Private power surges in South Africa

Fixed-investment spending in South Africa grew by the most in almost three years in the second quarter as companies and households invested in alternative energy sources because of persistent power cuts.
A sharp rise in investments in imported machinery and equipment – mostly for electricity infrastructure – led gross fixed capital formation to increase by 3.9% in the quarter, compared with 1.8% in the prior three months, Statistics South Africa said in a report released in the capital, Pretoria, on Tuesday.
That contributed to better-than-expected gross domestic product growth of 0.6% in the second quarter.
The news comes on the back of Trade & Industrial Policy Strategies senior economist Gaylor Montmasson-Clair revealing that South Africa had record-level battery, inverter, and solar panel imports in the first half of 2023.
In the first six months of the year, roughly $2.5 billion’s (R48 billion’s) worth of these products landed in the country, compared to $1.7 billion (R32 billion) in the entire 2022.
The capacity of the imported solar panels works out to nearly half that of one of Eskom’s newest power stations — the 4,800MW Medupi and Kusile plants — which have taken over a decade to build.
The graph below from Bloomberg shows quarterly fixed capital spending in South Africa over the past three years.
Reporting with Bloomberg.