Eskom after Molefe: Game-changer for SA nuclear build, renewable energy?

Many South African business players were delighted to hear the news that Eskom CEO Brian Molefe has decided to step down. With Molefe a central figure in the #StateCaptureReport, his role in the business activities of the Gupta family highlighted that he may have, at the very least, conflicts of interest. Molefe has been publicly supportive of a nuclear build programme with Russian partners – a project that is believed to be too expensive for South Africa and one that could easily tip the country into bankruptcy. Molefe was implicated in a potentially fraudulent deal to help the Gupta family buy a coal mine. The Eskom boss has also been playing a strange delay game when it comes to the development of renewable energy, refusing to sign off on final budget quotes. The South African Renewable Energy Council has underscored the importance of selecting the right person for the job at the helm of the country’s utility giant. A change in attitude could make a marked difference to the country for so many reasons, from environmental to financial. However, recent appointments to senior positions at state entities suggest that Eskom could easily have another person of Molefe’s ilk next year. President Jacob Zuma calls the shots and he will, no doubt, want an ally in this key position. ANC MPs will have a say in who the next Eskom CEO is, with the Cabinet approving the appointment. ANC MPs do not vote according to conscience, as they demonstrated recently in a failed vote of no confidence in Zuma; they vote according to instructions from the party, in particular Zuma.  – Jackie Cameron

By Matthew le Cordeur

Cape Town – The South African Renewable Energy Council (Sarec) wants to see a “shift of attitude” from Eskom as it seeks a new chief executive following Brian Molefe’s resignation.

Eskom CEO Brian Molefe
Eskom CEO Brian Molefe

Molefe has refused to issue final budget quotes to preferred bidders in Round 4 and Round 4 extension of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) as he believes Eskom is being taken for a ride by the private sector.

There are 26 preferred bidders across a range of technologies, none of which has reached financial close due to Eskom’s refusal to sign further PPAs, Sarec chairperson Brenda Martin said last week.

“These projects represent a combined value of R50bn in investment into the country that has been put on hold, which is ludicrous when considering our current economic climate,” she said.

Molefe announced on Friday that he would step down at the end of 2016, after former Public Protector Thuli Madonsela’s report State of Capture implicated him as being close to the Gupta family during the family’s takeover of Optimum Coal Mine from Glencore this year.

Before Molefe was shifted from Transnet CEO in 2015 to save Eskom from load shedding and its financial woes, Sarec said it had a constructive working relationship with Eskom around the REIPPP.

“We have, however, found the increasingly irrational and inaccurate criticisms levelled at renewable energy and the REIPPP programme by Mr Molefe and Mr (Matshela) Koko in recent months difficult to fathom, particularly since neither has ever sought to engage with the industry directly through well-established platforms to do this,” said Sarec board member Mike Levington.

Failure to follow clearly understood communication channels led to the undermining of investor confidence in the Independent Power Producer sector, Sarec explained.

Also read: Renewable energy plans: Who’s in control? Eskom or govt?

“We hope that the appointment of a new chief executive will lead to constructive communication between Eskom and Sarec as well as reinvigoration of momentum in the REIPPP, the financial close of the Redstone CSP project from Round 3, the 26 projects from Round 4 and the Small IPP programme, and the announcement of the Expedited Round preferred bidders,” said Levington.

It is expected that after the closing of rounds 4 and the expedited round, the REIPPP will have been the cause of greater than R250bn of investment into South Africa. – Fin24


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