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The Independent Power Producer (IPP) Office has confirmed that it will oppose a legal attempt by two renewables consortia to prevent the payout of preferred-bidder guarantees called after their projects failed to advance to commercial close.
Both consortia - Engie-Pele Sannapos Solar PV Consortium and Globeleq-Mainstream SA Renewables Power - were selected as preferred bidders during Bid Window 5 (BW5) of the Renewable Energy Independent Power Producer Procurement Programme, launched in 2021.
A total of 2 600 MW was allocated for procurement from wind and solar PV technologies during the bid window, which was the first renewables round initiated in line with Ministerial determinations arising from the Integrated Resource Plan of 2019.
It also followed a long procurement hiatus, triggered when Eskom announced in 2015 that it would no longer enter into new power purchase agreements with IPPs based on a claim that Eskom had sufficient generation capacity.
South Africa subsequently experienced extreme power disruptions, which have since tapered with loadshedding having been suspended since March 26.
A total of 25 wind and solar preferred bidders were selected during a round where the weighted average price across both wind and solar PV projects came in at 47.3c/kWh, the lowest prices bid since the launch of South Africa's renewables programme in 2011.
Several projects, however, ran into financial difficulties amid supply-chain disruptions associated with Covid lockdowns and a spike in energy prices that followed Russia's invasion of Ukraine in February 2022.
A number of BW5 projects, thus, failed to reached commercial close, triggering the payment of preferred-bidder guarantees.
The two consortia initiated their legal challenges in October after the IPP Office "presented the preferred bidder guarantees for payment on the basis of the terms thereof".
"Their action is an attempt to prevent a payout by ABSA Bank of the preferred bidder guarantees," the IPP Office told Engineering News in response to questions.
The IPP Office also confirmed its intention to oppose both cases, saying that "once the pleadings have been closed the matter will be heard".
However, it refused to be drawn on the amounts involved or on what the request for proposal documentation said regarding the conditions for forfeiture of preferred-bidder guarantees.
It was also not clear whether similar attempts could be made by others, given that 14 projects with a combined capacity of 1 400 MW selected under BW5 failed to advance to financial close, while five projects with a combined capacity of 1 600 MW had failed to close under the risk mitigation round.
During a briefing in October, Electricity and Energy Minister Dr Kgosientsho Ramokgopa expressed his support for the pulling of bid bonds even if it resulted in legal challenges.
"We must stick to the rules of this programme," he said.

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More than 40% of South Africans are considering purchasing an electrified vehicle (EV) in the next five years.
This is according to a survey by Ford Motor Company, with most respondents preferring hybrid technology.
EV in this instance includes hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs).
Ford conducted the survey across Australia, Saudi Arabia, Philippines, New Zealand, South Africa, South Korea, Thailand, Vietnam and the United Arab Emirates.
Ford is gearing up to build and sell the PHEV Ranger pickup in South Africa.
"This research highlights the need for continued efforts to educate the public about EVs, address concerns about cost, range and infrastructure, and to promote the benefits of electric mobility," says Ford South Africa product marketing executive director Sunil Sewmohan.
Ford says the research revealed that South Africans are relatively familiar with EVs, with most respondents classifying them as being 'fun to drive', 'cool', 'sporty' and 'easy to own'.
More than 30% of respondents said they had ridden in an EV, with 19% claiming to have driven one, and more than 70% noting that they had at least read about EVs.
However, almost half of respondents in South Africa said they were not aware of any public charging sites within 20 km of their homes.
Twenty per cent of respondents said they were concerned about the resilience of the power network, with 47% saying they were worried about EV charging infrastructure.
Service stations ranked highest as the preferred location for charging sites, followed by shopping centres and office buildings.
According to almost three-quarters of those surveyed, possible future loadshedding in South Africa would impact their decision to buy a BEV.
Similarly, 70% said charging infrastructure would affect their decision to purchase a BEV.
When it comes to the type of EV, HEVs came out on top, followed closely by PHEVs, with BEVs ranked third.
Saving money by not buying fuel was rated as a top benefit of owning an EV, but many believe maintenance costs for EVs are higher in the long run.
Just under 40% of respondents believe that charging an EV at home is as expensive as filling up a petrol- or diesel-powered vehicle.

Engineering News editor Terence Creamer discusses the key themes of the first Medium-Term Budget Policy Statement of the Government of National Unity, delivered by Finance Minister Enoch Godongwana, including specific moves to unlock private sector participation to build new transmission infrastructure.

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Scaling up private-sector participation (PSP) in the delivery of infrastructure emerged as a central component of the "pro-growth agenda" outlined by Finance Minister Enoch Godongwana in his first Medium-Term Budget Policy Statement (MTBPS) since the formation of the Government of National Unity.
Public and private fixed investment levels currently stand at about half of the targeted 30% of gross domestic product (GDP) set in the National Development Plan, and the MTBPS describes the quality of public-sector infrastructure spending as suboptimal and the quantity as inadequate.
"As a result, existing infrastructure is deteriorating, backlogs are growing and the cost of providing infrastructure is high.
"This represents both a challenge and an opportunity," the MTBPS reads.
While government would restructure the way public infrastructure projects were prepared and financed, Godongwana emphasised the measures being taken to mobilise private resources to augment constrained public capability amid weak growth.
Notwithstanding the 3% growth target set as an aspiration for 2025 by government and business, the National Treasury is forecasting growth of only 1.7% next year, on the back of a forecast of 1.1% for 2024, which represented a downward revision from 1.3% forecast in the February Budget.
Such low growth continues to place strain on the revenue outlook (which was also lowered by R22.3-billion in the MTBPS) and the fiscal balance, which currently reflects a debt burden of R5.26-trillion or 74.1% of GDP, and has resulted in debt-service costs now consuming 21.6% of revenue.
Government had identified higher levels of infrastructure investment as crucial for lifting growth and employment, but was also pursuing a fiscal strategy aimed at narrowing the consolidated Budget deficit from 5% of GDP in 2024/25 to 3.2% in 2027/28, while stabilising debt at 75.5% of GDP in 2025/26.
CREDIT ENHANCEMENT TOOL
The MTBPS, therefore, lists a series of reforms geared towards catalysing greater PSP in infrastructure, including a proposal to launch a credit enhancement instrument to de-risk projects for developers and lenders, while mitigating government's need to add to contingent liabilities.
The instrument is being developed with the support of the World Bank and is also being canvassed with private reinsurers.
It will initially be used to support independent transmission projects (ITPs), with the lack of electricity grid infrastructure having emerged as a constraint to connecting new renewable-energy plants.
The National Treasury confirmed that a pilot ITP project was being prepared for next year using a build-operate-and-transfer model, but did not provide further specifics regarding the institutional arrangements.
However, ongoing reference was made to the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) as a "template" for the procurement of public infrastructure.
The REIPPPP projects have been procured through a dedicated structure known as the IPP Office.
It was also confirmed the credit-enhancement vehicle would be operational by the end of 2025 and that the tool would be used as part of the new blended financing risk-sharing platform to help de-risk the ITPs.
The lessons learned from the REIPPPP in unlocking private-sector investment were also being drawn on to increase private participation in transactions in other sectors, notably water and freight logistics, where the credit-enhancement vehicle would be introduced over the medium term.
In water, the private sector could participate through performance-based contracts and public-private partnerships (PPPs).
"Performance-based contracts for the nonrevenue water programme [water leaks] are being fast-tracked in the eThekwini, Tshwane, Nelson Mandela Bay, Buffalo City and Mangaung metros."
Meanwhile, Trans...

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The National Energy Regulator of South Africa (Nersa) has approved four new electricity trading licences, the issuance of which had been opposed by Eskom, along with the country's first-ever private import/export licence.
The Energy Regulator, which is Nersa's highest decision-making body made the approvals during their meeting on October 29, agreeing with the approval recommendation agreed to by the Electricity Subcommittee on October 1.
Trading licences were issued to CBI Electric Apollo, Discovery Green, Green Electron Market and GreenCo Power Services, while the import/export licence was issued to GreenCo Power Services.
Nersa fulltime regulator member for electricity Nhlanhla Gumede noted Eskom's objections, which were made by its distribution division during public hearings held on July 18.
Eskom argued that Nersa was prohibited from allowing two or more licensees in a single distribution supply area and accused the traders of "cherry picking customers".
The objection was lodged despite the fact that Nersa had already issued six trading licences since 2014 to PowerX, EnPower Trading, Neura Trading, Energy Exchange of Southern Africa, Envusa Trading and to Eskom Holdings' National Transmission Company South Africa (NTCSA).
Gumede said a distinction had to be made between a distributor, the number of which needed to be restricted to ensure the efficient and safe operation of the physical distribution network, and traders, which facilitated the buying and selling of electricity over those networks but did not operate them.
He indicated that there was no legislative or regulatory restriction on the number of traders and noted that the Electricity Regulation Act encouraged competition; a principle that had been reinforced and amplified in the Electricity Regulation Amendment Act to which President Cyril Ramaphosa had recently assented.
Nevertheless, he did highlight the urgent need for Nersa to finalise a framework and rules for electricity traders as well as for wheeling given the prospects of many more trading applications in the coming years.
The Energy Regulator also agreed that additional work was required to firm up the framework for import/export licences, when approving GreenCo's ground-breaking application.
Africa GreenCo CEO Ana Hajduka described Nersa's decision to grant the company the two licences as a "powerful endorsement of the potential for private sector collaboration to drive South Africa's energy transformation in collaboration with key players like Eskom and NTCSA".
GreenCo commercial manager for South Africa Precious Mpepele added that the import/export licence would drive a transparent, interconnected energy market in Southern Africa to deliver renewable electricity.
The company had signed long-term power purchase agreements (PPAs) with independent power producers in South Africa and Botswana and the trading and import/export licences respectively would enable GreenCo to sell electricity bought from those suppliers to Sibanye-Stillwater operations in South Africa.
Apollo Africa CEO Jenna Harris also welcomed Nersa's decision, which she said reaffirmed the regulator's commitment to uphold the Energy Regulation Act and promote broader participation in the electricity market.
"We firmly believe, as demonstrated in mature electricity markets, that competition is the most efficient way to reduce the cost of power to the market.
"This is in the best interest of our economy where electricity forms the foundation input costs for all primary and secondary industries in South Africa," Harris added, indicating that Apollo looked forward to working with Eskom to assist in jointly shaping a new and sustainable market structure.
Sturdee Energy executive director Andrew Johnson told Engineering News that the award of a trading licence to Sturdee Energy's Green...

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South Africa will call for the New Collective Quantified Goal (NCQG) on climate finance to be set at $1.3-trillion yearly during the upcoming COP29 climate negotiations, which will be held in Baku, Azerbaijan, from November 11 to 22.
The NCQG is the finance goal that parties to the Paris Agreement are expected to set prior to 2025 from the current yearly floor of $100-billion; a target that developing countries have long argued as being too low and have also criticised developed countries for failing to honour.
During stakeholder consultations ahead of COP29, Forestry, Fisheries and the Environment Minister Dr Dion George argued that the current financing mechanisms had proved insufficient in scale and effectiveness, which he said highlighted the urgency for a new financing model.
"COP29 presents an opportunity to advocate for innovative and improved financial frameworks that can mobilise substantial resources more efficiently.
"Such a model must ensure predictable, accessible, and adequate funding, and address the shortcomings of existing systems and empowering countries like South Africa to implement ambitious climate actions."
The NCQG, the Minister added, should provide a clear and ambitious quantification of the financial support needed by developing countries to implement their Nationally Determined Contributions (NDCs) or decarbonisation pledges, as well as their National Adaptation Plans, and should also reflect their inclusive just transition pathways.
"Access to finance must be significantly scaled up to offer new, additional, and predictable funding that is fit for purpose.
"Specifically, we need grants and highly concessional financing that can be effectively allocated to create enabling environments for rapid investments.
"By de-risking investments and creating new asset classes for clean technologies, we can unlock and leverage greater amounts of public and private finance," George said.
Business Unity South Africa (Busa) environment and energy director Happy Khambule concurred, saying that the NCQG should be larger and more comprehensive.
"Current climate finance flows have been insufficient and non-additional, shifting the disproportionate cost of climate action to developing economies despite their limited fiscal capacity.
"Recent proposals for cross-border tax adjustments - targeting goods imported from developing countries to fund developed country climate obligations - are particularly concerning," Khambule added.
Busa also supported the principle that developed economies should provide financial, technological, and capacity-building assistance, but stressed that this support should not place undue financial burdens or impose unjust conditions on developing countries.
"Crucially, climate finance should not exacerbate current developing country debt crises.'
Presidential Climate Commission executive director Dr Crispian Olver, who has been appointed deputy chair of the commission from January 1, said COP29 and progress on the NCQG was crucial for setting the tone for the next round of NDCs, which countries were expected to lodge in 2025.
The current NDC's are not aligned with the goal of limiting global warming to 1.5°C above pre-industrial levels.
The 'Emissions Gap Report 2024' published by the United Nations Environment Programme recently warns that unless the level of NDC ambition is increased and there is faster implementation, the world is on course for a temperature increase of between 2.6°C and 3.1°C over the course of this century.
South Africa plans to submit its new NDC in June, with consultations expected to start in April.
Olver highlighted that securing NDC ambition would be challenging in the current geopolitical environment.
Nevertheless, he argued that South Africa should do what it could to ensure that the Baku gathering represented...

