110MW. Eskom relies on a fleet of ageing coal fired power stations to deliver the bulk of the country’s power. Image credit: Gavin Fordham via Flickr
The president is not announce any reforms regarding Eskom debt crisis.
Unsustainable Debt
Eskom is the main provider of electricity in South Africa. Eskom’s municipal debt has snowballed to R95-billion. Eskom is also challenged with smothering debt and interest costs, which are weighing on its money-generation potential. By October, its debt stock reached R397-billion, and it paid about R90-billion every year in interest rates, largely due to the weakening rand.
Related news: Limited JET funding to date in South Africa from rich nations
Addressing reportable irregularities and legacy management control issues
The recent publication of the FY2024 results was delayed by investigations into legacy management control issues. The qualified external audit opinion received for FY2024 was a result of PFMA records that were not complete or accurately maintained in line with legislative requirements relating to irregular expenditure, fruitless and wasteful expenditure, and losses due to criminal conduct. Except for this qualification, the financial statements are considered to be fairly presented in terms of the International Financial Reporting Standards (IFRS).
The audit findings call for appropriate steps to hold officials accountable, and this action is underway. The steps that are already being taken to address the control issues include a strengthened executive team that has the appropriate skills and leadership to drive adherence to internal controls, risk management and PFMA oversight. A resourcing drive to adequately capacitate the finance, internal audit and forensics functions to address key skills lost over the years will commence shortly.
Eskom has consolidated its forensics, security and investigative functions under the Group Investigations and Security function reporting directly to the Group Chief Executive. Additionally, a dedicated project management office has been created to address findings from data analytics as well as internal and external investigations and to address the backlog in investigations and consequence management both internally and externally with law enforcement agencies.
Author: Bryan Groenendaal
