The government will invite private companies to submit a fifth round of bids to provide additional renewable energy to the grid, while companies will be allowed to produce unlimited electricity for their own use, Ramaphosa said in his state-of-the-nation address in Cape Town on Thursday. Additional capacity will be purchased from existing solar and wind plants, and independent producers will also be permitted to sell their output directly to municipalities.
“Over the next few months, as Eskom works to restore its operational capabilities, we will be implementing measures that will fundamentally change the trajectory of energy generation,” Ramaphosa said.
Since he succeeded Jacob Zuma as president in February 2018, Ramaphosa has faced mounting pressure to revive the economy and create jobs for the 29% of the workforce that’s unemployed.
Efforts to ignite growth have been constrained by electricity shortages, with Eskom forced to implement rolling blackouts as its ageing plants struggle to keep pace with demand. The utility, South African Airways and several other state companies have also placed the government’s already stretched finances under even more pressure with constant demands for bailouts they say they need to keep operating.
Ramaphosa warned that Eskom’s current debt trajectory was unsustainable and said Finance Minister Tito Mboweni would announce measures to cut spending when he delivers his budget speech on Feb. 26. The government is in talks with labor unions about reducing the state’s wage bill, he said.
- A sovereign wealth fund will be established to preserve the nation’s wealth.
- The government will press ahead with plans to establish a state bank.
- Far-reaching economic reforms, including a number that were proposed by the National Treasury, will be implemented.
- State-owned companies will be rationalised and repurposed.
- South African Airways will be restructured to ensure it is commercially and operationally sustainable.
- Efforts will be stepped up to tackle crime and corruption.