Municipalities to start buying electricity from IPPs - Cyril Ramaphosa

President Cyril Ramaphosa said government will initiate a procurement of emergency power from projects that can deliver electricity into the grid within three to 12 months from approval.
President Cyril Ramaphosa said government will initiate a procurement of emergency power from projects that can deliver electricity into the grid within three to 12 months from approval.
Image: Eskom

President Cyril Ramaphosa has announced a detailed plan on energy generation in order to assist the ailing power utility Eskom.

In his State of the Nation Address that was delayed by almost two hours, Ramaphosa also gave a green light to municipalities to source their own electricity.

He also announced that energy and mineral resources minister Gwede Mantashe would issue a directive that will enable the development of additional power from several energy resources including renewables, hydro, natural gas, coal and battery storage.

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He said that these measures, would increase electricity capacity and reduce the reliance on Eskom.

“We will initiate the procurement of emergency power from projects that can deliver electricity into the grid within 3 to 12 months from approval,” Ramaphosa said.

Applications for people or businesses with the ability to produce their own power will be processed within four months while negotiations around the purchase electricity from Independent Power Producers will continue.

“We will also put in place measures to enable municipalities in good financial standing to procure their own power from independent power producers,” Ramaphosa said.

He also said that the plan to split Eskom into three divisions, generation, transmission and distribution had started and that these divisions would have their own board and management structures.

Ramaphosa said there were plans to raise money to assist the ailing power utility and that they would also be looking into reducing costs it incurs through contracts.

“This requires both a drastic reduction in costs – including a review of irregular contracts – and measures to mobilise resources that will reduce Eskom’s debt and inject fresh capital where needed.

“The social partners – trade unions, business, community and government – are committed to mobilising funding to address Eskom’s financial crisis in a financially sustainable manner,” said Ramaphosa.

He confirmed that until these plans have been accomplished, load shedding will continue into the near future.

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