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BRICS SUMMIT | 'China's R500m grant won't end electricity crisis soon'

Fund should help with infrastructure repairs, say experts

President Cyril Ramaphosa hosted President Xi Jinping of the Republic of China on the State visit to South Africa at the Union Building in Pretoria.
President Cyril Ramaphosa hosted President Xi Jinping of the Republic of China on the State visit to South Africa at the Union Building in Pretoria.
Image: Freddy Mavunda

South Africans should not expect to see the end of electricity blackouts soon despite an offer of a R500m grant made by Chinese President Xi Jinping yesterday to help the country deal with the energy crisis.

This is according to analysts who spoke to Sowetan following the announcement of the package which includes a further donation of R170m worth of emergency power equipment by China to SA. There were no details provided immediately on the timeframes of delivery of the equipment.

The package to alleviate SA's energy crisis was announced during President Xi’s state visit to the Union Buildings in Pretoria yesterday. The meeting took place ahead of the two leaders’ appearance at the opening of the 15th Brics Summit in Sandton.

The Brics Summit is held to strengthen economic ties between countries that share common purpose of inclusive economic growth and global development. President Cyril Ramaphosa said SA deeply appreciates China’s support in addressing the current energy challenge.

Independent energy analyst Lungile Mashele said the conditions attached to the R500m Chinese grant were like those of a R24m grant made by the US last month.

“The R500m from China is significantly larger and can certainly get a lot more done. Similar to the R24m grant provided by the US, the basic premise is the same for the grant offered by China. You'll use that country’s technical consultants for the development work with an almost certain caveat that you will have to use their engineers, equipment manufacturers and firms for implementation. It's a closed financial loop for their economies,” said Mashele.

She said Eskom was in urgent need of parts and equipment for maintenance and rehabilitation programmes. “If parts could be delivered to Medupi's Unit 4 urgently, that could alleviate almost one stage of load shedding,” she said.

The power crisis has crippled SA’s economy and forced small business into closure following heightened stages of load shedding.

University of Johannesburg physics lecturer Prof Harmut Winkler said the grant would provide a small benefit for the ordinary folk. “… But the public should not expect immediate solutions to load shedding. The power crisis will be with us for another five years, but, if government sticks to its current plans and does not get tempted into more megaprojects, we should slowly see improvements by the end of next year,” said Winkler.

He said superpowers like China benefit from closer links with other countries, which sometimes translate to dependence.

“It also strengthens trade and hence benefits the relevant Chinese manufacturers. At the same time, this is an opportunity that SA should pursue, as this merely affirms a relationship that already existed, and would have continued even without formal agreements like this,” he added.

“China has also taken extraordinarily massive steps to move their previously largely coal-based electricity supply towards renewable energy. I therefore see this agreement as a natural consequence of pre-existing interaction and shared experience in the electricity sector.”

Wits University lecturer Prof Nthatisi Khatleli said South Africans should not raise their hopes that the donation and the grant from China would make a major difference.

“No amount of handouts are going to assist us in getting out of this situation, not unless we deal with the structural problems in reducing corruption at Eskom. So, dishing out whatever the Chinese are busy dishing out, it looks good for the cameras, but I don’t think it deals with the problems that we have… We’ve mismanaged Eskom until it couldn’t generate enough power,” said Khatleli.

International relations expert Lawrence Halton said the grant by China will help the country in stabilising power supply and creating jobs. He added that SA was doing well to maintain growing relations with both the China and US at the same time.

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