On Friday, South African finance minister, Malusi Gigaba, told City Press in an exclusive interview that the country’s new nuclear build programme is not affordable and not necessary.
“There was a time when it was felt that nuclear is necessary and it must be implemented and programmes were started. But it became clear, as the economy took a serious dip, that we were not going to afford nuclear, that the country couldn’t afford it and the budget couldn’t afford it,” he said.
He added: “It is quite clear that, at present, we can meet our electricity needs and we can even meet them into the future, given the excess electricity that we have.”
No budget for nuclear
“High uptake of electricity from intensive users, when we can see that we are reaching the stage where existing capacity is being fully utilised and the demand and supply margin is very narrow,” is when the need for added nuclear capacity will arise, according to Gigaba.
Fin24 reported, Gigaba said it was not a “malicious view” to shelve the nuclear programme for now, considering the R50 billion budget shortfall, a rising budget deficit, National Health Insurance, demands for free higher education, and a national debt to GDP ratio which is set to breach the 60% threshold by 2022.
“If you look at Eskom’s balance sheet, they will not be able to afford nuclear, they will need a guarantee from government.
“Government guarantees are ultimately state debt, because when a state-owned company cannot afford to pay the guarantees, the national fiscus needs to step in and pay. That is what happened at SAA,” he said. Read more…
Read more of the interview here.
Featured image: Stock