HomeIndustry SectorsFinance and PolicySouth Africa: Treasury allocates $18bn for electricity projects

South Africa: Treasury allocates $18bn for electricity projects

Contained in the National Treasury 2017 Budget Review, the Department of Energy (DoE) will over the next three years spend R234.5 billion ($18 billion) for the expansion of household access to electricity, News24 Wire reported.

Media cited Treasury stating that approximately 90% of this amount, which accounts for about 25% of total public sector infrastructure spending, will go to national power utility, Eskom.

An additional R1 billion ($77 million) has been allocated in 2019/20 to support the Integrated National Electrification Programme in financing grid and non-grid connections, and to build and upgrade substations and electricity networks, Treasury stated in the speech.

“The programme will fund an estimated 723,000 grid and 49,650 non-grid connections to households over the medium-term expenditure framework period through transfers to municipalities, Eskom and non-grid service providers.

“Transfers are expected to total R7.6 billion ($545 million) for municipalities, R12 billion ($931 million) for Eskom and R0.6 billion for non-grid service providers between 2017/18 and 2019/20.”

Integrated national electrification programme

Treasury also stated that the integrated national electrification programme received a grant worth R19.6 billion ($1 billion) to speed up the electrification of poor households over the next three years.

“The aim of this grant is to provide capital subsidies to municipalities to electrify poor households and fund bulk infrastructure to ensure the constant supply of electricity.

“Allocations to this grant are made based on the backlog of un-electrified households and administered by the DoE. The grant only funds bulk infrastructure that serves poor households.”

“The integrated national electrification programme (Eskom) grant allocation includes reductions of R30 million ($2 billion) in 2017/18, R33 million ($2.5 million) in 2018/19 and R36.3 million ($2.7 million) in 2019/20.

Electricity projects

According to Treasury, the national electrification programme has helped provide 91% of all poor households with access to electricity, as reported in the 2016 Community Survey, an increase from the 85% reported in the 2011 Census.

Treasury also added that discussions on the alignment of electrification and human settlements projects will continue in 2017, with the aim of shifting allocations for electrification from 2018/19.

Babalwa Bungane
Babalwa Bungane is the content producer for ESI Africa - Clarion Events Africa. Babalwa has been writing for the publication for over five years. She also contributes to sister publications; Smart Energy International and Power Engineering International. Babalwa is a social media enthusiast.