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Gigaba gets to grips with nukes programme

Publish date: 18 April 2017
Issue Number: 503
Diary: Legalbrief Environmental
Category: Energy

While government continues to deny that it has signed a nuclear deal, it has moved to firm up the proposed nuclear build programme, writes Legalbrief. Finance Minister Malusi Gigaba announced last week that he has called a meeting with Eskom and the Energy and Public Enterprises departments to discuss the state’s nuclear build programme. According to a report in The Citizen, Gigaba revealed this following a meeting with asset managers, bondholders as well as investors ahead of a crucial International Monetary Fund meeting taking place in the US this week. The newly appointed Finance Minister used the meeting with investors to assure them that National Treasury was still on track and that there was no cause ‘for alarm’. Gigaba, responding to questions from reporters, said he will meet with the Minister of Energy as well as the Minister of Public Enterprises to discuss the controversial programme and map a way forward. Gigaba explained that the decision to call the meeting was his and that he was aware that Treasury, together with the Energy Department, had conducted extensive work on ‘the feasibility of the project’, the report states. It says Eskom is yet to brief Gigaba on its nuclear plans. It was earlier reported that the nuclear build programme was expected to kick-off in June once Eskom issued a formal request for proposals from companies to bid for the estimated R1trn contract.

Full report in The Citizen

Eskom reiterated last week that no deal had yet been signed. According to a report on the SA News site, in the wake of media reports alleging that a nuclear deal has been signed, Eskom repeated the remarks made by National Treasury that no deal has been signed. ‘Eskom expects to issue a full Request for Proposal (RFP) to the open market once the Request for Information (RFI) has been assessed and the relevant approvals have been obtained,’ Eskom chief nuclear officer Dave Nicholls is quoted in the report as saying. Nicholls said the power utility has not received any formal proposals from potential suppliers and has not signed any power plant procurement agreements. ‘Eskom has not undertaken any prequalification assessment to date related to the potential respondents to a potential RFP,’ he said. The Department of Energy has said that the funding model for SA’s nuclear build programme will be determined by the response received from bidders. SA plans to introduce 9 600 megawatts of nuclear energy to the grid in the next decade.

Full report on the SA News site

Focusing on renewable energy now: Government has missed the deadline set by previous Energy Minister Tina Joemat-Pettersson for the financial closure of outstanding Power Purchase Agreements (PPAs) with renewable energy producers. According to a Cape Times report, the SA Renewable Energy Council (Sarec) said last week, when invited to attend the signing of contracts at the Independent Power Producers (IPP) office, new Energy Minister Mmamoloko Kubayi’s office asked that the signing be delayed. Kubayi apparently first wanted to meet Public Enterprises Minister Lynne Brown before setting a new deadline. The delay is despite President Jacob Zuma confirming during his State of the Nation Address that Eskom would sign PPAs. EFF spokesperson Mbuyiseni Ndlozi said there was a link between the axing of now former Finance Minister Pravin Gordhan and Joemat-Pettersson. He said there was no truth in the Energy Department’s excuse for the delay. ‘This has nothing to do with any other administrative technicality,’ Ndlozi said. DA energy spokesperson Gordon Mackay said Zuma removed Joemat-Pettersson because she was ‘dragging her feet’ in forging ahead with the nuclear plan, according to the report. It notes Mackay added that Eskom would drag out the signing of the PPAs, as the contribution of the IPPs would add excess energy to the grid, and therefore eliminate the need to go ahead with the nuclear plan. The party would write to Kubayi to urgently set a new deadline for the signing of the PPA. ‘We believe the delay is a further blow to investor confidence the country can ill-afford in light of the Cabinet reshuffle and sovereign downgrades,’ he said.

Full Cape Times report (subscription needed)