Treasury. Finance Minister Nhlanhla Nene. Pic credit. Nic Bothma
Treasury is supporting the DoE in procurement requirements and affordability of the nuclear programme. Finance Minister Nene. Pic credit: Nic Bothma.

South Africa’s Treasury department and finance minister, Nhlanhla Nene, are closely monitoring the cost of the government’s nuclear build programme, which President Jacob Zuma on Tuesday said was “at an advanced stage” during his mid-year State of the Nation Address, reported IOL.

Nene pointed out that Treasury was assisting the Department of Energy, which is managing and facilitating the project, to ensure it reached a cost-effective and affordable financing model.

“Nuclear is in government’s energy mix, and therefore when we talk about its procurement, we must look at it in the context of the broader energy mix,” the minister said.

Treasury’s role

“Our [Treasury] role with regard to this programme is to support the Department of Energy to arrive at the most cost-effective and most appropriate procurement process.

“We are supporting the department in procurement requirements, but also in terms of affordability in terms of our budget,” Nene added.

ESI previously reported that it has been estimated it would cost South Africa between ZAR400 billion and ZAR1 trillion ($32 billion to $81 billion) to build six nuclear power plants.

Power crisis

The government is looking at the nuclear programme as central to its plans to provide additional power to the grid in the long term, with Zuma admitting yesterday that the power crisis was the country’s “major obstacle”, IOL reported on Tuesday.

Zuma said progress had been made since the national government intervened in the Eskom crisis, which saw Deputy President Cyril Ramaphosa appointed to head a war room to sort out the state-owned enterprise’s problems.

Progress made

This includes the short-agreements that have seen an additional 800MW added to the grid and through co-generation with independent producers, and 450MW realised through energy efficiency programmes.

Another programme with renewable energy independent producers was also contributing an additional 1,800MW to the grid, with a total of 6,327MW expected to be added in the next two years through 92 alternative energy projects.

“This is a result of South Africans working together in order to alleviate the impact of the electricity challenge, and over and above that, energy efficiency results in savings in energy costs and reduction in emissions,” Zuma said.