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The automotive industry is "definitely seeing progress" in its discussions with Transnet on developing the southern rail corridor between Gauteng and Gqeberha and Coega, in the Eastern Cape, says Ford Motor Company Africa president Neale Hill.
Discussions on this project started in 2019 already.
Vehicle manufacturers in Gauteng - BMW, Ford and Nissan - currently move their vehicle exports mainly through Durban.
These manufacturers also have to transport imported components to their plants via Durban, as well as bring in imported vehicles for the local market.
Ford's logistics via the Durban port are currently divided between rail and road.
The local arm of the US vehicle manufacturer produces the Ranger bakkie for the local and export markets at its Silverton plant in Pretoria.
"We are making progress in our discussions with Transnet," says Hill. "We'd like there to be more progress, but we are seeing movement, especially now that Transnet has a new management team.
"You are now dealing with people with years of experience; people who have grown up in the organisation."
Hill notes that there is a vulnerability in a system where so many vehicle manufacturers are dependent on a single export route.
"All of us would consider Gqeberha. Look at the recent floods in Durban and snow in KwaZulu-Natal and how that affected exports.
"We, as Ford, must also support a very specific shipping schedule, and these vessels don't wait if there is a snarl-up on the highway."
This said, Hill notes that Transnet has moved to improve the rail service between Gauteng and Durban.
"We are seeing greater capacity coming in on the Durban line for automotive. The line is being upgraded and we are seeing more trains coming through - but, again, we would definitely like to see more happen.
"With our production schedule we would ideally like to see more vehicles on rail as opposed to vehicles going on the roads."
Hill says Ford has no preference as to whether the southern corridor is operated by Transnet, a private-public partnership, or a third-party operator.
"We are not prescriptive as to what the ultimate solution should look like, but we would like something that is effective, efficient and reliable.
"And, as I said, our engagement with Transnet has been phenomenal. We do see some green shoots."
Ford produces between 650 to 680 Rangers a day, of which around 65% is exported, says Hill.
"You are looking at exporting 400 vehicles a day, so we want four trains a day - and that's just us, not Volkswagen, BMW or Nissan.
"We also import components for the Silverton plant.
"As an industry, we believe there is enough opportunity to fill the railway line both ways."
The Volkswagen, Isuzu and Mercedes-Benz plants are located in the Eastern Cape and also need to transport their vehicles - made locally and imported - to customers in the north of the country.
Hill says he hopes to see material movement on the development of the southern corridor in the next 18 to 24 months.
Naamsa | The Automotive Business Council and Transnet earlier this month signed a memorandum of understanding (MoU) to convene a naamsa-Transnet 'auto war room'.
This war room will drive the collection, consolidation and sharing of data to support the implementation of strategic initiatives, while it will also monitor key railway performance indicators, slot availability/capacity, and rolling stock availability and utilisation.
The MoU also supports the development of priority infrastructure projects by the State railway owner, including the southern corridor.

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A new matchmaking platform to directly link providers of grant funding pledged to South Africa's Just Energy Transition Investment Plan (JET-IP) with domestic beneficiaries is aiming to ensure the disbursement of at least R600-million in grant funding to 20 projects in 2025 and facilitate disbursements of R1.5-billion to 50 projects in 2026.
Grant recipients could include local small firms, trade unions and municipalities, as well as community-based and nongovernmental organisations.
Known as the JET Funding Platform, the online tool was officially unveiled at a function in eMalahleni, Mpumalanga; the province identified as "ground zero" for South Africa's efforts to cushion workers and communities whose lives and livelihoods could be negatively affected by the shift from coal to renewable energy.
The website through which potential grant beneficiaries can apply for funding will be launched on November 1.
Speaking at the JET Funding Platform unveiling on October 25, Minister Patricia de Lille, who spoke in her capacity as acting Electricity and Energy Minister, said the platform was not a fund itself, but rather a way to improve visibility of the pipeline of potential JET projects that could be supported by grant funders.
A total of $821-million in grant funding linked to South Africa's JET-IP has been pledged by the International Partners Group of France, Germany, the UK, the US and the EU, which have now been joined by Denmark and Netherlands, as well as by Canada, Switzerland and Spain, which are supporting the JET-IP bilaterally.
Grants make up a small portion of the larger $11.6-billion pledged in support of South Africa's JET-IP, which will target investments in the electricity, new energy vehicle and green hydrogen sectors. The bulk of the funding is being made available in the form of concessional loans, including policy-linked loans to the National Treasury.
While South Africa is continuing to call for yet more grant funding there has also been criticism that the initial grants have been directed mainly towards entities and consultants from the countries providing the funding.
The funders, meanwhile, have indicated that the pipeline of potential grant-ready domestic projects is limited.
The development of the matchmaking platform, which has been overseen by the JET project management office in the Presidency, is accompanied with a plan to further grow the pipeline by providing project preparation support to potential beneficiaries.
JET Funding Platform manager Jerrod Moodley said at the launch that various initiatives would be undertaken to support potential beneficiaries with their project preparation so as to expand the number of grant-ready applications that could be made through the online system.
Once an application was submitted, Moodley said that it would be assessed against the eligibility criteria set for the JET-IP, as well as whether it was ready to be proposed to a potential funder.
Funders would then complete their own assessments before deciding whether or not to approve a grant.
The category of projects that could receive support has been broadened well beyond climate-mitigation projects to include projects that could enable the transition, those that were supportive of economic transformation, community empowerment and ownership, as well as those that could promote economic diversification, improve governance and compliance, and projects deemed to have a high and sustainable impact.
"JET Funding Platform stands as a beacon of hope - a mechanism designed to connect the most deserving projects and communities with the critical grant funding needed to achieve objectives set out in the JET-IP," De Lille said.

Engineering News editor Terence Creamer discusses government's review of the current framework through which electricity capacity is procured from independent power producers (IPPs); the reasons for the review; and what changes are being considered.

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Despite welcome relief from loadshedding in South Africa, a total of 3.3 GW of renewable-energy projects were registered with the National Energy Regulator of South Africa (Nersa) this year, with more than 2 GW registered in the third quarter alone.
Analysis conducted by Gaylor Montmasson-Clair, senior economist at Trade and Industrial Policy Strategies, indicated that the surge in registrations during the quarter, from 606 MW in the first quarter and 732 MW in the second, could be attributed to a few large projects.
These included a 475 MW solar PV project in the Free State, which Montmasson-Clair described as the biggest single registration since such projects were exempted from licensing in 2021, as well as a 380 MW wind farm in the Western Cape, a 310 MW wind farm in Mpumalanga and a 240 MW wind project in KwaZulu-Natal.
He said the strong performance during the quarter, which was the second best since the licensing exemption was introduced, may indicate that economics rather than loadshedding was now driving the market.
The highest number of registrations recorded in a single quarter was the 2 467 MW registered by Nersa in the first quarter of 2023 when South Africa was experiencing almost daily loadshedding.
Montmasson-Clair noted the prominence of wind projects, as well as the rise in registrations in the Mpumalanga province; developments that were supportive of both system stability and diversity and a just transition in the main coal region of South Africa.
Electricity and Energy Deputy Minister Samantha Graham-Maré also highlighted the rise in registrations during the third quarter, describing the surge as a milestone and a "sign of confidence in South Africa's renewable-energy market".
"Our goal is to accelerate even more gigawatts of renewable energy by continuing to remove unnecessary institutional red tape and making South Africa an even more attractive proposition for investors," Graham-Maré said in a statement.
Her commentary follows confirmation by Electricity and Energy Minister Dr Kgosientsho Ramokgopa that the procurement framework was being reviewed for projects procured through public bid windows.
Such projects had faced relatively more difficulties in recent years in advancing to financial close than was the case in the private-to-private market, for which Nersa registrations offered a proxy.
Particular attention was being given to ensuring that future procurement processes were conducted in a way that available grid was utilised, through curtailment and possible regional bidding rounds, as well as to the streamlining of grid-connection processes.
Consideration was also being given to holding smaller, more frequent bid windows so as to improve competitive outcomes and create a smoother pipeline of projects around which local industrial capacity could be developed.
The outlook for private procurement, meanwhile, was difficult to forecast, with Montmasson-Clair noting that the quarterly data were heavily influenced by a few large-scale projects.
"But, overall, 2024 looks like another solid year for the private market," he said.
The pipeline of private projects being tracked by Operation Vulindlela, which is a joint initiative of the Presidency and the National Treasury, stands as 22.5 GW, while the latest edition of the South African Renewable Energy Grid Survey pointed to projects with a combined capacity of 133 GW at various stages of development across the country.
The result represented a dramatic increase from the 66 GW highlighted in the 2023 edition.

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Nissan South Africa (SA) will see production drop to under 20 000 units this year, down from almost 25 000 units last year, but it is not the end of local assembly at the Rosslyn plant, says MD Maciej Klenkiewicz.
The drop in production follows the Russian invasion of Ukraine, which railroaded Nissan's efforts to find a successor for the successful NP200 half-ton bakkie, which sold around 10 000 units a year in the South African market.
"It wasn't our choice to end production of the NP200. Unfortunately, it is one of those occasions where global politics influenced what happened in South Africa," says Klenkiewicz.
"We had a plan for a successor to the NP200. It was supposed to be built on a platform created in Russia, together with Renault.
"When we exited Russia, we left behind the entire project. It was a big loss - it was more than 40% of our volume, so it was significant."
The loss of the half-tonner saw Nissan SA wrap up a process last year to shrink its workforce by 28%.
In terms of product, the Datsun range was also discontinued in 2022, which hurt Nissan SA in the budget-car market, and this in a domestic economy that has been failing to gain traction.
Nissan SA's product portfolio now consists only of the Navara pickup (produced in Rosslyn in single-cab and double-cab versions), as well as the Magnite and X-Trail sports-utility vehicles (SUVs).
Klenkiewicz and his team, however, have plans to expand vehicle assembly at Rosslyn and to grow the Nissan product portfolio in South Africa.
Tweaking the Navara range to better suit customer needs has seen production and sales of this one-ton bakkie increase by 28% from April to end-September, says Klenkiewicz.
In South Africa, sales are up 25%, and this in a declining bakkie market.
This year will also be the first time in a long time that Nissan SA's Navara export volumes will be higher than its domestic Navara sales.
Nissan SA is hard at work to secure more export destinations in Africa and the Middle East, with Rosslyn the only Navara source plant for Africa.
Klenkiewicz says sales have already expanded into Egypt and Libya, with Algeria next on the list.
Ghana, with its own semi-knockdown plant, is currently the car maker's biggest export market.
"We are trying to maximise our opportunities; we are trying to keep production as high as possible in Rosslyn."
Klenkiewicz also aims to introduce new products for assembly in the Rosslyn plant.
"We are working on solutions in terms of light commercial vehicles and pickups. Of course, our priority is to find a successor for the NP200, but we have been forced to start from the beginning, so there will be a delay of up to two to three years."
Any new product that will be assembled will be in addition to Navara production, says Klenkiewicz.
The goal is for the Nissan SA plant to again reach 50 000 units a year - a figure where it can gain the full benefits of government's Automotive Production and Development Programme.
For this to happen, the company may have to look at two new products for local assembly, and not just one, but this process is likely to take more than five years.
In terms of the local product line-up, the Japanese marque will bring in a new five-seater and seven-seater SUV to South Africa in 2026 - both bigger than the Magnite - potentially doubling sales in South Africa, says Klenkiewicz.
"We are also working - it has not been confirmed yet - to bring in a product below the Magnite, in the A-segment. This may come in before 2026."
This first 'new' Nissan product that will make its debut, however, is the Magnite cargo version, due out before the end of the year.
This converted SUV, already available in India, targets the delivery and/or last-mile logistics sector.
Chinese Competitors
Nissan is feeling the heat of the influx of Chinese brands into South Afri...

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There is potential to catalyse rapid industrialisation in Africa by pursuing policies that actively leverage both existing demand and continental moves towards trade integration to increase the production of manufactured goods, a well-known industrial policy and automotive specialist has argued.
Speaking at the Manufacturing Indaba in Johannesburg, Toyota Wessels Institute for Manufacturing Studies' Professor Justin Barnes made the case for developing regional value chains that tapped into existing demand rather than seeking only to sell into growing African markets.
Using the example of the African automotive market, which Barnes has studied extensively, he argued that there was potential for significant manufacturing growth using regional value chains to overcome the current constraints of insufficient economies of scale, limited production capabilities and the ongoing importation of used vehicles.
While his research pointed to a weak outlook for new vehicle sales in South Africa, owing to dim prospects for the growth of the middle class, he pointed to a far more promising prognosis for several countries in both East and West Africa.
Using a yearly income threshold of $10 000 for an adult in Africa to be in a position to buy a car, he argued that African vehicle sales could rise to about 3.4-million by 2035 from an estimate of about 2.5-million units in 2025.
The forecast was based on current economic and income growth forecasts, as well as an assumption that countries terminated policies allowing for the importation of pre-owned vehicles from other regions.
The forecast also catered for Barnes' assessment that South African vehicle sales, which were currently the highest on the continent, were likely to lift only modestly over the period, from about 563 000 to about 614 000.
By contrast, there were potential high-growth nodes in West Africa, where Nigerian sales could rise from about 241 000 vehicles to 350 000 and Ghana could increase from 81 000 to 148 000, as well as East Africa, where Kenyan sales could rise to 156 000 by 2035 from 93 000.
Barnes also exhibited results from his recent modelling of automotive sales in the Economic Community of West African States region, where the combined sales of Côte d'Ivoire, Ghana, Nigeria and Senegal were set to surpass those of South Africa from 2028 onwards.
"This indicates that there are huge opportunities for the development of the automotive industry across Africa," he said.
Besides addressing the problem of second-hand imports, he also said that far greater emphasis should be given by policymakers to the micro, meso and macro interventions needed to support regional value chains and the implementation of the African Continental Free Trade Area Agreement.
However, it also required soul searching about what types of society African government's wanted to build.
These visions would have to be supported by an organisational framework that allowed governments to connect with the private sector and for African companies to connect with one another, as well as policies that bolstered not only skills but also the capability of individuals and companies.
For South African manufacturers to align themselves with the opportunity, a different mentality would also be required from the one that currently prevailed, Barnes argued.
"We cannot repeat a colonising model, which is my experience of South Africans, who just want to trade in Africa.
"We have to think about how South Africa actually operates as an African economy and work towards regional value chains."
Creating what he called "deep collaboration" would necessarily involve providing access to the South African market for other African companies.
"It's not about being nice to one another, because that is what is actually needed to escape the confines of a very small market an...

