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AfrElec POLICY AfrElec

South Africa to merge state energy firms

SOUTH AFRICA SOUTH Africa’s Cabinet approved a plan on The government will appoint consultants to
June 11 to merge three state-owned oil and gas handle the restructuring process. The new entity
firms to form a single national oil company will be known as National Petroleum Co.
(NOC), in an effort to curb losses. The Mossel Bay GTL plant is already operat-
PetroSA, which operates the Mossel Bay gas- ing well below its nameplate capacity of 36,000
to-liquids (GTL) plant and is involved in explo- barrels per day (bpd). In its September pres-
ration and production, will be merged with gas entation to Parliament, CEF warned that Pet-
infrastructure developer iGas and the Strategic roSA was close to negative cashflow as a result of
Fuel Fund (SFF), which manages South Africa’s declining throughput.
fuel reserves. All three are subsidiaries of the “Reserves are close to depletion and are
state-owned Central Energy Fund. expected to run out by December 2020 and there
Many of South Africa’s state-owned enter- is still no sustainable techno-economic long-
prises (SOEs) are lost-making, and in some cases term solution for the gas-to-liquid refinery,” the
saddled with heavy debt. PetroSA had once been fund said.
a profitable enterprise, but has struggled with There are hopes that gas could be supplied to
dwindling supplies of domestic gas feedstock for the plant from a major offshore discovery made
its Mossel Bay plant. by Total in February last year. But the French
CEF warned in September last year that the major is still appraising the find, and is yet to
GTL refinery would run out of domestic supplies approve its development.
by the end of 2020. PetroSA reported a net loss of Ramaphosa has also called for changes at
ZAR2.08bn ($124mn) in the financial year end- power utility Eskom and South African Air-
ing in 2019, while its debt rose to ZAR1.917bn. ways, blaming years of corruption and misman-
South African President Cyril Ramaphosa set agement for their difficulties. Rather than being
out his plans for consolidation of the country’s merged, Eskom is due to be unbundled into three
state sector in an address in February. The aim is separate divisions. Its transmission activities are
to “repurpose and rationalise a number of state- expected to be spun off by the end of 2021, and
owned enterprises to support growth and devel- its generation and distribution operations the
opment,” the Cabinet said last week. following year.™

AfDB lends $253mn to Egypt to boost power

EGYPT THE African Development Bank (AfDB) has Egyptian Minister of International Co-operation
approved a €225mn ($253mn) loan to support Rania Al Mashat.
the resilience and sustainability of Egypt’s elec- “The EGGSP aims to improve the security of
tricity sector during the coronavirus (COVID- energy supply by increasing the share of renew-
19) crisis. able energy and improving the financial sus-
The loans will help to finance Egypt’s Elec- tainability of the electricity sector with a view to
tricity and Green Growth Support Programme ensuring greater participation of the private sec-
(EGGSP), which aims to attract more private tor in injecting more investments in renewable
investment into the power sector, particularly in energy,” said Egyptian Minister of Electricity and
renewables. Renewable Energy Mohamed Shaker.
The funding is intended to help meet the Over the last few years, Egypt has imple-
Egyptian government’s financing requirements mented reforms to improve the business envi-
in the light of the COVID-19 pandemic, and ronment and foster inclusive growth.
support a sound electricity infrastructure base, This progress, however, is threatened by the
a key enabler for the private sector and for the impact of COVID-19 on the different economic
country’s competitiveness, the bank said in a sectors, including the power sector, and on the
statement. vulnerable.
The EGGSP reform programme seeks to pro- The financing provided under the EGGSP
mote a sustainable, competitive and diversified support will buttress measures being taken by
electricity sector that ensures secure supply and the government of Egypt to combat the pan-
supports climate change mitigation and green demic and to protect the most vulnerable during
growth. these difficult times.
“Accelerated deployment of the EGGSP It will also help stimulate new private invest-
reform programme is instrumental to meet ments in the electricity sector and increase the
energy needs, combat climate change and pro- deployment of clean energy in line with Egypt’s
mote sustainable development in Egypt,” said targets for green growth.™

Week 24 18•June•2020 www. NEWSBASE .com P7