Deputy President Paul Mashatile: New Development Bank High-Level Energy Seminar

Programme Director;
BRICS New Development Bank President, Her Excellency Madam Dilma Rousseff and the NDB Vice Presidents;
Acting Director General of the New Development Bank, Mr Thabo Rakoloti and Senior Officials of the Bank;
Minister of Finance Enoch Godongwana;
Acting Minister of Electricity and Energy of the Republic of South Africa, Hon Patricia de Lille;
Heads of Government Institutions;
Esteemed Colleagues from our BRICS partner nations;
Senior Government Officials of the Republic of South Africa;
Distinguished Guests;
Ladies and Gentlemen;
Good morning.

It is my honour to address you today at this crucial energy seminar organised by the BRICS New Development Bank. I extend my heartfelt gratitude to our hosts and to all of you who have gathered here to share experiences and insights on energy reform, particularly in grid transmission.

Madam President, I had the honour of meeting with you and the New Development Bank leadership in Shanghai, China, in October last year. I want to express my gratitude once again for the bank's pledge, and specifically for the promises made regarding the bank's assistance for South African infrastructure investment. In this regard, we take note of the USD 5.6 billion in loans extended to our country over the last eight years.

It is commendable that NDB has approved $2.3 billion for 10 renewable energy projects, including solar PV, wind, hydropower, biomass, and hybrid systems with storage. These projects aim to install a 2.8GW generation capacity, reducing over 4 million tonnes of CO2 emissions annually.

We also appreciate the bank's plans to assist Transnet in resolving the deficiencies in freight rail infrastructure. The Transnet project in particular is of utmost importance in guaranteeing a goods system that is internationally competitive, allowing for the continuous expansion and diversification of the country's economy.

During our discussion, we agreed that the difficulty is the sluggish payment of authorised projects in South Africa. I discussed the matter with the Minister of Finance, Mr Enoch Godongwane, and his team at National Treasury, who promised to attend to it.

We are also impressed that the bank has appointed former National Treasury official Mr Monale Ratsoma as its Chief Financial Officer and Vice-President. We will work with you to ensure that the pledge that the bank made of USD 3 billion at the BRICS Summit comes to reality because it is focused on supporting our energy strategy.

Madame President, we are especially eager to learn from:

• China's experience in rapidly scaling up renewable energy capacity and modernising its grid infrastructure.
• India's successes in promoting rural electrification and integrating large-scale renewable energy projects.
• Brazil's expertise in hydroelectric power and bioenergy.
• Russia's strategies for managing a vast transmission network and its progress in nuclear energy.

We hope to gain insights into:

• Effective models for private sector participation in transmission infrastructure development.
• Strategies for balancing grid stability with the integration of variable renewable energy sources.
• Innovative financing mechanisms for large-scale energy projects.
• Best practices in managing the socio-economic aspects of energy transitions.

Specifically, one of the lessons we are learning from one of the BRICS Member Nations is that they have invested in the creation of new cities as a method to eradicate poverty. We are of the same opinion that it is imperative to allocate resources towards the construction of new cities in Africa in order to alter the spatial perspective of our cities.

In a comparable vein, Dr. Tshilidzi Ratshitanga suggests that, "The future entails massive urbanisation, industrialisation, and economic transformation anchored on the creation of hundreds of new megacity regions across South Africa and Africa, which will reverse the ubiquitous distortions of apartheid and colonial spatial legacies".

Over the years, we have learned that China has built new economic nodes using a polycentric policy approach. The three facets of the polycentric city are competitiveness, cohesion, and sustainability.

As a result, a polycentric city is considered a solution to urbanisation difficulties such as inefficient transportation networks and a shortage of cheap housing, among others.

This is because polycentric societies provide equitably distributed employment and facilities. It is about size because it is in response to the rise of megacities. This is because cities have evolved into economic engines.

As we collaborate with the NDB, we will invest in new cities in response to today's realities, which are growing urbanisation, migration, climate change, poverty, unemployment, and pandemic management.