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The South African government is considering far-reaching changes to the way public procurement of independent power producer (IPP) generation capacity is being carried out so as to accelerate deployments in a way that navigates the country's prevailing grid constraints, while also creating the certainty needed to support green industrialisation.
The changes were considered necessary to facilitate the procurement of some 10 GW of additional renewables capacity covered by the Ministerial determinations issue to enable procurement, including capacity available for re-allocation from previous bidding rounds where projects were either not selected or did not advance to construction.
Electricity and Energy Minister Dr Kgosientsho Ramokgopa has praised the performance of the IPP Office in its procurement of mostly renewable-energy capacity since 2011, noting that about 8.2 GW of IPP capacity from 107 projects was currently either in operation or under construction. These projects have a combined investment value of about R272-billion.
However, during a briefing he also acknowledged that there was a need to adapt the procurement process in light of recent failures to advance projects selected as preferred bidders to financial close, as well as to navigate grid constraints and streamline the grid-connection processes, which had emerged as a serious bottleneck.
Besides a decision not to select any wind bidders for a 3.2 GW allocation released as part of Bid Window 6 (BW6) of the Renewable Energy Independent Power Producer Procurement Programme in 2022, 14 projects with a combined capacity of 1.4 GW selected as preferred bids under BW5 failed to advance to financial close, while five projects with a combined capacity of 1.6 GW had failed to close under the risk mitigation round.
The IPP Office has moved to pulling the bid bonds of bidders that did not achieve financial close during BW5, but head of legal Lena Mangondo reported during a briefing that this action was being challenged legally.
She also reported that the preferred bidder fees had been paid by the developers of risk-mitigation projects that failed to reach commercial close, but made no mention of whether their bid bonds were also being pulled by the IPP Office.
Ramokgopa said the pulling of the bid bonds was necessary for the credibility of the programme.
"These are legally binding documents … [and] we are going to pull the bid bonds. If we land in court, let's land in court," he said, expressing impatience with the fact that contracts were not being honoured.
"We must stick to the rules of this programme."
While no decisions had been made regarding the future procurement framework, which the Minister indicated would be finalised in the coming three to four weeks, the changes being considered included:
Working with Eskom to find alternative ways to reduced timelines for the issuance of grid connection cost-estimate letters and Budget Quotes (BQs);
Potentially conducting a bidding round specifically for projects that had received grid connection BQs from Eskom, or Eskom Holdings' National Transmission Company South Africa;
Finalising the curtailment framework that had already served before the National Energy Regulator of South Africa so as to immediately unlock grid in areas currently described as having no further connection capacity;
Pursuing regional procurement bid windows in areas shown in Eskom's Generation Connection Capacity Assessment as having immediate capacity available to connect new generation;
Reconfiguring bid windows to allow for separate procurement rounds for new wind and solar PV;
Considering "technology agnostic, system-requirement-focused bid windows that could involve collocated generation technologies and storage;
Reviving the wind and solar park concept so as to direct new generation to areas ...

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As fast-moving consumer goods manufacturer Tiger Brands continues to advance a bakery restoration initiative it launched in March this year, the company has identified the Western Cape as a key growth region to increase the current 20% market share of its Albany bread brand.
Nationally, Tiger Brands sells 1.3-million loaves of bread a week from nine bakeries across the country.
The bakery restoration initiative has been focused on recovering volumes in the inland region, reducing stock-keeping unit complexity, optimising depots, benchmarking bakeries, managing revenue better, delivering consistent quality and reducing overheads and other cost management efforts.
The company has also managed to improve margin leakage management and use science- and intelligence-based approaches to pricing and marketing, to ensure a more targeted strategy on pricing, sales and profits.
Some of Tiger Brands' key focus areas for the 2025 financial year across its bakeries include filling critical roles, ensuring stable relationships between management and labour, building more technical skills capacity and a diverse talent base, continuing wellness programmes and making Tiger Brands a good place of work, instilling its corporate values and enhancing communication forums.
Tiger Brands ultimately aims to have Albany become South Africa's most loved bread brand by being the lowest per unit cost producer, delivering superior quality with a relentless focus on efficiencies to drive sustainable and profitable growth for stakeholders - powered by a highly skilled team.
The company's operational improvements across its bakeries have also allowed it to make more positive impacts within the communities that it operates, with various programmes having benefited schools, old age homes and food distribution organisations.
Tiger Brands corporate affairs and sustainability chief Mary-Jane Morifi points out that the group's support to communities has improved access to nutritious food and people's ability to be self-sustaining with food gardens.
Additionally, Tiger Brands has helped communities advance infrastructure builds and reduce food and plastic waste.
Apart from its bakery optimisation drive, Tiger Brands has been advancing a groupwide optimisation effort over the last year. Tiger Brands group CEO Tjaart Kruger tells Engineering News that the group has made big changes to its operational management structure and streamlined its business divisions, which has allowed the group to offer more affordable products more widely.
CASE IN POINT
The Bellville bakery, in Cape Town, where Tiger Brands hosted an in-depth media tour on October 17, was commissioned in 2017 at a cost of R350-million.
The plant has the capacity to produce 12 000 loaves an hour on two baking lines, with its current utilisation rate being 7 500 loaves an hour, or 60% of capacity.
Bakery manager Sandra Pillay explains that the three-hour baking process at the plant starts with trucks unloading flour into silos, as well as yeast into condition tanks, with the mixing process thereafter involving the addition of water at the right temperature and ratio.
After mixing, the dough is divided to reach a baked weight of 700 g and rounded before resting, moulding and rising. The loaves are baked for 22 minutes before being cooled, sliced, bagged, coded and crated.
The plant services more than 3 000 outlets with a distribution footprint across the Northern Cape, Western Cape, Eastern Cape and the Overberg region.
The bakery recorded an increase in production from 64-million loaves in the 2017 financial year to 80-million loaves by the 2023 financial year. In the first half of the 2024 financial year, the bakery produced more than 38-million loaves.
Notably, the bakery has improved on the number of consumer complaints per million units between 201...

Engineering News editor Terence Creamer discusses the International Energy Agency's statement that the world is moving into the Age of Electricity; how the critical minerals demand associated with this coming age is an opportunity for Africa; and what this could mean for South Africa.

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South African consumers should, in the nearer future, receive some form of subsidy to buy electric vehicles (EVs), as has been the case in most major markets in the world.
These subsidies are aimed at assisting car buyers to transition to these cleaner, but still more expensive, vehicles.
Speaking at the South African Automotive Week 2024, held in Cape Town and hosted by naamsa | The Automotive Business Council, President Cyril Ramaphosa on Thursday fulfilled two of the domestic automotive industry's long-standing wishes.
"The Department of Trade, Industry and Competition, National Treasury and the Department of Mineral and Petroleum Resources are in conversation about implementing the EV White Paper [released last year].
"This work includes the beneficiation of critical minerals, the production of new-energy vehicles (NEVs) and their associated value chains," noted Ramaphosa.
"It also includes the production of batteries for battery-electric vehicles (BEVs) and the development of value-chains in the green-hydrogen fuel-cell market."
NEVs refer to hybrids (less green at the tailpipe), plug-in-hybrids (PHEVs - more green) and zero-emission BEVs (most green). The goal of the White Paper is to help South Africa's automotive industry transition to include NEV production of all types.
"We are working to finalise comprehensive NEV policy guidelines that do not exclude technologies such as hybrids and PHEVs," noted Ramaphosa.
"So, consideration must be given to incentives for manufacturers - as well as tax rebates or subsidies for consumers to accelerate the uptake of EVs."
Ramaphosa did not provide a timeline for the finalisation of these guidelines.
"This is not just about a greener future, but also about ensuring that South Africa remains competitive in the global market," he emphasised.
"As many of our major trading partners rapidly shift to EVs, there is an imperative that we remain part of this global supply chain. If we don't, we'll be left behind."
The president's announcement, which was met with enthusiastic applause, comes as some vehicle manufacturers have expressed concern that hybrids and PHEVs have been excluded from the EV White Paper, with companies such as Toyota, Mercedes-Benz and BMW already producing PHEVs and hybrids at their local plants.
No BEVs are currently produced in South Africa.
South Africa's vehicle makers have also been advocating for NEV sales incentives for quite some time.
Domestic sales of NEVs - especially the more expensive PHEVs and BEVs - have been slow in South Africa, frustrating efforts by manufacturers to produce these vehicles for the local and export markets.
For the year-to-date end-August, NEV sales totalled 8 333 units. Within this number, BEV sales were at 871 units, PHEV sales at 346 units, and hybrid sales at 7 116 units.
Export Crunch
Europe and the UK are South Africa's biggest new-vehicle export markets, with 75% of the 400 000 vehicles exported last year finding their way to these regions.
However, Europe is set to ban internal combustion engine (ICE) vehicles by 2035, forcing South African vehicle manufacturers to either adapt, or potentially lose this market.
Two out of every three vehicles produced in South Africa are destined for the export market.
Many vehicle manufacturers are also set to abandon ICE production altogether as the global green economy gathers speed.
China has also emerged as the world's biggest BEV producer, with South Africa courting the likes of powerhouse BYD, an NEV-only producer, to set up a local plant. For that to happen, however, some degree of local uptake would be required.

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South African manufacturer Malben Engineering, of Nigel, is pioneering the use of green steel in the production of automotive components for leading local original-equipment manufacturers (OEMs).
The company, which was established in 1974 and has developed into a Tier 1 supplier of stampings and welding components including for Ford South Africa, is trialling low-carbon steel produced by Salzgitter, of Germany, as part of the Salzgitter Low Carbon Steelmaking programme.
Still led by one of its original founders Amerigo Smargiasso, Malben Engineering has taken delivery of what is believed to be the first-ever green steel coil on the African continent, imported with the support of value-adding steel processor and merchant Allied Steelrode.
Operational director Luca Smargiasso believes the integration of green steel could be a "game changer" for the level 4 broad based black economic empowerment company in light of the increased use of low-carbon steel by global OEMs and given growing pressures to decarbonise the local steel supply chain.
"Companies such as ours are at the forefront not only of understanding this change, but ensuring that we are a market leader in the usage of green steel, which in the future will be as sought after as white gold," Smargiasso asserts.
Allied Steelrode chief marketing officer Lee-Ann Geyser also highlights that Europe, which is South Africa's main automotive trading partner, is moving to introduce taxes on imports with high carbon footprints.
These border adjustments could ultimately mitigate the higher cost of using green steel; costs that the three partners have agreed to absorb for the trial.
"This is no longer just a moral or environmental choice, but a strategic business decision," Geyser adds.
Local Salzgitter agent Shane Barnard, of United Steel, is confident that the price gap between grey and green steel will close over time, as new regulations are introduced and the uptake of green steel rises.
National Association of Automotive Component and Allied Manufacturers Renai Moothilal says the trial is also aligned with the South African Automotive Masterplan 2035 vision for higher levels of localisation, where decarbonisation is becoming a priority in each OEM's sourcing decisions.
About 0.48 t of carbon dioxide (CO2) is emitted when producing a tonne of green steel, compared with the up to 2.4 t of CO2 emitted for every tonne of grey steel.
"First movers and early adopters such as Malben Engineering should be well placed when these decisions are made - as their emission reduction strategies have been tried and tested, removing risk from sourcing," Moothilal says.
Malben Engineering, Allied Steelrode and Salzgitter will now evaluate the mechanical and chemical performance of the green steel to compare its quality-related aspects with conventional steel in areas such as formability to welding, and the potential for corrosion during transportation.
Luca Smargiasso is confident that discrepancies are unlikely, given that the steelmaking process rather than the end-product is adapted during the production of low-carbon steel.

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Two projects selected as preferred bidders under South Africa's inaugural Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP) bidding round have advanced to commercial close and will now enter construction.
The projects, named Mogobe BESS and Oasis Mookodi, have a combined capacity of 180 MW/720 MWh, and will be connected to transmission substations located near to Kathu in the Northern Cape and Vryburg in the North West province respectively.
The battery storage projects are expected to enter into commercial operation in September 2026 and have a combined investment value of R5.3-billion.
Mogobe BESS is being developed by a consortium led by Scatec, while Oasis Mookodi will be constructed by a consortium led by EDF Africa. Both consortia also include local, black-empowerment and community-trust ownership.
A signing ceremony for what are South Africa's first standalone grid-scale, private-sector battery projects procured under the government's BESIPPPP was held in Cape Town on October 16 and attended by Electricity and Energy Minister Dr Kgosientsho Ramokgopa.
The construction phase, which is scheduled for the coming 24 months, is expected to create 217 jobs.
The projects have committed to spending 11% and 20% of total costs, respectively, on local content during construction, and 20% and 26% of total costs on local-content, respectively, during operations.
Once in operation, the projects will store energy during periods of low demand and release the electricity during peak demand periods, or when needed to stabilise the grid.
The installations will also offer ancillary services to the system operator and allow for more renewable energy to be integrated onto the grid.
The Independent Power Producer Office also announced that two of the remaining three projects selected as preferred bidders during Bid Window 1 were expected to reach commercial close by the end of November, while the fifth bidder is preparing for commercial close in early 2025.
Meanwhile, the announcement of preferred bidders from BESIPPPP Bid Window 2, where 615 MW/2 460 MWh is being procured, will be made within weeks, while bid submissions under Bid Window 3, where a combined capacity of 616 MW/2 464 MWh is being procured, is scheduled for the end of October.

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It is important for government to not only pursue new investors, but to also look after current investors already doing business in South Africa, says Naamsa | The Automotive Business Council president Billy Tom.
Tom is also the CEO of Isuzu Motors South Africa. The local arm of the Japanese manufacturer is based in Gqeberha, in the Eastern Cape, where it assembles trucks and the D-Max bakkie for the local and export markets.
Speaking at the South African Automotive Week 2024 held in Cape Town this week, Tom questioned South Africa's "obsession" with garnering new investments - "we always want to go and stand and cut ribbons" - while not looking to those companies which had already invested in South Africa, while "they were bleeding".
Tom also noted that investment was like water, and that it would follow the path of least resistance.
"And we've made it really difficult to invest [in South Africa]."
While Tom was, generally speaking, optimistic about the Government of National Unity, he believed there remained a "big trust deficit" between the private sector and government, despite the recent combined effort to tackle loadshedding.
He lamented the fact that some Cabinet ministers remained dead-set against private participation in the areas where there existed government monopolies, and that the label of 'white monopoly capital' was so often handed out around boardroom tables.
Naamsa had by Wednesday not yet met with the new Minister of Trade, Industry and Competition Parks Tau.
The automotive industry contributes more than 5% to GDP and is the country's largest manufacturing sector.

