Unpacking SA’s energy plans & the role of banks

South Africa's economy has faced significant challenges in reaching its full potential, largely due to power supply issues caused by Eskom. However, recent developments in the energy sector signal a potential transformation on the horizon. Energy Minister Gwede Mantashe recently announced the winning projects for emergency power procurement, a move that has been widely welcomed by industry experts. Joining CNBC Africa to discuss the implications of these announcements are Daniel Zinman, Head of Power & Infrastructure Sector Solutions at RMB, and Amith Singh, Head of Energy Finance at Nedbank. The energy landscape in South Africa is poised for change, with key players in the banking sector stepping up to finance critical energy projects. Zinman expressed excitement about the recent announcements, highlighting the strict timelines set for bringing much-needed megawatts onto the grid. The urgency of the situation is evident, with successful bidders required to reach financial close by July 2021 and deliver energy by August 2022. The total investment size of around 45 billion presents a significant opportunity for both local and international players to participate in the energy sector. Singh emphasized the vital role of independent power producers in ensuring energy security and supporting South Africa's transition to a more sustainable energy mix. The success of previous renewable energy procurement programs has attracted substantial investments from various stakeholders, showcasing the potential for private sector involvement in energy generation. Despite the ambitious timelines set for project completion, industry experts remain optimistic about the prospects of meeting the deadlines. Zinman highlighted the collaborative efforts needed to ensure the success of these projects and the importance of adhering to the non-negotiable timeline set by the government. With the first projects expected to be operational by August next year, stakeholders are gearing up for a busy period of project development and implementation. The clear roadmap outlined by the Energy Minister provides much-needed certainty for market participants and offers opportunities for local industry development. While the recent announcements have been largely positive, some concerns remain regarding the allocation of funding and the need for enhanced local content in energy projects. However, overall, the sector appears to be moving in the right direction with significant milestones achieved, including the introduction of battery energy storage systems in the African independent power producer space. The easing of regulations in the commercial and industrial market segment is expected to further contribute to the country's energy supply. Moving forward, continued collaboration between government, industry players, and financial institutions will be crucial in driving the successful implementation of energy projects and ensuring a more secure and sustainable energy future for South Africa.