Further South African electricity initiatives must follow Mozambique deal

Johannesburg-based Jurg van Dyk of Pinsent Masons was commenting after Kgosientsho Ramokgopa, South Africa’s minister of electricity, signed a deal on Monday to secure supply of electricity from Mozambique, with Mozambican minister of energy and mineral resources, Carlos Zacarias.

Under the deal, as reported in local media, between 80MW and 100MW of power from Mozambique is expected to be available to be supplied to South Africa’s electricity grid from as early as next week, rising to up to 600MW within six months. In the longer term, the arrangement could involve the procurement of 1,000MW of power by South Africa from Mozambique.

Business Live reported that an unnamed mining company is behind the deal, acting as a private off-taker in the arrangements. It further reported that the initial 80 to 100MW to be supplied will be gas-powered. Mozambique has invited South Africa to participate in hydroelectric power and other gas-powered electricity generation projects in Mozambique, according to the Independent Online.

News of the deal agreed comes amidst continuing power cuts of several hours per day in South Africa.

Pinsent Masons’ Van Dyk, whose team has been advising on energy generation projects based on various technologies, said: “This is a positive indication that the newly appointed minister of electricity is taking steps to address the country’s electricity shortfall. We are hopeful that more initiatives will follow to address the current electricity crisis.”

“The additional procurement of electricity from Mozambique, together with the active private off-take market, will likely have a positive long-term impact on the availability of electricity for South Africans. It is extremely important that more similar measures be put into place, as soon as possible, in order to off-set the planned decommissioning of some of Eskom’s aging coal-fired power stations. An important initiative in this regard is the Department of Mineral Resources and Energy’s energy storage independent power production procurement programme. Bid submissions are due by 5 July 2023,” he said.