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With the global energy system moving into the "Age of Electricity", the International Energy Agency (IEA) has again highlighted the central role of Africa in producing the critical minerals required to support the electrification of energy services, such as transportation, previously dominated by fossil fuels.
Releasing the 'World Energy Outlook 2024' report, IEA executive director Fatih Birol argued that it was becoming increasingly evident that the future of the global energy system was electric.
"We've witnessed the Age of Coal and the Age of Oil - and we're now moving at speed into the Age of Electricity, which will define the global energy system going forward and increasingly be based on clean sources of electricity," Birol asserted.
Global electricity demand growth, the report added, was already growing at twice the pace of overall energy demand and was poised to accelerate further, adding the equivalent of Japanese demand to global electricity use each year under current policy settings.
Low-emissions sources of electricity were also set to generate more than half of the world's electricity before 2030, with demand for coal, oil and gas projected to peak by the end of the decade.
While there was uncertainty over how fast the share of electric vehicles would grow from their current share of about 20% of new car sales worldwide, a rise to 50% by 2030 would displace around six-million barrels a day of oil demand.
"If the market share of electric cars were to rise more slowly, remaining below 40% by the end of the decade, this would add 1.2-million barrels a day to projected oil demand in 2030, but there would still be a visible flattening in the global trajectory."
For clean electricity supply to continue growing at pace, the report stressed the need for investment in electricity grids and energy storage.
"Today, for every dollar spent on renewable power, 60 cents are spent on grids and storage, highlighting how essential supporting infrastructure is not keeping pace with clean energy transitions.
"Secure decarbonisation of the electricity sector requires investment in grids and storage to increase even more quickly than clean generation, and the investment ratio to rebalance to 1:1."
The report confirmed there to be ample clean energy manufacturing capacity to support an even faster transition of the electricity sector to cleaner sources of supply such as solar PV and wind.
However, the IEA argued for a diversification of supply chains, including for critical minerals.
While not described as a binding constraint to the growth of renewables, battery storage and electric vehicles, the IEA highlighted potential supply deficits for minerals such as copper, lithium, nickel, cobalt and graphite for the period to 2035.
Here, the agency also saw "upside potential" for Africa, which was already a key player in the global critical minerals mining sector, accounting for 70% of global cobalt production and 16% of global copper production.
"In 2022, mining and extractive industries represent over 30% of total exports in 23 African countries, and critical minerals produce around $20-billion of revenue each year across the continent.
"The Democratic Republic of Congo, South Africa, Zimbabwe and Mozambique are leading producers, but a number of other countries also contribute."
Spending on critical mineral exploration in Africa was also rebounding after years of decline, while new projects were set to expand Africa's share of copper, lithium and natural graphite production by 2030.
"Supporting the existing mining project pipeline requires at least $1.3-billion in cumulative capital investment by 2040, with a possibility to reach around $1.8-billion if projects that are at slightly less advanced stages of development, or are seeking financing and/or permits are also considered.
"...

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New-vehicle exports from South Africa were down 9.2% for the first half of the year compared with the same six months last year, says naamsa | The Automotive Business Council president Billy Tom.
This follows a new record, set last year, at 399 594 new vehicles exported. Three-quarters of South Africa's new-vehicle exports were destined for Europe and the UK.
Tom spoke at the South African Automotive Week 2024, held in Cape Town this week.
Some of the decline in exports could be linked to model changes, such as the new X3 only rolling off the assembly line at BMW's Pretoria plant this month, with overseas customers opting to rather wait for the new-look vehicle.
However, the softening in South Africa's export markets could also be linked to some key economies facing slow or no economic growth.
European markets also faced an influx of Chinese imported vehicles, similar to South Africa, with some consumers opting for a cheaper alternative to a traditional Korean, Japanese or Western vehicle.
naamsa Manufacturing Original-Equipment Manufacturers VP Peter van Binsbergen - also BMW Group South Africa boss - said these events had impacted not only South Africa's exports to these markets, but also local vehicle production, with production also down 9.2% for the first six months of the year.
"It is good to have a large customer base in Europe. However, the downside is that developments in this region have a direct and measurable impact on our industry.
"This means we need to work together - government, labour and industry - to ensure we attract the maximum production allocation to our factories here in South Africa.
"We need to do everything we can to be the first choice when it comes to production allocation and that is largely in our hands here in South Africa."
Parent companies, such as Germany's BMW and the US's Ford, would typically allocate a certain model's production to a plant in its global production network based on that plant's global competitiveness and efficiency.
naamsa immediate past president Neale Hill noted that SA Inc's performance still required improvement in some areas, with electricity stability a major issue in the Eastern Cape, which housed a number of automotive plants, such as Volkswagen and Isuzu.
"It remains a competitive environment. We need agile and nimble policy support, and we need to think about the efficiency of our infrastructure - our ports and rail network."
Van Binsbergen added that South Africa's bilateral trade agreements were also key in safeguarding and/or growing domestic auto production and exports - such as the US's African Growth and Opportunity Act - while there existed "massive potential" within the African Continental Free Trade Agreement.
As for the influx of Chinese imports into the local market, he noted that the South African government had to incentivise these bands to set up production facilities in South Africa, as it had done with existing manufacturers.
DRIVETRAIN CONUNDRUM
Some of Europe's struggles revolved around the question of the future drivetrain make-up of this market, especially the proposed 2035 ban on internal combustion engines, said Van Binsbergen.
He said there had been a notable drop in demand for battery electric vehicles (BEVs) in Europe this year after governments reduced their incentives for these vehicles, while demand for hybrids remained surprisingly robust.
According to EU sales reports, Europe's BEV market share reduced from 19% to 13% year-to-date in 2024, with the plug-in hybrid (PHEV) market share remaining constant, at 6%.
Only traditional hybrids showed strong growth to date this year, reaching a 30% share of the European market.
"This means it is important for the South African automotive industry that hybrids are not excluded from the drive to localise new-energy vehicles (NEVs)," warne...

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A policy decision to allow electricity-intensive companies operating in South Africa to enter into negotiated pricing agreements (NPAs) with Eskom is set to contribute 5.7% to any tariff increase approved for implementation on standard-tariff customers on April 1 next year.
Eskom has included an application for 10 additional NPAs in its larger submission to the National Energy Regulator of South Africa (Nersa) for allowable revenue of R445.6-billion for its 2026 financial year. If approved in full, this would translate to a 36.15% tariff hike next year and raise the standard tariff to 266.78c/kWh from 195.74c/kWh.
Eskom has not disclosed a revenue value associated with accommodating the subsidy for the 10 additional NPAs included in its submission. However, a 5.7% increase on Eskom's allowable revenue of R352-billion for the 2025 financial year implies that an additional R20-billion is being sought.
In the submission, Eskom indicates that electricity sales to NPA customers will be about 23 TWh a year, while it estimates sales to standard-tariff customers of 152.8 TWh.
If accepted by Nersa, the 152.8 TWh in sales would represent a significant decline from the 170 TWh estimated for the current financial year, when only two NPAs with South32 and Sublime Technologies were accommodated in the tariff.
However, it is possible that the sales assumption will be adjusted during the upcoming public hearings in light of more stable operating conditions across the coal fleet, which has resulted in a suspension of loadshedding for more than 200 days, and the higher growth expectations associated with the formation of the Government of National Unity.
Should that be the case, the requested tariff hike could be moderated.
Eskom also does not include the names of the 10 additional NPA beneficiaries, confirming only that it has implemented such agreements with customers in the aluminium, ferrochrome, and silicon carbide sectors in line with NPAs approved by Nersa in accordance with the frameworks approved by the Department of Mineral Resource and Energy.
The NPA framework was implemented by government in 2021 in a bid to prevent electricity-intensive businesses beneficiating mined commodities from curtailing or shutting production, owing to the steep rise in electricity tariffs.
Applicants for the incentive have to prove that electricity is a significant driver of their operating costs, and that they are consuming a minimum of 80 GWh yearly at a load factor of greater than 70%.
In its submission, Eskom says the NPAs are structured to ensure the global competitiveness of the sector from an electricity price perspective and to protect vulnerable sectors.
"South Africa is better off with these customers in the sales base as the NPA structure ensures the relevant variable costs of electricity supply are covered by the tariff and a positive contribution is made to the fixed cost.
"The typically flatter time-of-use and no seasonal differentiated NPA tariff could result in even usage throughout the year with a likely increase in sales which would partly offset the differential between the NPA tariff and standard tariff," it adds.
Eskom says that, in the absence of a NPA, the sustainability of several industries would come into question which could result in potential cut-backs in production or closures.
"This would result in additional upward electricity price pressure on the remainder of the customer base than would otherwise be the case due to loss of contributions to fixed costs."
Besides the NPA subsidy, Eskom has applied for a 29.58% increase in the affordability subsidy charge on key industrial customers, which helps cross-subsidise poor households, but adds about R7-billion to the revenue application.
In a briefing, CFO Calib Cassim stressed that the subsidies, together with several oth...

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Electricity and Energy Minister Dr Kgosientsho Ramokgopa has expressed confidence that tariff and non-tariff solutions can be found to ensure that Eskom is able to meet the obligations set by the National Treasury as part of the R256-billion debt-relief package while still allowing the entity to invest in new generation capacity.
In a briefing called to mark the fact that, as of October 13, loadshedding had not been implemented for more than 200 days, Ramokgopa expressed support for the State-owned entity's plan to build 2 GW of new wind and solar PV capacity over the coming two to three years.
CEO Dan Marokane said the idea was to pursue a "step change" in Eskom's renewables generation, which was currently limited to small-scale solar PV and the Sere Wind Farm and its pumped hydro schemes.
"We postponed the shutting down of some of our stations, as was initially planned, so as to enable us to shore up security of supply and also to enable us to do an orderly transition.
"[So] what we need to do is to really bleed in new technologies alongside our existing operations; on our land, on the back of the capacity that we have with our people and closer grid connectivity.
"And we have indicated that over the next two to three years, we see a pipeline of just over 2 GW of opportunities," Marokane said, referring specifically to solar PV projects alongside coal stations such as Lethabo, where the briefing was held, and the closed Komati station, where the solar PV plant would be coupled with battery storage.
He indicated that solar PV and wind could be added in close proximity to five coal stations in Mpumalanga, as well as at the Sere Wind Farm and indicated that Eskom was also still studying prospects for the Tubatse pumped hydro scheme.
The funding strategy for this new build had not yet been announced, but Marokane said it would involve own-build and partnerships with the private sector.
Such a funding strategy was suggestive of Eskom raising new debt; an activity that it was currently prevented from undertaking without the explicit permission of the Minister of Finance.
The National Treasury has also indicated that such approval would depend on Eskom showing proof that it was becoming more self-sufficient and less reliant on the taxpayer to remain a going concern.
The utility has argued that a rapid migration to cost-reflective tariffs would be required to improve its financial sustainability and it has made a revenue application to the National Energy Regulator of South Africa (Nersa) outlining its case for steep tariff hikes to support such a migration.
Known as the sixth multiyear price determination, the submission includes an application for allowable revenue of R446-billion for the 2025/26 financial year that, if granted, would translate to a tariff increase for direct Eskom customers of 36.15% on April 1.
Despite being Eskom's shareholder Minister, Ramokgopa has slammed the application as being "untenable", particularly in light of the Government of National Unity's second apex priority relating to reducing poverty and the high cost of living.
Nevertheless he denied that his stance was in contradiction with the National Treasury's expectation that Eskom transitions to tariffs that result in less reliance on the fiscus as a precondition for the conversion of debt to equity and for raising fresh debt for investments.
While stressing that he would not interfere with Eskom's application for new tariffs or Nersa's determination, he argued that a delicate balance could be struck to facilitate Eskom's shift to financial sustainability and shield poor households from another steep rise in electricity tariffs.
"The tariff is a transparent mechanism for supporting an entity such as Eskom . . . [but] then there are non-transparent policy instruments that we can use to ensure ...

Engineering News editor Terence Creamer discusses the official launch of the National Transmission Company South Africa (NTCSA); the immediate priorities of the entity; and whether it will find a model to allow independent power transmission projects to play a role in accelerating the rollout of the grid.

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An initial assessment by business into what it would involve to raise yearly freight rail volumes to 250-million tons, estimates that Transnet's recovery alone could lift yearly volumes to about 190-million tons, leaving 60-million tons to be met through reforms aimed at opening the rail network to private-sector participation (PSP).
The assessment also indicates that about R280-billion in investment will be required to reach the target.
Business for South Africa (B4SA) transport and logistics focal area senior executive Ian Bird told delegates to a Transport Forum that there was a firm commitment from all participants to the National Logistics Crisis Committee (NLCC) to achieving the target over the coming four to five years.
The target was viewed, he added, as the threshold at which rail would begin contributing positively to both economic growth and job creation, which would represent a major turnaround from an estimate that the sector had lopped up to R400-billion of gross domestic product in 2023 on the back of rolling stock and infrastructure backlogs.
Transnet Freight Rail (TFR) railed 152-million tons in 2023/24, following a collapse in volumes to 149-million tons in 2022/23 and has set a 193-million-ton "stretch target" for 2024/25.
However, Transnet CEO Michelle Phillips has confirmed that Transnet is not currently on track to meet the target, which business and government set as a precondition, along with several other measures, for raising South Africa's growth to 3% in 2025.
The growth target was set as part of the second phase of a government-business partnership to tackle South Africa's electricity, logistics and crime crises. This, following the partial success of the first phase, particularly in the area of electricity loadshedding, which has not been implemented since March 26.
Bird said the NLCC, which was set up in March last year, was hoping to draw lessons from the successes achieved under the National Electricity Crisis Committee, which had been operating for a longer period.
He said that significant progress had already been made in helping Transnet to arrest its decline and in supporting the development of the Freight Logistics Roadmap for a fundamentally restructured logistics sector.
TFR, he said, was showing openness to the support it was receiving from the NLCC and private partners, including by agreeing to the secondment of five B4SA executives into the office of the CEO.
In addition, mutual cooperation agreements concluded to allow business to buy spare parts for the locomotives, under a mechanism where those expenses could be clawed back over time, had also proved successful on the coal line in particular.
Transnet's recovery was insufficient, however, to support the envisaged broader economic upturn, with TFR still not delivering contracted volumes on the coal, iron-ore and general freight corridors.
"But we are still not going to get to the numbers the economy needs through Transnet alone," Bird said, highlighting the urgency of the structural reforms to open the network to third-party operators and private investment.
There was also a need to firm up the frameworks to allow third-party access to the rail network, including through the finalisation of a Network Statement and tariff that was supportive of PSP.
While Bird said the Network Statement, which could be released this month, would not be "perfect" he expressed optimism that it would still have "numbers that I think will make sense to people".

