Minister Lynne Brown, Power-Gen & DistribuTech Africa Conference 18 July 2017, Sandton Convention Centre
Ladies and gentlemen
I am very grateful for the opportunity to interact with the African power sector on International Mandela Day.
In South Africa, we are in the throes of an important societal discussion about Mr Mandela’s legacy with regard to economic transformation.
Twenty-three years after apartheid, our country continues to suffer the effects of gross inequality, chronic poverty and rampant unemployment.
My own view is that Mr Mandela and his generation of leaders laid a table with enough seats for all to be able to eat.
The nature of the political settlement they brokered was redistributive, but not retributive. It sought to encourage those with resources to follow their leaders’ example of sharing.
Instead, those with capital took advantage of Mr Mandela’s largesse to accumulate more wealth for themselves.
And, despite the contribution of the Civil Service towards the creation of a non-racial middle class, and the emergence of the phenomenon of the so-called BEElionaire, Affirmative Action and BEE policies have to a large extent failed to narrow the gap between rich and poor.
That’s why, although we may not all agree on the specific means and precise terminology, there is broad societal agreement with the ANC’s identification of the need to accelerate transformation
to take the National Democratic Revolution that Mr Mandela once led to a more logical and just conclusion. To a South Africa that truly belongs to all its people.
I believe that is what Mr Mandela still craves as he regards us from his vantage point in heaven.
Not only for South Africa, but for much of a Mother Continent that continues its post- colonial struggles for dignity and equilibrium.
Ladies and gentlemen
I’m sure you’ve all seen those night-time satellite photographs that show the strength of the lighting on the various continents.
Europe and North America are lit up like Christmas trees even Asia and South America leave us in the shade.
A few hundred years ago, colonialists described Africa as the Dark Continent, and pretty much succeeded in ensuring it remained that way.
Networking and information-sharing exercises such as this conference present rare opportunities for the cream of the continents thought leaders to plot a collective trajectory to a lighter future.
A future in which we have overcome Africa’s infrastructure deficit
When we talk to each other we lay the foundations to start leaning towards an inclusive continental electricity sector skewed, first and foremost, towards the development of better lives for the poor and the marginalised.
New technologies to produce cleaner power are being commercialised on a daily basis. These technologies, to reduce carbon emissions or eliminate carbon altogether, should collectively be regarded as a critical space to further our developmental objectives.
By localising manufacture we create new jobs, develop new skills � and positively impact on local and regional economies. (I will return to the subject of renewables in a minute or two.)
In the meantime, let’s agree that when our grandchildren look at night-time satellite photographs they should see an Africa that has truly emerged from darkness An electrified and industrialised Africa, with the infrastructure and skills both to produce the goods and get them to market
That’s the goal that brings us together today.
Our continent is richly blessed with natural resources, including people among the most innovative and resilient in the world
sufficient resources to enable Africa to develop its own electricity sector more than sufficient to support its developmental objectives
But there’s a paradox: The continent, collectively, lacks the cashflow to invest in itself.
And, a second paradox: South Africa has infrastructure that is the envy of most of the continent, but an economy in recession. To the north of us, the economies of countries with relatively little infrastructure have been showing better growth.
How can we help each other to close these gaps?
As South Africa’s Minister of Public Enterprises, I am the shareholder’s representative (representing government, representing the people) with oversight responsibilities over six state-owned companies, including Eskom.
Eskom is one of the biggest companies in South Africa. It directly employs more than 40 000 people. And, keeping its fleet of power stations in daily supplies, including coal supplies, generates hundreds of thousands more jobs.
Eskom’s day jobs, so to speak, are therefore to generate power and jobs.
But it also has a bigger role: To use its muscle to develop infrastructure to enable industrial growth � now, and for the future.
In the context of sluggish economic growth since the beginning of the global recession 10 years ago, Eskom’s continued delivery of its infrastructure programme has been of massive importance to the country.
There were time and cost over-runs (and Eskom’s governance is another matter to which I will return), but Ingula Power Station was commissioned last year, while work is progressing ahead of revised schedule at Medupi and Kusile power stations.
As we continue to strive for self-sustainability on the continent, we must use the opportunity to diversify our roles.
Eskom must be more than an electricity trader on the continent. It must also be a partner in skills development, and a hub of continental knowledge.
