South Africa's financial sector plays a key role in the liberalized energy market, renewable energy is emerging as an asset class, and private investors are scrambling to get in on the action. (Wald Sweegers/Bloomberg via Getty Images)
DThe country's energy market has seen fundamental changes in recent years, despite complaints from the private sector that the government's reform plans are moving slowly.
When you talk to email and guardian Speaking on the sidelines of the 30th Mining Indaba, Nedbank Corporate and Investment Banking (CIB) Head of Mining and Chemicals Vusi Mpofu called market liberalization a “revolution”.
Referring to the government's decision to raise licensing standards for companies to produce their own electricity, Mpofu said: 18 months later, 2 years later, now he has 100 megawatts and no cap. ”
“If you think about the structure of Eskom, we are now moving away from generation, distribution and transmission,” Mpofu added.
“We are dismantling all these companies in order to increase efficiency and enable more flexible working models in different aspects of the energy sector. And all this is happening in a short period of two to three years. Five years ago, it would have been unthinkable or even possible for us to say that we are in such a special position.”
Mr Mpofu echoed the sentiment expressed by Ana Hajduka, chief executive officer of Africa Greenco, a buyer and trader of renewable energy.
“The policy environment, what is expected, has been looked at very comprehensively. There are still some elements of risk…but in terms of market opening, a lot has really been done,” Haiduca said. He made the remarks during a panel discussion hosted by Nedbank CIB on Monday.
“There's electricity.” [Regulation Amendment] invoice.I have all the Necoms [national energy crisis committee] walking group. Eskom is literally working around the clock on new market rules. Therefore, nothing has been comprehensively enacted yet. But the process that we are all going through is very impressive from our point of view. ”
In his speech at the Mining Indaba's opening ceremony, President Cyril Ramaphosa highlighted the government's efforts to drive economic reforms, including the increased licensing standards that led to the establishment of the 1312 power facility.
About a third of this estimated 6,387 megawatts of capacity is supplied to the mining industry.
However, Mpofu's acknowledgment of these changes requires caution. “But we are facing a crisis. When you are in a crisis like this, of course you have to make bold decisions,” he said. “Some may wonder why it wasn't made 10 years ago.”
South Africa's financial sector plays a key role in the liberalized energy market, renewable energy is emerging as an asset class, and private investors are scrambling to get in on the action.
At the end of 2022, Nedbank CIB was funding the country's Renewable Energy Independent Power Producer Program with approximately R35 billion.