Chemicals and energy group Sasol has developed a list of ten major assets that will be prioritised for sale in the coming weeks and months as it moves to streamline the business into what is being termed ‘Sasol 2.0’, while also raising proceeds to help it reduce a $9.5-billion debt burden. In total, the group has identified more than 20 assets for disposal from a portfolio of about 100 cash-generating units.
National Energy Regulator of South Africa (Nersa) fulltime member for electricity Nhlanhla Gumede has called for the regulatory methodology used to set electricity tariffs in South Africa to be overhauled, arguing that the multiyear price determination (MYPD) approach is not aligned with the changes taking place in the sector. Speaking during a virtual briefing only days after Nersa lost another court battle with Eskom over its application of the MYPD, Gumede argued that the ongoing disputes between the regulator and utility were largely about the “outputs of models, rather than the construct of those models”.
Chemicals and energy group Sasol confirmed on July 1 that the sale of its equity interest in the Republic of Mozambique Pipeline Investment Company (Rompco) and the Central Termica de Ressano Garcia gas-fired power plant, also in Mozambique, were well advanced, along with partnering discussions for its base chemicals assets, in the US. In a statement to shareholders, the JSE-listed group officially confirmed that the 865-km gas pipeline, in which it has a 50% share, would be sold.
South Africa’s energy transition from coal to cleaner energy carries an economic opportunity equivalent to the discovery of gold in the country more than a century ago, a new South African National Energy Association (Sanea) report argues. Published on June 30, the ‘South African Energy Risk Report 2020’ also argues that clean energy could be an active driver of the country’s economic recovery from the Covid-19 pandemic, especially if policy and regulation is changed to be more supportive of new business models for the delivery of infrastructure in a context of weak public finances.
The International Monetary Fund (IMF) reported on Monday that its funding talks with South Africa had proceeded at a “measured pace” owing to the country’s favourable access to deep and liquid financial markets, which meant that the negotiations had focused primarily on the terms of the funding rather than the urgent disbursement of funds. In a move that is controversial domestically, South Africa has approached the IMF for a $4.2-billion loan to assist it in closing a funding gap that has developed as a result of additional government spending commitments that have been announced as part of the country’s response to the Covid-19 pandemic.
Work has begun in earnest at the Toyota Parts Distribution Warehouse in Atlas Road, East Rand, where Toyota South Africa Motors (TSAM) is doubling the facility’s size from 40 000 m² to 80 000 m². TSAM is investing R365-million in the project and, when completed in 2021, the facility will be the largest automotive parts warehouse in the southern hemisphere.
Eskom CEO Andre de Ruyter reports that the State-owned utility’s newly created just energy transition (JET) project office is evaluating green financing options that could help accelerate the deployment of renewables and facilitate the repurposing of its older coal plants in ways that improves Eskom’s sustainability and sustains livelihoods in coal mining towns. In a presentation delivered during a South African National Energy Association webinar on Thursday, De Ruyter argued that the JET represented a major opportunity for both Eskom and South Africa and that the office had, thus, been established to ensure that the issue received dedicated effort and attention.
Finance Minister Tito Mboweni announced grim revisions to South Africa’s fiscal framework when presenting his Covid-19-induced ‘Supplementary Budget’ speech on Wednesday, in which he likened the country’s rising debt profile to that of a hippopotamus “eating our children’s inheritance”. He used the backdrop of unsettling revisions to government’s medium-term Budget deficit and debt projections to make a firm commitment to stabilising debt at 87.4% of gross domestic product (GDP) in 2023/24.
South Africa’s National Treasury on Wednesday said it would allocate an additional R3-billion to the recapitalise the Land Bank, but said no other in-year spending adjustments were proposed for state-owned companies in budget adjustments related to the Covid-19 crisis. In a supplementary budget review for 2020, the Treasury said the coronavirus pandemic and associated economic restrictions were expected to reduce revenues for entities such as the Airports Company South Africa, power utility Eskom and the South African National Roads Agency Limited.
President Cyril Ramaphosa believes that infrastructure should be the “flywheel” of South Africa’s economic recovery from the growth- and job-destroying Covid-19 crisis and announced on Tuesday that infrastructure would, thus, be placed at the centre of South Africa’s postpandemic stimulus efforts. Speaking at the inaugural Sustainable Infrastructure Development Symposium South Africa (SIDS) – hosted as a hybrid event, with the 681 attendees participating physically at the Union Buildings, in Pretoria, and virtually – Ramaphosa said that shovel-ready projects would be prioritised so as to ensure that “ground is broken as soon as possible”.