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The Department of Transport (DoT) aims to have the interim National Rail Masterplan (NRMP) ready by February next year, says DoT chief director Jan-David de Villiers.
This will be followed by an eight-month consultation process, with the final NRMP to be delivered by October 2025.
The DoT has contracted SMEC South Africa/Bigen Africa Services JV for the development and maintenance of the NRMP, with the project team consisting of transport planners, economists, civil engineers, project managers, legal specialists and macrologistics strategists, among others.
When the JV's three-year contract comes to an end, the goal is for a dedicated DoT unit to take over the planning and rollout of the masterplan.
The South African National Roads Agency also forms part of the NRMP project management structure, in order for the State-owned road builder to be aware of the commodities being targeted for a return and/or move to rail - and to not accommodate them through additions to the road network, says De Villiers.
He adds that the NRMP will weigh 83 commodities and their origins and destinations to determine if and how they could be moved to rail from road, including grain, chrome, coal and maize.
He says the strategic focus of the NRMP is to start from a zero base to develop a strategic rail network for South Africa.
This should include setting realistic growth rates for all rail traffic categories; for the State to exit rail lines that are not economically or strategically viable; the introduction of competition in the rail market and the attraction of private-sector participation (PSP) and investment in infrastructure, rolling stock and concessioning; as well as the development of a clear path for the long-distance passenger rail service.
Private-sector Participation
De Villiers says there are three timelines for the proposed PSP programme within the rail network.
The first target, set for December, is to conclude a memorandum of agreement with the Development Bank of Southern Africa (DBSA); to finalise the PSP pipeline in terms of the projects that will go into the pipeline; and to capacitate the PSP unit within the DoT.
By December next year, the DoT should have appointed the required specialists to work on bid development, with the bid windows announced in terms of the bids going to the market; and with the requests for proposals (RFPs) already out to market.
"Our main thrust with the RFPs is to reach financial close," says De Villiers.
From 2026 to 2029, the DoT will evaluate the bids, announce the preferred bidders and reach commercial and financial close.
The parameters of the PSP programme is to return the rail network to between 220-million and 250-million tons of goods a year, says De Villiers.
This means PSP projects supporting this goal will be implemented first.
On the passenger rail side, the aim is to reach a ridership number of 600-million to 725-million passengers a year, with the busiest corridors with the most potential to help deliver on this number to be pushed through first.
* De Villiers spoke at a Transport Forum event.

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The Danish and South African governments are partnering on a project to map the wind resources of the coal region of Mpumalanga, where access to the grid for new renewables projects is less constrained and where initiatives are under way to explore alternative livelihoods for workers and communities who could be affected by coal mine and power station closures.
Known as 'Wind Atlas of South Africa Phase 4 (WASA4)', the initiative is being jointly funded by the Danish Energy Agency (DEA) and the Department of Mineral Resources and Energy and is being carried out by researchers from the Danish Technical University, the South African National Energy Development Institute, the Council for Scientific and Industrial Research, the University of Cape Town and the South African Weather Service.
During a visit to South Africa, DEA deputy director-general Stine Leth Rasmussen told Engineering News that state-of-the-art knowledge and tools are being used for the assessment, which will also incorporate recent advances in wind-turbine technology that have improved the generation prospects of regions with lower wind speeds.
She says WASA4 is a continuation of a wind-modelling programme that Denmark has been supporting for more than a decade, and which has resulted in the release of previous WASA editions in 2012, 2014, 2019 and 2021 that are freely available to stakeholders.
WASA modelling has been completed for South Africa as a whole, but validation through measurement stations has hitherto focused primarily on the wind-rich Western, Eastern and Northern Cape provinces.
No such validation has been carried out previously in Mpumalanga, which has since emerged as a priority for South Africa's Just Energy Transition Partnership, which was launched in 2021 with the support of an International Partnership Group (IPG) and which Denmark joined in 2023.
The IPG has pledged $11.7-billion in concessional loans and grant funding to the South African programme, with Denmark having a made a $165-million commitment.
Through WASA4, the wind potential of South Africa's coal heartland will be mapped in detail, alongside similar studies in the North West, Gauteng and Limpopo, with the objective of de-risking wind energy developments in these provinces, but especially in Mpumalanga.
"By increasing the availability of measured data to validate the Mpumalanga wind resources, it is more likely that investors will be encouraged to locate wind projects in these regions," Rasmussen says.
In parallel, the DEA has also worked with the Independent Power Producer Office (IPPO) on a separate study that among other things assesses the potential price differential between wind and solar projects in the grid-ready Mpumalanga province with similar projects in the Northern Cape, where Eskom says the available grid access has been absorbed.
The IPPO will release the results once the study has been finalised, but Rasmussen says the early indications are that Mpumalanga's grid advantages could help offset the regions less potent wind resources and make projects cost competitive.
"A key finding is that while there is an ongoing process to expand the grid to often remote areas with abundant wind and sun, like the Northern Cape, an emphasis should also be put on driving developer interest towards renewable-energy projects in provinces such as Mpumalanga where wind resources are reasonably good and grid capacity is abundant."
Meanwhile, Ambassador Elsebeth Søndergaard Krone reports that Denmark has also worked with South African partners on the development of a digital map of potential sites in Mpumalanga where renewable-energy projects could be developed.
"The map improves the renewable-energy developer's access to crucial information about land use and infrastructure, and also gives an overview of the grid capacity that ...

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Led by solar PV, renewables are poised to transform electricity systems across the globe this decade, with the world on course to add more than 5 500 GW by 2030, the International Energy Agency's (IEA's) 'Renewables 2024' report states.
Such additions would increase global renewable electricity generation to over 17 000 TWh, which is roughly equal to the current combined electricity demand of China, the EU, India and the US.
It will also involve a deployment pace that will be almost three times that witnessed between 2017 and 2023, when some 2 000 GW of capacity was added.
The report forecasts that renewables will be meeting nearly half of global electricity demand by 2030, up from 30% in 2023. In addition, the role of renewables in overall energy consumption, including heating and transportation, is forecast to rise from 13% in 2023 to nearly 20%.
"Renewables are moving faster than national governments can set targets for," IEA executive director Fatih Birol says, noting that nearly 70 countries that collectively account for 80% of global renewable power capacity are poised to reach or surpass their current renewable ambitions for 2030.
"This is mainly driven not just by efforts to lower emissions or boost energy security - it's increasingly because renewables today offer the cheapest option to add new power plants in almost all countries around the world," Birol adds.
In 2023, global renewable capacity additions increased by more than 60% to almost 565 GW and 2024 is expected to be another record year, albeit at a more modest 20% growth rate. Yearly renewable capacity additions are expected to rise from 666 GW in 2024 to almost 935 GW in 2030.
Over the period to 2030, China is set to account for almost 60%, or more than 3 200 GW, of all renewable capacity installed worldwide, making the country home to almost half of the world's total renewable power capacity.
However, India is expected to grow at the fastest rate among major economies.
AFRICA TO ADD 90 GW BY 2030
Although the outlook for sub-Saharan Africa is more subdued, owing to funding and policy uncertainty, the IEA is forecasting that almost 90 GW of new renewable capacity will be added in the region between 2024 to 2030, increasing the region's current installed capacity by over 2.5 times.
"Expansion happens mainly in South Africa, which is responsible for installing nearly 40% of the region's new capacity," the report states.
Solar PV and wind additions make up nearly 80% of new capacity in the region, but outside of South Africa, hydropower makes up the majority of total additions.
Globally, solar PV is forecast to account for a massive 80% of the growth over the period, with the construction of new large solar power plants increasing alongside rooftop solar installations by companies and households.
Global solar manufacturing capacity, which is mostly located in China, is expected to surpass 1 100 GW by the end of 2024, more than double projected demand.
"Given the growing international focus on industrial competitiveness, solar PV manufacturing capacity is forecast to triple in both India and the US by 2030, helping global diversification.
"However, producing solar panels in the US costs three times as much as in China, and in India, it is twice as expensive."
By the end of this decade, the IEA forecasts that the share of wind and solar PV alone in global electricity generation is set to double to 30%, which will require governments to ramp up their efforts to securely integrate these variable renewable sources into power systems.
"Recently, rates of curtailment - where renewable electricity generation isn't put to use - have been increasing substantially, already reaching around 10% in several countries today.
"To address this, countries should focus on measures such as increasing power system flexibilit...

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Zero Carbon Charge (Charge), in partnership with the Automotive Industry Development Centre Eastern Cape (AIDC-EC), and together with the Eastern Cape provincial government, has broken ground on what it describes as an off-grid, ultra-fast, green electric vehicle (EV) charging network.
Once completed, the network in the Eastern Cape should consist of 29 sites, 18 of which will be dedicated to electric passenger and light commercial vehicles (LCVs), while 11 will be off-grid electric truck charging stations.
The charging stations will be located along the N10, N6, R56, N9 and N2.
Charge says both charging networks will operate independently of Eskom's predominantly coal-powered grid, which means they should be green and loadshedding-proof.
It is envisaged that construction of the first charging station at Wagon Wheels Farm Stall on the N6 will start in the first quarter of next year.
Charge believes the demand for this type of charging infrastructure is only set to grow.
Following the latest predictions by motor and energy industries stakeholders, there will be around 120 000 electric vehicles on South Africa's roads by 2027, and 360 000 by 2030.
"We are grateful for the support from the Eastern Cape provincial government in streamlining current application processes, which has allowed us to start breaking ground on the 29 planned charging stations across the province," says Charge chairperson Joubert Roux.
"Transformation to a low-carbon economy is not only about climate change, but also about ensuring the province remains economically competitive, whilst maintaining the principles of Just Transition," adds AIDC-EC CEO Thabo Shenxane.
Charge says landowners hosting the charging stations will earn 5% of the revenue generated by the vehicles making use of these facilities.

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Electricity and Energy Minister Dr Kgosientsho Ramokgopa has expressed confidence that government and the National Transmission Company South Africa (NTCSA) are close to finding the "sweet spot" that will facilitate the integration of private Independent Power Transmission (IPT) projects.
Such projects could help accelerate the expansion of the grid, which has emerged as a bottleneck for new renewables projects in particular, and help unlock 53 GW of mostly renewables generation in the coming ten years. In South Africa, IPT projects are also referred to as Independent Transmission Projects, or ITPs.
Speaking at the formal launch of the NTCSA, which started trading as an independent subsidiary of Eskom Holdings on July 1, Ramokgopa insisted he had no intention of overreaching in his role as shareholder Minister and that the board should determine independently what IPT model would be acceptable to the NTCSA.
However, he highlighted the success of the IPT model internationally in helping to accelerate the development of grid infrastructure, highlighting that in Brazil, Chile, Peru and India, the model had enabled close to 100 000 km of new transmission lines between 1998 and 2015 and had helped mobilise private capital for the grid of more than $24.5-billion.
"We are not guinea pigs," Ramokgopa asserted, adding that South Africa had an opportunity to use its late-mover status to draw on best practices from other countries while localising the IPT model for its own circumstances.
"[But] one thing I have said to Priscillah Mabelane [NTCSA chairperson] is that we will not overreach.
"The board has fiduciary responsibilities and duties to protect the financial interests of NTCSA, while I have a duty to resolve the energy question in the country and ensure that we will achieve conditions of energy sovereignty and energy security.
"And those interests are not misaligned - there is a sweet spot we are seeking for," he said with reference to ongoing deliberations on what model should be adopted.
The Minister also praised the work of the World Bank and its Multilateral Investment Guarantee Agency in seeking to develop a credit guarantee vehicle that could provide guarantees to IPTs without placing further strain on the NTCSA balance sheet, or add to the National Treasury's contingent liabilities.
IPT OPTIONS UNDER CONSIDERATION
In an interview with Engineering News, Mabelane said the NTCSA was open to considering all IPT models, including a 'build, operate and transfer' framework.
"We are not selective subject to the sweet spot on risk sharing, as we do not have a balance sheet to guarantee build, operate and transfer [projects]."
In weighing the options, she indicated that NTCSA was seeking to draw lessons from the independent power producer procurement programme, which had facilitated R282.2-billion in mostly renewables investment since 2011, with the support of State guarantees.
"So if we can address that particular point [the guarantees], we can actually accelerate access to the private sector," Mabelane added.
She said a lot of work had already been done on IPT models and argued that the next key milestone would be the finalisation of regulations in terms of Section 34, which would be required before a procurement determination could be released.
It has been widely reported that the actual procurement was likely to be undertaken by a new office outside of the NTCSA, developed along the lines of the Independent Power Producer Office.
"We believe that the biggest part of it is to make sure that the risk-sharing mechanism is balanced."
In his address, interim NTCSA CEO Segomoco Scheppers reported that the regulations required for ITP procurement would be developed by the first quarter in 2025.
"This will be followed by a Ministerial determination for an ITP pilot," he said.
R11...

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Steel and Engineering Federation of Southern Africa (Seifsa) president Elias Monage has described the establishment of the Government of National Unity (GNU) as an opportunity to revive the metals and engineering sector by fixing the basics and raising infrastructure spend.
In an address reviewing the past year, he said attracting the investment needed for higher levels of growth would require an ongoing stabilisation of electricity supply, alongside efforts to "fix the very basics" in the areas of water, freight logistics, crime, and visa administration.
"These are the elementary elements of a viable economy," Monage said.
Speaking only days after organised business and government launched a second phase of a partnership to address the electricity, logistics and crime crises, and announced a goal to raise growth to 3% by 2025, Monage argued that the country was at a "hugely significant moment".
"After a gruelling election season, the agreement to form a GNU has been hailed as the emergence of a new centre in our heavily polarised political landscape.
"[This] is clearly a hugely significant moment and an opportunity for new beginnings."
He urged business to engage with the GNU in a way that held it to account while building a partnership for mutual growth.
"The secret of change is to focus all our energies not just on fighting the old but on building the new."
He said Seifsa should also use the opportunity to convince the GNU to urgently speed up infrastructure spend to boost demand.
For the metals and engineering sector, where investment had stagnated for years and where employment had slumped, action plans were required to drive demand.
"The Steel Master Plan aims to reverse negative perceptions regarding the steel industry and address constraints to demand by prioritising designation and local procurement, localisation, public and private sector projects, transformation and competitiveness.
"These and other initiatives, as outlined in the plan, will ensure that there is increased output and demand for the metal and engineering sector's intermediate and final products."