The future is in the cities!

Distinguished Delegates

If we accelerate the construction of these cities, we will address the large influx of people from rural areas moving to urban areas, which has put tremendous strain on cities throughout South Africa, causing traffic congestion, housing infrastructure backlogs, and, to some extent, an increase in crime rates.

However, as we develop these cities, we must remember that sustainable cities require dependable, inexpensive, and renewable energy to operate.

High-energy consumption patterns, rising energy costs, and environmental deterioration caused by the use of fossil fuels render cities vulnerable and inefficient.

Distinguished Guests,

I would like to present some of the key initiatives and reforms we have undertaken.

First, Eskom Revitalisation: we are in the process of unbundling Eskom into three separate entities: generation, transmission, and distribution. This separation will enhance efficiency, improve accountability, and open up the sector to much-needed competition and investment.

We have also implemented a debt relief programme for Eskom, allocating R254 billion over the next three years. This financial support is crucial for Eskom's operational stability and will enable the utility to invest in critical maintenance and upgrades of existing infrastructure.

Second, Expanding Generation Capacity: we have taken several steps to increase our generation capacity.

• This includes removing the licensing requirement for private power generation projects, paving the way for businesses and communities to generate their own electricity.
• Through our Renewable Energy Independent Power Producer Procurement Programme (REIPP PP), we continue to bring significant renewable energy capacity online. The latest bid windows have been designed to expedite the deployment of new generation capacity.
• We are also exploring the potential of natural gas as a transition fuel, recognising its role in providing flexible, dispatchable power to complement our growing renewable energy fleet.

Third, Transmission Infrastructure Development:

To this end, we are implementing an ambitious transmission expansion plan, including piloting Independent Power Transmission (IPT) projects and streamlining regulations to accelerate the development of transmission infrastructure.

This initiative aims to unlock renewable energy potential in the Northern, Eastern, and Western Cape provinces. The aim is to connect new generation capacity to the grid.

As we pursue these reforms, we remain steadfast in our commitment to a just energy transition. We have, however, decided not to transition into the dark. We are a coal-endowed country.

Our Just Energy Transition Partnership (JETP) with international partners is a cornerstone of this approach. We believe that such partnerships will support our transition to a low-carbon economy while ensuring that we address the socio-economic challenges.

We are developing comprehensive plans for the economic diversification of coal-dependent regions, skills development programmes for workers in the fossil fuel industry, and initiatives to promote local manufacturing in the renewable energy sector.

We are also looking beyond our borders, strengthening our participation in the Southern African Power Pool through Regional Integration. This regional approach improves our energy security by sharing resources and creating opportunities for cross-border power trading.

These initiatives represent a fundamental reimagining of our energy industrial complex. We are moving from a centralised, coal-dominated system to a more diverse, flexible, and sustainable energy landscape. This transition is not without its challenges, but we are committed to seeing it through.

As we implement these reforms, we are keenly aware of the experiences and insights our BRICS partners can offer. Each of our nations has faced unique energy challenges and has developed innovative solutions. It is in this spirit of mutual learning and cooperation that we approach this seminar.

In conclusion, South Africa is committed to building a resilient, sustainable, and inclusive energy sector. The path ahead is challenging, but we are confident that with determination, innovation, and cooperation, we will achieve our goals.

The reforms and initiatives I have outlined today are just the beginning. We are open to learning, adapting, and collaborating as we forge ahead.

It is clear that the energy future of South Africa will require a mix of strategies that incorporate renewable energy, energy efficiency, and sustainable development practices to ensure a brighter and more sustainable future for generations to come.

As we engage in the discussions over the coming days, let us remember that our shared goal is not just about keeping the lights on. It is about powering our economies, creating opportunities for our people, and safeguarding our planet for future generations.

I look forward to the fruitful exchanges that will emerge from this seminar. Together, we can build a brighter, more sustainable energy future for our nations and for the world.

I thank you.

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