Why China is really helping Eskom

China is helping South Africa tackle load-shedding with the expectation that the country will pay it back through future business with Chinese companies and political support.

South Africa received hundreds of generators from China this week following the pledge from the Asian giant to help the country end its energy crisis through a R500 million donation.

“The donation forms part of the Technical Assistance Programme that was entered into in August 2023 during China’s Head of State Visit to South Africa,” the Presidency said.

“The generators will be used as a backup to alleviate the impacts of load-shedding in the delivery of services in clinics, schools and courts whilst the government continues to implement the Energy Action Plan to end load-shedding.”

Other focus areas relate to transferring technology and skills from Chinese companies to Eskom.

Electricity Minister Kgosientsho Ramokgopa said he is discussing how to finance the expansion of South Africa’s grid to enable additional capacity to come online.

Chinese experts have also visited several Eskom power stations and made recommendations to the Minister as to how their performance can be improved.

The experts are also assisting Eskom’s efforts to reduce emissions from its coal-fired power plants.

Ramokgopa stated in a later interview that there are “no strings attached” to the agreement.

However, energy analyst Chris Yelland told 702 that while there may not be any strings attached to the deal, expectations are most certainly attached.

“I don’t think there are strings attached, but there are expectations attached, and it is done with these expectations to oil the wheels of future business,” he said.

This is a precursor to the real business, as China has the immense resources needed to bring load-shedding to an end in South Africa.

Furthermore, “ideologically, the ANC government is much more aligned with China than with the United States or Europe. The reality is that the real ideological and business interests are with China.”

“I think this is more of a political signal. A signal that China is interested in cooperation with South Africa, that they have business interests here and want to expand those interests,” Yelland said.

“I am sure their objectives go beyond simply a donation of petrol and diesel generators.”

Yelland joins a chorus of other energy analysts who have raised questions regarding South Africa’s deal with China.

Energy expert Hilton Trollip said earlier this year that he believes the Electricity Minister is misleading South Africans about the nature of the deal and its potential benefits.

The agreement is expected to bring between 300 to 450 backup electricity generation units. Trollip dismissed this as a farce as there are over 23,000 public schools alone in South Africa.

“I was trying to follow the minister’s mini-facts and non-facts that he was talking about, and I could not find anything of substance,” Trollip said.

China is a world leader in building new generation capacity, building an entire Eskom’s worth of new generation capacity in renewables every year. Its electricity system is 50 times the size of South Africa’s.

Despite this undoubted ability, the agreement signed between the two countries is shrouded in mystery, as it is not public.

Hilton Trollip

UJ Professor Hartmut Winkler has previously cautioned against relying on foreign countries and companies to solve load-shedding.

“Ultimately, I do not think it is what foreign countries and companies are going to do in this country that matters – it is more what South Africa will do itself.”

Winkler said there is no such thing as a free lunch in international politics, even if it is a donation. At some point, South Africa will have to give China something in return.

“There is always an expectation that it will help the donor at some point.”

Ramokgopa stated in a later interview that there are “no strings attached” to the agreement.

The Ministry of Electricity said, “The substance and details of the agreement were openly presented during an open signing ceremony attended by media.”


This article was first published by Daily Investor and is reproduced with permission.

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Why China is really helping Eskom