Engineering News editor Terence Creamer discusses the partnership previously formed between government and business to tackle loadshedding and other crises; the launch of a second phase of this partnership and the areas of focus; and some of the potential risks to this partnership.

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Electricity and Energy Minister Dr Kgosientsho Ramokgopa is confident that government will be able to positively intervene on Eskom's tariff-hike application for the 2025/26 financial year at the National Energy Regulator of South Africa (Nersa).
If granted as it currently stands, electricity costs for direct Eskom customers would increase by 36.15% on April 1 next year, and by 43.55% at municipal level from July 1.
Speaking at Windaba 2024 in Cape Town on Thursday, Ramokgopa said his department had a number in mind that could prove more palatable, but added that he did not want to disclose this figure as he did not want to compromise the integrity of the Nersa process.
"All I'm saying is that 36% is untenable and 20%-plus is untenable."
Ramokgopa said it was feasible to balance Eskom's financial demands with the needs of business and the general public.
He said the increases proposed by the State-owned power utility would harm South Africa Inc's competitiveness, erode disposable income on all social levels, while it would also place poor households in a position where they would have to choose between having a meal, or power.
It would have "huge, huge implications".
Ramokgopa said it would be possible to lower Eskom's proposed price hikes through policy interventions such as delaying - not scrapping - Eskom's carbon tax compliance, set to kick in in 2026.
"On the bottom line it is like R6-billion - by any measure that is significant."
The rollout of smart meters and prepaid electricity could also significantly bolster Eskom's balance sheet and efficiency, with the utility's municipal debt currently sitting at R82-billion.
While this is happening, it would be possible to partially insulate the poor from electricity price hikes through various interventions.
Ramokgopa said National Treasury had an allocation for the number of poor households to be supported by municipalities with free electricity - ten-million - with the number currently only at two-million, as most municipalities do not have the capacity to determine who qualifies for this support, or the mechanism to deliver the electricity to these households.
Prepaid meters would, however, allow for direct subsidisation of these households, without having to go through the municipality.
It was also on the cards to increase the quantum of free electricity allocated to poor households.
Twenty-one years into the free-electricity programme, 50 kWh per household per month was "surely not enough", noted Ramokgopa.
Increasing this would, however, have a cost implication on the fiscus that would need to be quantified.
"I am confident…that we can provide some degree of relief," said Ramokgopa.
"But we are not going to soil the Nersa process; Nersa is going to run its process."
Ramokgopa said he will make a submission to Nersa in his capacity as the Electricity Minister, while he was also in a position to make public announcements on policy changes that could potentially influence Eskom's application and/or Nersa's decision process.

South Africa has some of the best resources for wind and solar energy in the world. However, the country battles with grid constraints in areas with higher wind speeds, and little renewable-energy deployment in areas with available grid. The Danish-South African energy cooperation addresses these challenges, write Elsebeth Søndergaard Krone, Ambassador of Denmark to South Africa, and Stine Leth Rasmussen, Deputy Director-General of the Danish Energy Agency
With 90 percent of the Danish energy consumption covered by fossil fuels back in the 1970s, the oil crisis inspired us to seek new paths to become energy independent in a sustainable way. Today, more than 60 percent of Denmark's electricity consumption comes from wind and solar energy. Some windy days, we even have 100 percent wind power in our sockets - without compromising our world record security of electricity supply. Thousands of green jobs within consulting, service, maintenance, production and construction now support the whole value chain of renewable energy.
Our green energy transition has not been easy, and through decades, we have learned our hard lessons, for example with regards to tendering renewable energy/offshore wind and integrating large shares of renewable energy into our electricity grid. We are sharing these lessons learnt with South Africa through our strategic energy partnership and with stakeholders in South Africa's energy landscape. In this way, we support the journey away from fossil fuels towards building a new, just and more sustainable energy supply generating new green businesses and jobs.
During a visit from the Danish Energy Agency to South Africa from 7 to 10 October we will, together with our South African partner institutions, discuss some of the results of two projects, which address the opportunities of developing renewable energy in Mpumalanga and other areas with high grid capacity but more moderate wind speeds.
Firstly, we have provided technical inputs to a soon-to-be-launched report by the Independent Power Producer Office (IPPO). The report addresses the impact on power prices related to location of renewable projects in areas with lower wind speeds and fewer solar hours than other areas. Concretely, this report brings forward considerations related to investing in renewables in the provinces of Mpumalanga, which already has an extensive grid, and Northern Cape, that has less grid, but more wind and sun. A key finding is that while the grid is being expanded to often remote areas with abundance of wind and sun, like Northern Cape, an emphasis should also be put on driving developer interest towards renewable energy projects in provinces such as Mpumalanga.
The second project serves the exact purpose of supporting the development of renewable energy in Mpumalanga. Together with our South African partners, we have collected data and visualized this through a digital map, which gives an overview of suitable areas in Mpumalanga to concentrate renewable energy projects. Also with a focus on areas with good possibilities of job creation. Easy access to vital data is key for successful tendering. The map improves the renewable energy developer's access to crucial information about land use, infrastructure etc., and gives an overview of the grid capacity. It will also give the IPPO aspects to consider for regional targeted procurement rounds.
While this may sound like Mpumalanga is a so-so area for renewable energy, this is indeed not the case. South Africa happens to have some of the best resources for wind and solar energy in the world. The Wind Atlas of South Africa, also initiated between Danish and South African partners, has through energy modelling shown that Mpumalanga has wind speeds which are highly suitable for profitable wind power projects. This will provide specific wind data for developers to prioritize these provinces in the coming years' buildout of the renewable energy sector.
Green transition takes time. We are conf...

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Meeting the 193-million-ton rail stretch target set under the newly launched second phase of the partnership between business and government would require a significant amount of work and collaboration, Transnet CEO Michelle Phillips has acknowledged.
Speaking at the Joburg Indaba a day after the target was unveiled as part of a package of targets designed to lift South Africa's growth to 3% in 2025 following more than a decade of sub-1.5% growth, Phillips said Transnet was not yet on track to meet the target.
"As we speak, we are behind, so there's a lot of work to catch up," she said, having announced earlier in the year that Transnet would be seeking to improve on its official 170-million tons target for the 2024/25 financial year.
Meeting even the 170-million tons would represent an improvement on the 152-million tons railed in 2023/24, and be a marked recovery from the volume collapse to149-million-tons in 2022/23.
However, it was still well below the record 226-million tons railed in 2017/18, as well as contracted volumes, particularly with miners. It also fell well short of the 250-milion-ton target set by Transport Minister Barbara Creecy.
Phillips, however, noted that the group had also been well below target at the same time last year, when all indications were that volumes could dip below the 149-million-ton level, and when there was serious congestion across key ports.
"We could have easily been 10-million tons worse off last year, but we ended up with about 3-million tons better," she explained, attributing at least part of the improvement to the collaborative efforts of participants in the National Logistics Crisis Committee.
Phillips also stressed that neither Transnet nor government, its sole shareholder, had the balance sheets to support the investments required to improve and expand the rail and port systems and reported that Transnet had, thus, welcomed the reforms under way to facilitate private-sector participation.
"We've embraced the reforms, and we are working towards those on a daily basis," she said, highlighting the vertical separation of Transnet Freight Rail into a train operations business and an infrastructure manager, alongside the corporatisation of the Transnet National Ports Authority, which would be finalised by April.
Opening the rail network to third-party operators required the finalisation of a Network Statement, including a tariff methodology, that would meet the financial needs of the network owner and private train operators.
While defending the need for cost-reflective tariffs, Phillips said it was up to the Interim Rail Economic Regulator Capacity to determine the methodology and arrive at a balanced tariff outcome.
She also reported that, in light of its financial constraints, the State-owned company was aiming to release a number of transactions into the market, but would do so only once the enabling processes, rules and structure were in place.
These transactions ranged from the disposal of noncore assets and the possible concession of rail and port infrastructure, to opening the rail network to third-party operations, entering into partnerships on the heavy-haul corridors, as well as implementing maintenance joint ventures and management contracts.
"There's a lot of work that's going on. And Transnet, as you've known it, is not going to be the same Transnet in the next few years."
Speaking on the same platform, Kumba Iron Ore CEO Mpumi Zikalala acknowledged the progress being made, but also called for greater implementation urgency.
"We are now in a space where we know the challenges . . . and we've got plans.
"What matters the most now is speed, because what moves the dial is not talk, it's speed . . . [and] ensuring that we drive for progress instead of seeking perfection," Zikalala said.

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If you think you are seeing more Chinese vehicles on the road, you are correct.
Chinese vehicle brands accounted for 9% of all passenger and light commercial vehicles (light vehicles) sold in South Africa this year, until the end of July, up from 2% in 2019, says research group Lightstone Auto.
Sales of non-Chinese-owned brands, but with the vehicles produced in China, have also increased, from 2% in 2019, to 10% in 2024.
Lightstone Auto says five Chinese makes reported sales to naamsa | the Automotive Business Council across the light-vehicle market in 2019.
They made up 12% of the total number of light-vehicle brands and 2% of overall new light-vehicle sales that year.
Stablemates GWM and Haval were responsible for 96% of that number.
Fast-forward to 2024, and nine Chinese light-vehicle makes now report sales to naamsa, making up 21% of the overall count of light-vehicle brands and 9% of all light vehicles sold to end-July this year.
GWM and Haval remain significant players in this space, says Lightstone Auto, but they have now been joined by Chery, and together these three brands have sold 88% of Chinese-branded vehicles in the domestic market this year to end-July.
Chinese brands have also grown their sales in the commercial vehicle market bigger than 3.5 t gross vehicle mass.
In 2019, three brands shared in 7% of overall sales, compared with four makes contributing 21% in 2024.
The number of brands and related sales are not the only area where China has seen growth over the last five years, notes Lightstone Auto.
In 2019, vehicle imports from China accounted for 2% of all light vehicles sold in South Africa, with Volvo - although owned by Geely in China, it is still considered a Swedish brand - being the only non-Chinese make imported from China.
By 2024, this picture has changed, with 12 makes - including Ford, Kia and Peugeot - imported from China, making up 10% of all light-vehicle sales in South Africa.
* Not all Chinese brands report their sales to naamsa.

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A second phase of the partnership launched between government and business to tackle South Africa's electricity, logistics and crime crises has been launched under the Government of National Unity (GNU), with an immediate goal of raising growth to over 3% from 2025.
Speaking at the launch in Johannesburg, President Cyril Ramaphosa described growth as the "glue" that held the GNU parties together, while urging business to work with government to take advantage of the "window of opportunity" opened by the May 29 election results to aim for even higher levels of growth in future.
"If we can achieve more rapid growth, we will create jobs and reduce poverty," he added.
Discovery CEO Adrian Gore, who has been a leading figure in forging the partnership with government in recent years an in galvanising CEOs to pledge their support for collaborative action, expressed confidence that South Africa could break free from its weak growth performance, which has average about 1.2% for more than a decade.
He also outlined the targets that government and business had identified to elevate growth to 3% from next year, including:
Building 4 GW of additional renewable energy in 2025, which would mobilise R23-billion in private investment;
Building 1 000-km of new transmission lines;
Continuing on a trajectory of no loadshedding;
Increasing the volume of goods railed to 193-million tons against a current base of only 170-million tons, including by facilitating R28-billion in private rail investment; and
Removing South Africa from the Financial Action Task Force grey list by the end of 2025.
Describing the actions outlines as "stretch targets", Gore said modelling conducted together with the Bureau for Economic Research indicated that, together with efforts to deliver secure water supply and a rise in national sentiment, the initiatives outlined could increase growth to 3.3% against a baseline for 2025 of closer to 2.2%.
"It's a massive stretch, but then ending loadshedding was a massive stretch target," he added, speaking more than six month since Eskom last implemented rotational power cuts on March 26.
The partnership between business and government would remained confined to the three priority areas of electricity, freight logistics and crime and corruption, but could extend to additional areas, such as water and infrastructure or support for local government, in future.
Ramaphosa said the GNU, which is approaching 100 days since its formation, was fully committed to following through on the reform agenda in the three priority areas, where problems persisted.
"The challenges in our freight logistics system continue to undermine economic growth and hinder our competitiveness.
"The constraints in our transmission network present a risk to much-needed investments in renewable energy.
"The rate of violent crime remains unacceptably high.
"Our unemployment rate is unsustainable," the President said.
He added, however, that the recent progress made in tackling problems such as loadshedding had proved the value of working collaboratively.
"We have built credibility and trust by turning plans into action, and we need to continue to turn those plans into real action.
"And everyone in the government that I lead is now motivated to make sure that the next 100 days, the next 300 days, and the next five years, we can turn the plans that we have into real action."

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The electricity subcommittee of the National Energy Regulator of South Africa (Nersa) has recommended the approval of four more electricity trading licences, dismissing the objections raised by Eskom's distribution division during hearings in July.
The recommendation that GreenCo Power Services, Discovery Green, Green Electron Market and CBI Electric Apollo receive national trading licences will now be taken to the Energy Regulator, Nersa's highest decision-making body, for approval.
Eskom shocked the market on July 18 when it argued that, under the current rules, Nersa was prohibited from allowing two or more licensees to supply the same area.
Eskom also accused the traders of "cherry picking customers" and warned that granting the licences would also compromise the sustainable and orderly development of electricity supply infrastructure.
The objection was lodged despite the fact that Nersa had already issued six trading licences since 2014 to PowerX, EnPower Trading, Neura Trading, Energy Exchange of Southern Africa, Envusa Trading and even to Eskom Holdings' National Transmission Company South Africa.
In recommending that the four new licences be approved, Nersa members argued that the limitation to no more than two licensees related to a distribution licence, which involved the building of physical networks and operations.
There was no such limit on trading licences, where traders relied on those networks and operations to buy and sell electricity and paid to use them.
Traders would be expected to pay the licensed distributor, including Eskom or municipal distributers, to wheel electricity through the networks and there was, thus, no potential for infrastructure conflicts or safety concerns, Nersa concluded.
Regarding cherry picking, Nersa stressed that it could not control which customers and generators traders entered into agreement with, and again underlined that the licensed distributor was entitled to received revenue for the use of its network.
The subcommittee members also noted that Nersa was obliged through both direct legislation and South Africa's competition legislation to ensure non-discriminatory access to distribution grids.
It was also noted that Eskom had been delaying the issuance of grid connection budget quotes to generators that had entered into bilateral contracts with traders that had not yet received a licence.
The development highlighted the need for a national wheeling framework, which Nersa intended to finalise before the end of the year.
GreenCo Power Services' application for an import and export licence was not considered by the subcommittee, however, but a commitment was made to adjudicate the matter in the not-too-distant future.
During the meeting, Eskom's application for a generation operating licence for solar PV projects at the Lethabo power station site, in the Free State, and the Sere wind farm site, in the Northern Cape were also recommended for approval, as was AGV Projects' application to operate battery energy storage systems.
Meanwhile approval was given for the registration of the Lion Thorn distribution facility, in North West province, given that distribution facilities were not covered by the generation licensing exemption of 2023.

