Economy Energy Finance Legislation South Africa

South Africa needs to open up field for independent power producers – Financier

A call for South Africa to open up the playing field to independent power producers (IPPs) for wider access to electricity was made on Wednesday at the Africa Energy Indaba.

The future of Africa’s energy agenda was discussed there with delegates calling for more IPPs across the continent.

The Executive Manager of Productivity SA, Sello Mossai, says the inclusion of more IPPs in the production of South African electricity will benefit the manufacturing sector immensely.

“Energy drives manufacturing, particularly in the economy, and for our economy to grow, like all other economies, it needs focusing on the manufacturing sector. So the participation of IPPs in the supply and production can only go well for the economy,” says Mossai.

Mosai says that the IPPs should be assisted with funding by government but, ultimately, they should sustain themselves like any profitable business.

The CEO of Garuda Finance, Rajen Pillay, shared Mossai’s views using South Africa’s telecommunication industry as an example.

“Remember we had one utility, that being Telkom. What the government correctly did was to open up that space and now you have Vodacom, Cell C and all those guys. This has improved access of the population to those things, which has lowered costs,” says Pillay.

Pillay says the same thing needs to happen in electricity. He says South Africa needs to open up the playing field for IPPs instead of having one regulator.

“Had those steps been taken ten years ago like when the Telkom industry was being deregulated and opened up, these power situations which we have in South Africa now, wouldn’t be so magnified,” says Pillay.

Source: CNBC Africa

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