Eskom Holdings SOC Ltd. will use a portion of $12.5 billion (R228.51 billion) multilateral loans toward delivering power to areas where the grid is overloaded and stymying the transition to renewable sources, according to its newly-appointed electricity minister.
Expanding the nation’s transmission grid will significantly contribute to stopping power cuts and is crucial to bringing renewable projects online, South African electricity minister Kgosientsho Ramokgopa said Sunday.
“We know now that the capacity transmission capacity has been exhausted in those areas,” he said in a media briefing.
“And that undermines our ability to connect the renewable energy projects. This pool of money will help us to to access that.”
South Africa needs an estimated R390 billion to strengthen its transmission capacity and connect renewable energy projects in parts of the northern, eastern and western Cape to the national grid, the minister said.
Eskom’s performance has steadily worsened in recent years, leading President Cyril Ramaphosa to declare an energy crisis, step up the purchase of power from private producers and appoint an electricity minister for the first time in March.
Due to transmission constraints, many renewable energy firms have included options to raise money for grid expansion into their business models, Ramokgopa said in response to Bloomberg questions.