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Electricity and Energy Minister Dr Kgosientsho Ramokgopa says that government would like to be "ultra-aggressive" in the roll-out of new renewable energy, which he describes as the "future".
However, key structural constraints, including those relating to grid capacity and regulation, had to be cleared to increase the pace of deployment and to ensure that the credibility of the public procurement process in particular was restored.
Addressing a renewable-energy seminar in Gauteng, the Minister acknowledged that South Africa's public system for procuring renewables capacity from independent power producers (IPPs) - which had been much-lauded when it was initiated in 2011 - was in urgent need of review.
This, owing to recent failures of bid windows to procure new wind capacity in particular, as well as changes in the market that made it possible for private IPP projects of any size to proceed without a licence.
"As part of our quest to ensure that we see the exponential rise of renewables as part of the energy mix, we are going to be a bit more aggressive in onboarding renewables.
"But I think that statement is hollow if we are not able to address … the inherent weaknesses in the system," he said at the gathering, convened to allow practitioners in the renewables sector to outline the hurdles to higher levels of investment and propose possible solutions.
Across the board, South Africa's underinvestment in grid infrastructure, together with a cumbersome grid-allocation system and outdated regulatory processes, were highlighted as key obstacles to higher levels of investment.
IPP Office head Bernard Magoro said the public procurement of renewables IPPs had yielded R272-billion-worth of investment since 2011, while the 6 300-MW fleet of operating wind and solar plants procured since that date were current contributing about 10% of South Africa's electricity.
PROTRACTED PROCESSES
However, the procurement process had become protracted, largely owing to the time it took for bidders to secure grid-connection cost estimate letters (CELs) from Eskom and preferred bidders to gain the grid-connection budget quotes (BQs) needed before construction could begin.
"We need to firm up our allocation rules," Magoro said, describing as a good first step the prevailing Interim Grid Capacity Allocation Rules, which shifted such allocations from the 'first come, first served' model used previously to 'first ready, first served'.
"[But] we need to finalise that process and get rules that make the process much more seamless and faster."
South African Independent Power Producer Association chairperson Brian Day argued that CELs and BQs, which were currently only being issued after IPPs had secured all their other regulatory approvals, should be processed in "parallel rather than in series" so as to derisk the development process and speed up implementation.
In the short-term, however, Day saw curtailment as the key instrument for unlocking much-needed grid capacity, especially in the renewables-rich Northern, Eastern and Western Cape provinces, but noted that the National Energy Regulator of South Africa (Nersa) had still not approve the curtailment framework.
He argued that the delay was symptomatic of larger problems at Nersa, which Day said was struggling to keep pace with the rapid changes under way in the electricity sector and had become a "huge bottleneck".
In the medium-term, the grid constraint could be eased by the National Transmission Company of South Africa's (NTCSA) decision to begin using turnkey contracting to deliver new grid capacity.
Nevertheless, the longer-term solution would probably depend on government developing a model to open up the sector for Independent Power Transmission (IPT) projects, without which it was unlikely that NTCSA alone could deliver the grid infrastruc...

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Volkswagen Group Africa (VWA) says its Kariega assembly plant, in the Eastern Cape, is operating as normal amid possible plant closures and job cuts at its parent company in Germany.
In fact, the local company says it expects record production volumes this year.
The Kariega plant assembles the Polo Vivo for the domestic market and the Polo for the local and export markets. Both are internal combustion engine models.
Volkswagen warned earlier this month that it would weigh closing factories in Germany for the first time in its 87-year history as it faces profitability challenges amid rising pressure from Asian competitors.
"Fewer cars are being sold in Europe and new competitors from Asia are pushing aggressively into the market," Volkswagen CEO Oliver Blume told the Bild am Sonntag newspaper. "The cake has got smaller and we have more guests at the table."
The car maker said in a statement that the measures were meant to bolster the Volkswagen brand in particular.
The New York Times reports that IG Metall, the union that represents German automotive workers, responded by saying that it would resist any job cuts.
It added that Volkswagen managers had told it that a cost-cutting plan announced last year was not working and that additional savings worth billions were needed.
The upheaval at Volkswagen follows an announcement by the EU in June that it would impose additional tariffs of up to 38% on electric vehicles (EVs) imported from China, in what the bloc's leaders said was an effort to protect the region's manufacturers from unfair competition.
The move came a month after President Joe Biden said the US would quadruple US tariffs on Chinese EVs to 100%.
The New York Times notes that the actions by the EU and the US reflect the challenges that traditional automakers in Europe and the US face from up-and-coming Chinese companies, founded with a focus on electric vehicles, with many of them operating at lower cost bases than their rivals in the West.
The challenge, however, is that several EU car makers are deeply entrenched in the Chinese market, with their cars produced in China also subject to the higher tariffs.
The New York Times says these auto manufacturers have criticised the EU's move to increase duties from the current 10%, fearing retaliation from China, as well as an increase in prices across the market and a drop in demand for battery-powered cars.
According to a market investigation by the EU, the Chinese electric car supply chain receives government subsidies that allow manufacturers to reduce their production costs. This gives Chinese producers an unfair edge over their European rivals, according to the European investigation.
Reuters reports that the EU imported around 440 000 EVs from China in the 12 months ending in April.
Definitive EU import duties would only be confirmed towards the end of the year, and typically apply for five years.
Some Chinese companies are expected to increasingly invest in European production, thereby avoiding the additional tariffs.

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Maputo Corridor road concessionaire Trans African Concessions (TRAC) says there are numerous construction and rehabilitation projects underway on the N4 highway between Gauteng and Maputo, with more work to follow in the next three years.
Work on the Bossemanskraal intersection to the Mpumalanga border includes road rehabilitation and a new asphalt overlay, as well as the construction of a new eastbound climbing lane.
The project should be completed in September.
Construction work on a section of road from Wonderfontein to Belfast includes road rehabilitation and a new asphalt overlay, and is expected to wrap up in December.
Work on the section of road from Alkmaar to Hall's Gateway also involves road rehabilitation and a new asphalt overlay, with work wrapping up in January.
Construction work from Mataffin to Crocodile Valley includes road upgrading and rehabilitation, as well as a new asphalt overlay.
Work also includes upgrading the Boschrand Interchange and providing additional passing lanes, and should wrap up in October.
The road from the Kaalrug intersection to the Kruger Park gate is also being upgraded, and includes the widening of the road to two lanes per direction.
Work should finish in October.
From the Tchumene Interchange to Matola Mall the road is being widened to two lanes per direction, with the additional construction of service roads on both sides.
TRAC expects work to conclude in December.
Projects about to start on the N4 include the Schoemanskloof upgrade. This involves the upgrading and rehabilitation of the road, inclusive of a new asphalt overlay.
Work is expected to conclude in October 2027.
The road from Hectorspruit to the Lebombo border post will be rehabilitated and provided with a new asphalt overlay, with work to wrap up in September 2026.
The road from the Ressano Garcia border point to the Moamba Interchange will also be rehabilitated, while also receiving a new asphalt overlay.
The expected completion date is June 2027.

Engineering News editor Terence Creamer discusses power utility Eskom's latest Multiyear Price Determination submission to the National Energy Regulator of South Africa, as well as the next steps.

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Details on the approach South Africa will be taking to piloting Independent Power Transmission (IPT) projects as part of a strategy to accelerate the expansion of its electricity grid will be included in the upcoming Medium-Term Budget Policy Statement (MTBPS), a senior official in the office of Electricity and Energy Minister Dr Kgosientsho Ramokgopa has confirmed.
The MTBPS is scheduled to be released by Finance Minister Enoch Godongwana on October 30.
Speaking during a virtual discussion hosted by RES4Africa, the ministry's head of strategic initiatives and international partnerships, Shaakira Karolia, reported that significant progress had been made to firm up South Africa's approach to private participation in the grid, following Cabinet's approval of a transmission finance pathway in December last year.
Together with the National Treasury and the International Finance Corporation (IFC), the Ministry of Electricity and Energy had narrowed down the IPT procurement options to a build, operate, own and transfer, or BOOT, model, with remuneration based on capacity payments that would be linked to the transmission line's availability.
South Africa, which has been studying IPT models used internationally, is expected to lean heavily on Brazil's approach, which includes a price cap set at the tender stage, and the first IPTs are likely to be implemented on transmission corridors in the Northern and Western Cape.
Bidding is expected to be coordinated outside of the department along the lines of the Independent Power Producer Office, and it has been reported previously that this new office could be housed under the Development Bank of Southern Africa.
Should the competitive auction model be used, bidders would submit a yearly revenue requirement to cover the capital, operational and maintenance expenditure of the IPT, as well as equity returns and debt repayments over the contract period, which is typically between 25 and 35 years in other countries.
The National Treasury is also on record as stating that it is not keen to extend large guarantees to IPT projects and that it is working with the World Bank on the creation of a 'credit guarantee vehicle' that would provide guarantees without reference to government's balance sheet.
Ramokgopa, Karolia said, would soon outline government's approach to IPT's as part of a broader strategy to be pursued with the National Transmission Company South Africa (NTCSA) to deliver on a Transmission Development Plan (TDP) that requires more than 14 000 km of new powerlines by 2033, alongside 170 new transformers and 40 capacitors.
The TDP is expected to involve investments of about R390-billion and government has concluded that IPT should be integrated into the roll-out, owing to the financial and capacity constraints of Eskom Holding's NTCSA.
NOT PRIVATISATION
Karolia stressed that the IPT model endorsed by Cabinet did not amount to the privatisation of the grid, likening the approach to the one adopted by the South African National Roads Agency Limited to expand national roads using tolling.
"We do not see IPTs as privatisation.
"They are really private-sector partnerships to increase infrastructure development in the country - the ownership comes back to the State, and the NTCSA remains responsible for operating the transmission system," she added.
IFC senior operations officer for Africa Tilana de Meillon, who has been working with government on the IPT options, said no whole-of-network concession was envisaged.
Instead the proposal was for the private sector to be allowed to implement new transmission lines based on the needs of the TDP, primarily to spread risks and to mobilise financing.
"The implementation agreement effectively only provides the support from the government to ensure the rights of the IPT to implement, own and opera...

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The Industrial Gas Users Association of Southern Africa (IGUA-SA) has welcomed the attention that South Africa's impending "gas cliff" is finally enjoying from government through Electricity and Energy Minister Dr Kgosientsho Ramokgopa.
The body is cautioning, however, against conflating the recent signing of an agreement between Eskom and Sasol to jointly explore ways to shore-up demand to facilitate the importation of liquefied natural gas (LNG), which Ramokgopa attended, with the "national strategy" or "country plan" required to avert the crisis.
This, because neither entity could adequately represent the industrial-consumption block that would play a central role in meeting the country's LNG demand, nor the coordinated an inclusive LNG solution that reflected the collective interests of all stakeholders.
Eskom and Sasol have indicated that they will be jointly researching possible demand anchors in addition to existing industrial demand in Gauteng and KwaZulu-Natal, including gas-to-power (GtP) projects in close proximity to the existing Rompco pipeline from the Pande and Temane fields, in southern Mozambique, to Secunda, via Maputo.
Executive officer Jaco Human told Engineering News that IGUA-SA's recent interaction with Ramokgopa pointed to the fact that government had fully grasped the urgency of the gas cliff, which had been largely ignored over the past ten years despite ongoing pleas and warnings from industrial consumers.
He said he was also encouraged by the Minister's desire to address the issue as quickly as possible, given that Sasol had now officially extended the gas-supply plateau from its fields in Mozambique by a year to mid-2027.
IGUA-SA was now eagerly awaiting the outcome of efforts by Sasol to extend the plateau further to mid-2028; an extension that Human said was necessary to ensure that there was sufficient time to finalise the contracts and infrastructure developments needed to begin importing LNG through Maputo by late 2027 or early 2028.
He was more cautious, however, in his support for the bilateral memorandum of understanding between Eskom and Sasol, indicating that IGUA-SA would have preferred a multilateral gas-aggregation effort aimed at consolidating the fragmented market to enable secure, long-term gas infrastructure development and supply in order to find a "optimal solution" in the interest of the future users of LNG.
Yearly industrial demand of about 60 PJ was currently the main existing anchor for LNG imports, given that Sasol's own demand would be limited in future to about 30 PJ to produce electricity, owing to the group's assessment that it was not commercially viable to use LNG to manufacture fuels and chemicals in Sasolburg and Secunda.
The other demand "buckets" would arise from government's independent power producer GtP procurement programmes and from Eskom, which had plans to build a 3 GW GtP power station in Richards Bay.
Human did not discount the prospect of Sasol emerging with a value-adding proposition for gas consumers in future.
He argued, however, that such a commercial offering would be distinct from the aggregation that industrial consumers envisaged, which would be developed on a cost-pass-through basis rather than one underpinned by the profit motive.
In the absence of any alternative market offering, IGUA-SA was pressing ahead with the formation of what it had dubbed 'GasCo', an "inclusive platform" in which government, international oil companies, gas suppliers and transporters, financial institutions and Sasol could all participate.
"We look forward to Sasol making its offer to gas consumers," Human said, indicating that no such offer for LNG had been made to date.
He stressed, however, that industry would not be supportive of any future market structure that sought to reinforce the dominance of a single ...

