By Phenyo Selinda
Cape Town – Deputy President Paul Mashatile has acknowledged and expressed deep gratitude to the BRICS New Development Bank (NDB) for its unwavering support towards South African infrastructure projects. Speaking at the Energy Seminar organized by the NDB at the Cape Town International Convention Centre, Mashatile highlighted the significant impact of the bank’s financial commitments to the country’s development goals.
“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 US$5.6 billion in loans extended to our country over the last eight years,” the Deputy President stated.
NDB’s Strategic Role in South Africa’s Development
Over the past eight years, the NDB has played a pivotal role in supporting South Africa’s infrastructure growth through substantial financial backing. The $5.6 billion in loans provided by the bank has facilitated numerous projects, particularly in the energy sector. During his address, Mashatile underscored the importance of these investments, particularly in enhancing South Africa’s capacity to meet its growing energy demands.
One of the key highlights of the seminar was the NDB’s approval of $2.3 billion for ten renewable energy projects across South Africa. These projects, which include solar PV, wind, hydropower, biomass, and hybrid systems with storage, are expected to add a generation capacity of 2.8GW. This will not only bolster South Africa’s energy security but also significantly reduce carbon emissions by over 4 million tonnes 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,” Mashatile emphasized.
Addressing Challenges and Enhancing Cooperation
Despite the significant strides made with the support of the NDB, Mashatile pointed out some challenges that need to be addressed to maximize the benefits of these investments. One such challenge is the sluggish payment of authorised projects in South Africa. The Deputy President shared that this issue was a topic of discussion with Minister of Finance Enoch Godongwana and his team at National Treasury, who have committed to resolving it.
The appointment of Mr. Monale Ratsoma, a former National Treasury official, as the Chief Financial Officer and Vice-President of the NDB was also warmly welcomed by Mashatile. He expressed confidence in Ratsoma’s ability to steer the financial strategies of the bank in a manner that aligns with South Africa’s developmental objectives.
“We will work with you to ensure that the pledge that the bank made of US$3 billion at the BRICS Summit comes to reality because it is focused on supporting our energy strategy,” Mashatile assured.
Learning from BRICS Member Nations
Deputy President Mashatile highlighted the importance of learning from the experiences of other BRICS member nations in addressing South Africa’s developmental challenges. He expressed a keen interest in understanding how these nations have successfully scaled up their renewable energy capacity, modernized their grid infrastructure, and promoted rural electrification.
“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 and best practices in managing the socio-economic aspects of energy transitions,” Mashatile noted.
The Deputy President also pointed out the lesson learned from BRICS members in the creation of new cities as a method to eradicate poverty. He emphasized the need for South Africa to invest in the construction of new cities to alter the spatial perspective of its urban areas.
The Future of South Africa’s Cities
As South Africa faces challenges such as growing urbanization, migration, climate change, poverty, and unemployment, the construction of new cities has become a critical component of the country’s developmental strategy. Mashatile stressed the need for these cities to be sustainable, with a strong reliance on renewable energy sources to ensure they are resilient and capable of supporting the country’s economic growth.
“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,” he asserted.
Mashatile highlighted the strain that the influx of people from rural areas to urban centers has placed on existing cities, including traffic congestion, housing infrastructure backlogs, and an increase in crime rates. He argued that developing new cities would help alleviate these pressures while providing modern, sustainable living environments for South Africa’s growing population.
Energy Reforms and Initiatives
In his address, Deputy President Mashatile also detailed some of the key energy reforms and initiatives that the South African government has undertaken to enhance the country’s energy security. He spoke about the ongoing process of unbundling Eskom into three separate entities—generation, transmission, and distribution. This move, he said, would enhance efficiency, improve accountability, and open up the energy 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,” Mashatile explained.
The Deputy President also touched on the ambitious transmission expansion plan currently being implemented, which includes 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 by connecting 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,” Mashatile stated, reiterating South Africa’s position on balancing its coal resources with the need for a sustainable energy future.
Collaboration and the Path Forward
In closing, Mashatile emphasized that the reforms and initiatives presented were just the beginning. He reaffirmed South Africa’s openness to learning, adapting, and collaborating with international partners, particularly the BRICS nations, to achieve its developmental goals.
“We remain open to learning from our partners, adapting their successes to our context, and collaborating on projects that will drive South Africa’s growth and development,” he said.
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