Ladies and gentlemen
Electricity is the cornerstone of any economy; without it, there can be no industry, little development, and only stunted growth.
The United Nations sets Sustainable Development Goals, kind of the minimum standards for building better tomorrows.
But real development and growth require us to deliver more than the minimum standard. Indeed, the future security of our continent depends on the action we take now to develop reliable and affordable electricity for Africa, supported by solid and adaptive infrastructure.
To achieve these objectives, the design of our electricity systems and markets needs to be changed to eliminate failures and embrace new technologies. Load shedding and network failures are part of our continent’s history, but must not be a narrative in our future.
We cannot achieve our objectives of an empowered Africa without considering the consequences of continuing carbon emissions on climate change.
Besides anything else, we know that the effects of climate change will most radically impact poorer countries, whose citizens can’t afford the costs of securing their lives against insecure weather systems.
That’s why we are already seeing the phenomenon of what are termed climate refugees, who can no longer occupy ancestral land because of changing conditions.
These first casualties are not from the rich north. They are islanders from the deep south.
Africa can’t afford to sit back and watch. Not when we are already feeling the impact of climate change, ourselves. Most notably in the Western Cape, which is presently in the grip of an extreme drought.
There are some in the room who will respond that the solution is simple, and it lies in renewable energy.
But things are not quite so simple in a developmental state, where coal-fired energy has formed the spine of the economy for generations. What about jobs? What about the economies of coal-mining towns? What is more important: People’s ability to eat in the short term, or the earth’s long-term ability to breathe?
I’d answer: Both!
Of course, we must reduce carbon emissions. But we must do so in a manner that ensures we don’t experience a nett loss of jobs.
That is the long-term deal we must seek to strike with the renewable energy sector.
It goes beyond the price Eskom pays per kilowatt at the check-out counter, although that is obviously important, and implies the necessity for serious localisation and labour up-skilling or re-skilling strategies.
South Africa’s Department of Energy will soon publish a new Integrated Resource Plan. We know that the plan will require us to move away from our dependency on coal to embrace a new energy mix derived from coal, gas, nuclear and renewable resources.
Although it’s tough to make structural adjustments in a slow-moving economy, besides continuing with its new build programme, Eskom is already busy with projects aimed at reducing air pollution from its coal-powered stations, and offsetting emissions. The company is also proactively participating in researching new technologies such as biomass and underground coal gasification.
We know that in the context of a globalised world, where the mess created by the rich north most severely impacts poor people in the south, we are not alone in our quest for more equitable and sustainable solutions.
South Africa, and Eskom, which is among the world’s largest power utilities, stand ready to collaborate with the rest of the continent and the world to address common continental and global challenges.
If you’ll allow me to conclude on a bitter-sweet note
While it is a fact that Eskom’s operational performance has significantly improved � that the load-shedding and virtual bankruptcy of two and three years ago have been consigned to history � you all know that Eskom has been embroiled in a series of serious allegations of maladministration and corruption.
None of the allegations have been proven in a court of law, but they have fundamentally eroded the company’s integrity � and that of the Sovereign � and will continue to do so until they are engaged by the appropriate law-enforcement agencies and addressed, one way or the other.
Certain matters are now in court, so I am a little constrained in what I can say.
Let me just say that as the shareholder’s representative, reliant on the company’s Board and management for accurate information, I have recently had reason to question the veracity of some of the answers I have been given.
I have therefore instituted various measures including changing the Board, and establishing a deep dive investigation (to be conducted by the Special Investigations Unit) into all allegations of impropriety that have surfaced at Eskom over the past ten years.
I have also asked the new interim Board of Eskom to conduct certain short-term investigations of their own, and report to me with recommendations.
There will be more announcements in this regard in due course. About Eskom, and other state-owned companies in my department’s portfolio
It is heartening that the ruling party and government have agreed on the necessity for further investigation, too.
We must be very clear that maladministration and corruption are enemies of radical economic transformation and the developmental state.
But we must be equally clear on the necessity for transformation: That if we don’t spread the wealth that state-owned companies such as Eskom generate, more widely than it has been spread up to now, we are doomed to an insecure and unsustainable future.
That doesn’t just go for South Africa, but I would hazard to say, for other African countries, too.
I would like to thank Power-Gen and DistribuTECH Africa for facilitating this dialogue, which I now leave in your capable hands.
Source: Government of South Africa