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The National Energy Regulator of South Africa (Nersa) has formally published Eskom's much-anticipated and much-criticised allowable revenue application for the coming three years ahead of what is likely to be a vigorous and potentially hostile public consultation phase.
The documents have been published on the Nersa website following an assessment of its compliance with the methodology and approval to do so during a special Electricity Subcommittee meeting held on September 23.
As has been widely reported, the sixth multiyear price determination (MYPD6) confirms that Eskom has indeed applied for allowable revenue of R446-billion for the 2025/26 financial year.
If granted, this would translate to a tariff increase for direct Eskom customers of 36.15% on April 1 next year, and a 43.55% hike in municipal tariffs from July 1.
The three-year application also includes total revenue requests of R495-billion and R537-billion for the 2026/27 and 2027/28 financial years, with associated hikes of 11.81% and 9.1% for the two outer years should the 36.15% increase have been approved in the first year.
The application includes Regulatory Clearing Account (RCA) determinations to allow Eskom to claw-back revenue foregone in previous tariff periods and court outcomes, including a ruling allowing Eskom to recover residual amounts arising from the illegal removal of R69-billion from its asset base during the MYPD4 horizon.
RINGFENCED SUBMISSIONS
The MYPD6 application is accompanied by separated submission documents showing the specific allowable revenue requests of Eskom Generation, Eskom Distribution and the National Transmission Company of South Africa (NTCSA), which began operating as a wholly-owned Eskom Holdings subsidiary with its own board, on July 1.
Ahead of the submission, NTCSA CEO Segomoco Scheppers stressed the importance of the unit receiving ringfenced revenue that could not be reallocated across other Eskom divisions, as had been the case previously, undermining investment in much-needed grid infrastructure.
The NTCSA has applied for allowable revenue of R101-billion, R115-billion and R155-billion for the three financial years covered by the MYPD6.
Eskom Generation is applying for R292-billion, R324-billion and R322-billion over the horizon, which includes revenue to continue operating and maintaining units at Camden, Hendrina, Grootvlei, Arnot and Kriel that would have had units shutting down during this period, but where permission has been granted to allow for ongoing operations until 2030.
Eskom Distribution, which is expected to begin operating as a separate subsidiary in the coming year, has applied for allowable revenue of R53-billion, R56-billion and R59-billion for the period covered by the MYPD6.
The submission also highlights the ongoing need for tariff restructuring, following Nersa's refusal to approve restructuring requests in 2020 and 2022, but states that restructuring proposals would be made in a separate application to the regulator.
Eskom argues that restructuring is required to align tariff rates with divisional costs, reflect the evolving energy industry, and ensure revenue recovery.
"The current tariff rates no longer accurately reflect the different services provided by Eskom.
"Furthermore, the evolving nature of the energy industry necessitates the modernisation of tariff structures," the submission adds, highlighting the prevalence of customer-owned
generation and the evolving patterns of grid usage.
The revenue build up for 2025/26 outlined in the submission includes: R128-billion for primary energy costs, including R93.6-billion for coal; R93-billion for operating expenses, including R37-billion for employee benefits; R8.9-billion to cover arrear debt; R66.6-billion for purchases from independent power producers; R10-billion for international pu...

The Department of Public Works and Infrastructure (DPWI) has opened applications for several key permanent positions, as part of a move by Minister Dean Macpherson to stabilise the administration and governance of the department.
Over the weekend, key vacancies were advertised, including the head of infrastructure, supply management executive for the Property Management Trading Entity, human resource management chief director and facilities management deputy director.
The department is also seeking a permanent deputy director-general (DG) for the Expanded Public Works Programme, a deputy DG for policy research and regulation and a chief director for accounting and reporting.
In a statement on Monday Macpherson emphasised the importance of filling these positions with skilled professionals, encouraging qualified South Africans to apply before the October 18 deadline.
"The filling of these key positions with permanent appointments is part of the actions we have been taking to bring stability and good governance to the department since my appointment more than two months ago. These positions play a critical role in the department's functioning."
"With the advertising of these positions, we are laying the foundation of a professional public service within the DPWI which has a diversity of skills and expertise to move us forward," Macpherson added.
The recruitment drive comes at a critical time for South Africa, where infrastructure development is seen as a key lever to address the country's economic challenges. Strengthening the DPWI's capacity is expected to enable the department to oversee large-scale public works projects, which are essential for creating jobs, spurring economic growth and improving public services.
President Cyril Ramaphosa underscored the importance of infrastructure investment in South Africa's economic recovery during his July address at the opening of Parliament. He vowed that the Government of National Unity would transform the country into "a construction site".
Macpherson has echoed this vision, committing to ramping up construction projects nationwide and partnering with the private sector to boost infrastructure investment.
"The advertising of these positions forms part of the greater work we are doing to build a strong DPWI to deliver our vision of turning South Africa into a construction site. By working together we can ignite economic growth, create jobs and build a more prosperous South Africa," he asserted.

Engineering News editor Terence Creamer discusses Eskom and Sasol’s collaboration on the potential to introduce liquified natural gas to replace natural gas imports from southern Mozambique, which are currently set to decline sharply from 2027.

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Eskom and Sasol have signed a memorandum of understanding (MoU) to jointly explore the potential to introduce liquified natural gas (LNG) to replace natural gas imports from southern Mozambique, which are currently set to decline sharply from 2027.
The MoU was signed by Eskom CEO Dan Marokane and Sasol CEO Simon Baloyi at a ceremony held at Eskom's Megawatt Park, which was attended by Electricity and Energy Minister Dr Kgosientsho Ramokgopa.
Sasol announced in early September that the gas-supply plateau ahead of a so-called 'gas cliff' had been extended by a year from the initial timeline of mid-2026, and that work was under way to try to extend the plateau to mid-2028.
However, Baloyi stressed that these efforts had simply delayed the inevitable decline in gas imports from the Pande and Temane fields and should be seen as a bridge to the importation of LNG, particularly given that indigenous gas sources were unlikely to materialise in time.
Sasol had also resolved to play a central role in aggregating domestic demand to create the basis for LNG imports, as a way of providing gas users with longer-term certainty of supply, albeit at a far higher price relative to current prices.
"[The extension] has now given us space and scope to be able to bring in LNG . . . and that time must not be wasted," Baloyi said at the signing ceremony.
He also insisted that Sasol's plans could complement the aggregator initiative being pursued by large gas consumers under the banner of the Industrial Gas Users Association of Southern Africa.
Non-Sasol domestic demand of up to 180 PJ/y is currently located mainly in Gauteng and KwaZulu-Natal, which is met through the Rompco pipeline from southern Mozambique to South Africa, as well as a pipeline to KwaZulu-Natal.
Such demand is not substantial enough to secure competitively priced LNG from international sources and, through the MoU, the prospect of "anchoring" that demand with gas-to-power (GtP) generation, including at repurposed coal plants within proximity to the Rompco pipeline, will be explored.
"The context of this MoU is on the back of seeking to exploit opportunities that may arise based on the infrastructure that already exists, namely the Rompco pipeline," Marokane explained.
"It is this pipeline whose capacity will be redundant as indigenous gas from Mozambique declines, [and] the importation of LNG will take advantage of this installed infrastructure to access the markets that are already existing inland," he added. Indicating that the gas would, thus, not be used to supply the open-cycle gas turbines that currently use diesel.
Marokane said the MoU would also provide Eskom with "optionality" to accelerate its GtP strategy. The State-owned company has indicated previously that it has a 20-GW-plus generation project pipeline that includes 4 GW of GtP, including a 3 GW project proposed for Richards Bay.
Eskom was, thus, paying close attention to the updating under way on the Integrated Resource Plan with a view to ensuring that there was scope for it to pursue such projects, with Marokane noting that it was already in the process of procuring solar PV and battery storage capacity at two power station sites, Komati and Lethabo.
Ramokgopa described the MoU as part of the country's emergency response to the impending gas cliff and said that government intended to support the initiative through various government-to-government initiatives, including with Qatar, which had expressed its support for South Africa's LNG ambitions.
In their joint statement, Eskom and Sasol indicated that they would also explore sourcing gas within South Africa, the Southern African Development Community, and other parts of the African continent.
No specific projects or timelines were provided with regards to implementing the MoU, with Marokane saying only th...

Newly appointed Agriculture Minister John Steenhuisen is pushing a renewed focus on structural reforms, biosecurity and improved trade relations with other countries as the Democratic Alliance leader takes charge of the department as part of the Government of National Unity (GNU).
In an exclusive interview with Engineering News & Mining Weekly, Steenhuisen highlights that other prioritised areas are more road-to-rail shifts in agricultural logistics, and the more widespread adoption of technology to reduce crime and increase productivity.
Some agri-economists are optimistic that he will be able to advance the prospects of the industry, a mainstay of growth for the South African economy, having grown by 13.4% and created 21 000 new jobs in the first quarter of this year. Since 2008, its growth rate has averaged 7.5% a year.
Industry bodies, such as the Agricultural Business Chamber of South Africa (Agbiz) and Agri SA, welcomed Steenhuisen's appointment in July and his subsequent maiden Budget vote, which the organisations say is focused on valuable interventions and relentless implementation.
Agri SA said a noteworthy aspect of the budget was the allocation of R1.7-billion to support more than 6 000 small-scale farmers.
The Minister says there is no need to "reinvent the wheel" and will therefore focus on driving the implementation of the Agriculture and Agroprocessing Master Plan (AAMP), which he deems a solid framework on which inclusive growth in the sector can be based.
Steenhuisen emphasises the importance of blended finance to reduce barriers for small-scale farmers, as well as access to markets. There are also "massive" opportunities for small-scale produce to be procured by hospitals, schools and prisons to improve food security in the country.
In the spirit of modernising the sector, he highlights the importance of strong partnerships between sectoral bodies and departments to foster a more efficient and effective regulatory environment.
Some of the legislation governing the agriculture sector dates back to 1947, but "the world has moved on" and Steenhuisen wants to ensure that legislation aligns with newer products and technologies.
The AAMP will be reviewed on a continuous basis to determine which aspects have been working and which ones have not, and where improvement is required, he adds.
The Minister says the plan will evolve over time in a way that ensures the achievement of its objectives, including bigger value chains, more opportunities for small- and large-scale farmers, better biosecurity and expanding export markets.
Steenhuisen cites beef exports to the EU as an example, which he deems "a huge opportunity" for growth and foreign earnings, particularly if South Africa can demand higher prices on the back of high levels of biosecurity.
Other concerns in the agriculture sector involve logistics - "a key problem" - with road transport not only being costly but also resulting in goods being damaged because of potholes, or rural areas not having access to main roads at all, he explains.
Steenhuisen is confident that efforts by the GNU to facilitate more private-sector participation in the rail industry bode well for agriculture and its transport system, with his department ready to collaborate with other government bodies to improve agriculture corridors and ports in the country.
Another crucial area of collaboration will be addressing the high crime rate, which the Minister says disproportionally affects people in rural areas, where most farming activities take place.
Steenhuisen attributes the high crime rate to a lack of effective policing and implementation of a rural safety plan: "Technology [is enabling] farmers to patrol large areas to not only deal with farm attacks but also stock theft. Farmers are implementing sniper cameras . . . to identify number plates and better track down people who have been in and out of certain areas - which can be a deterrent for criminals."
He adds that, with technology "...

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Electricity and Energy Minister Dr Kgosientsho Ramokgopa has labelled a mooted increase in Eskom's electricity tariff of 36% "untenable" and "unaffordable" and has promised to work on an outcome that seeks to strike a "delicate balance" between the needs of consumers and Eskom's financial sustainability.
In his speech during a special Parliamentary debate, the Minister also reaffirmed the need to transition the Eskom tariff toward cost-reflectivity, highlighting the burden on taxpayers should the utility's finances not be stabilised.
This tax burden was also highlighted by the Democratic Alliance's Kevin Mileham, who led the debate for which his party had called.
He noted that Eskom had received about R242-billion over the last ten years, before the recent approval of a R254-billion debt-relief package under which the utility was currently trading.
Mileham also warned, however, that consumers would be left having to choose between electricity and food should Eskom receive the 36% hike for which it was currently applying, given that electricity tariffs had already surged by a nominal 945% over the past 17 years.
The increase would be made even more unaffordable, he added should the National Energy Regulator of South Africa (Nersa) immediately implement an R8-billion claw-back awarded in favour of Eskom in line with a regulatory clearing account application for the 2021/22 financial year.
Should the full amount be implemented on April 1 next year, it would add 4% to the overall tariff increase.
In his response to the debate, Ramokgopa said the issue of Eskom's tariff hike needed to be addressed with urgency and compassion, and expressed optimism that a solution could be found that balanced Eskom's financial sustainability and protected vulnerable communities.
"I'm talking about that delicate balance of ensuring the sustainability of Eskom that is needed for us to allow the economy to grow, [while cushioning] the poor and the middle-income earners in this country, so that we don't erode their disposable income."
While indicating that he would be requesting Nersa to delay and phase-in the R8-billion claw-back, he also announced the following interventions:
A review by the South African National Energy Research Institute of the of the current monthly free basic electricity allowance of 50 kWh for indigent households with the aim of increasing the benefits and ensuring that the benefits reach all ten-million eligible households rather than the current two million;
A repurposing the Integrated National Electrification Programme, which received R5-billion yearly, to increase its penetration through the use of alternative technologies, with a PV-battery-inverter pilot project to be launched before the end of November; and
Continuing to find a solution to the growing problem of Eskom's municipal arrear debt, which stood at close to R80-billion, alongside efforts to improve the capacity of municipalities to bill and collect electricity revenue.
He also underlined the need for Eskom to improve its efficiencies and contain its primary energy costs, but stressed that cost savings alone would not be sufficient to ensure its long-term sustainability.
"Financial sustainability requires improved operating cash flows and a shift towards cost reflective tariffs.
"Without this, Eskom will remain dependent on government support, placing an ongoing burden on taxpayers," he said.
Ramokgopa also stressed that Nersa would ensure full public participation when deliberating on Eskom's revenue application in December, and promised that government would be taking steps in parallel to find solutions to cushion consumers.
"These increases are untenable, are unaffordable, and the country can least afford this situation.
"We will do everything possible to address this. That's the assurance I'm giving t...