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Developing public-private sector relationships is key to future-proofing energy infrastructure, Mining Indaba has heard Addressing grid instability in Africa will require greater public-private partnerships, with one of South Africa’s major banks seeing for the first time an interest in the funding for transmission project development by the private sector. At a panel discussion today (5 February) at Mining Indaba in Cape Town – Mining and grid stability: What is the way forward? – the panellists agreed that governments across the continent need to move with urgency to match the speed at which private capital is moving or willing to fund energy infrastructure projects. Masego Maxwell, a post-graduate student from North-West University, said consistent and clear regulatory frameworks are needed for the private sector to develop renewable energy projects with confidence. “As a continent, we need greater grid stability.” Maxwell said collaboration, de-risking strategies, and developing public-private sector relationships are key components to achieving this. Nivasha Singh, Business Development Manager, Siemens Energy, said current trends in the mining sector encompass decarbonisation and electrification. She said what has to be taken into account is the impact of renewable energy on the “spinning inertia of our grids.” Singh said collaboration with technology providers is key in building out grids today. Evolving the energy and grid landscapes across Africa Mike Teke, Group CEO, Seriti Resources, said that having started out as a coal business, “we are [now] an energy business.” The company recognised the “huge opportunity to transition to green energy.” “We invested in wind energy… and are building 130 wind turbines.” “We are building next to the grid… we have started to build the foundations. The biggest discussion is access. We have had talks with Eskom as grid access is important, but grid expansion is needed in South Africa and across Africa.” Teke said there was an element of reluctance five or six years ago, with the dogma that Eskom is the only entity in South Africa to provide electricity. “That has changed. There are various participants in the green energy space, including Eskom.” Grid expansion plan on the cards for South Africa Teke said his advice to investors is to move swiftly in the energy space as “government is listening. “I’m seeing a swiftness… government is looking to expand the grid…” He said South Africa’s energy mix will include coal, which “will still be there for a long time,” with more wind, solar and nuclear going to come in. “Investors should get into South Africa and Africa now.” Teke said that South Africa is making up for lost time. This is evidenced by a political leadership opening up the grid. Interest in transmission projects in Africa Vincenzia Leitich, Executive, Client Coverage Energy & Infrastructure at Standard Bank South Africa, said their involvement with providing funding for renewable energy projects has shown “quite a few of the government IPP programmes have been unsuccessful on the wind side due to a lack of grid access.” She highlighted that the focus on funding has switched to transmission, which has seen a “lack of investment to date.” She highlighted the Government of South Africa launching in December 2024 the Independent Transmission Projects (ITP) market-sounding exercise or request for information (RFI) as a key initiative to transform the country’s energy and infrastructure sectors. This is the first step towards the launch of the ITP pilot tender planned for 2025. The RFI exercise seeks to gather insights on the market’s interest, capabilities, and potential solutions for accelerating transmission infrastructure development. “The RFI will assist in the design of an effective procurement framework, inform the development of regulatory instruments, and guide the preparation of the tender documents. The RFI exercise is open to all interested parties, including private developers, financiers, DFIs and other interested stakeholders. Responses to the RFI will play a critical role in shaping the final structure of the tender and the successful implementation of the ITP programme,” said the Government. This process is being led by the Independent Power Producers Office (IPPO) on behalf of the Ministry of Electricity and Energy and the National Treasury. “What we are seeing now is governments who have not wanted private sector involvement in transmission… legislation is changing to allow for private sector investment in transmission,” said Leitich. She said that transmission infrastructure funding was “not on our radar.” “It’s become imperative that we look at it… there are various finance models… from the US… to Vietnam – where it has successfully been implemented.” She cautioned that the revenue model for potential transmission projects has to be sustainable. Power pools an important construct in energy infrastructure development Leitich said with the power pools across Africa looking to increase cross-border transmission projects, the next wave of funding will be allocated to build out the infrastructure. “Revenue streams are key… there is a need to have capacity payments that make sense. It will also need a cost of supply that is standardised.” Private sector mines in the DRC and Zambia have shown an interest in investing in transmission infrastructure, she said. Africa on the verge of an energy breakthrough, but… Johan Helberg, Head of Sales: Africa for Aggreko, said Africa is on the cusp of a breakthrough in the energy sector, much like the telecommunication industry’s transformation in the early 2000s with cellphone technology replacing fixed telephone lines. But while the political will may be there, “infrastructure is a challenge.” Helberg said baseload continues to be a real concern. He said while developed countries have the “financial muscle,” the challenge in Africa and other developing regions is how to enable “business through the right models.” “It has to make business sense ultimately.” ESI |
