Adjustment the budget review welcomed


SAPVIA says it welcomes the work done by Treasury over the last few months around the recalculation of the contingent liabilities attributed to renewable energy IPPs which it says has been misrepresented to the public by Eskom.

The renewable energy industry has engaged with Treasury officials over the last few months on this matter. SAPVIA is pleased with the adjustment in the statistical tables of the budget review, and notes with interest the upward adjustment of Eskom’s exposure over the same period.


R millions 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Guarantees for Eskom 2016 budget 125 125 149 944 168 539 190 064 204 932 215 373
2017 budget 125 125 149 944 174 586 216 199 242 984 264 843 283 542
Guarantees for IPPs 2016 budget 200 132 200 132 200 132 200 132
2017 budget 68 345 96 159 113 971 125 766 119 085 112 796 104 114

Table 1: Guarantees for Eskom and IPPs.

According to SAPVIA, this is important as Matshela Koko, Eskom’s  interim CEO, has made a number of “disparaging remarks” on social media in recent months about the size of the contingent liabilities associated with the IPP programme and the wisdom of Treasury providing such guarantees. The PV association argues that this has only been done by Eskom in an attempt to gain larger guarantees for its own ballooning new build programme and to fund its nuclear energy ambitions.

SAPVIA has also commended Koko’s words of warning and recognition of the “obstructive nature of Eskom’s actions towards the IPP industry” and in particular around the implementation of financial close for Bid Window 4, the small IPP programme and the announcement of preferred bidders for the expedited round. SAPVIA reports that Eskom’s continued delays on signing budget quotes for the connection of IPPs not only undermines the REIPPP programme as one of South Africa’s key FDI attractors, but also further endangers the livelihoods of local IPPs and manufacturers.

SAPVIA looks forward to the political commitments made recently to the renewable energy industry by the president in his State of the Nation address and the Minister of Finance in his budget speech being converted into executive actions in the coming weeks.

Contact Kim Thomas, SAPVIA, Tel 021 200-5856,

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