By Jaya Josie - Advisor China Africa Center, Zhejiang University International Business School (ZIBS) & Professor Adjunct, University of Venda
Ambassador Chen Xiaodong from the Peoples’ Republic of China (PRC) yesterday officially presented the first batch of 450 emergency generator sets to South Africa as part of its contribution to mitigate the effects of load shedding.
The ambassador said that the batch of generators represents just 5.8% of the overall donation that was promised by President Xi Jinping during his State visit in August 2023. The generator sets were recently shipped from Shanghai to the port of Durban and are urgently needed for health and educational institutions in communities most affected by load shedding.
In his speech, the ambassador noted that China is in the process of the early production and separate shipment of the rest of the large number of equipment. The shipment is valued at R150 million and includes five power supply trucks, 39 sets of diesel generators and 60 sets of solar energy storage power supply systems that will be subsequently arriving in South Africa in the near future.
The contribution from China was first announced by the Minister of Electricity, Dr Kgosientso Ramokgopa during the signing of a Memorandum of Co-operation (MoC) between South Africa and eight entities from China on the sidelines of the August BRICS Summit in Johannesburg.
Today’s handover ceremony is taking place in Pietermaritzburg, the capital of the province of KwaZulu-Natal and will proceed to the Eskom Howick CNC stores, from where it will then move to the Newton Pre-Vocational School in Scottsville. The Howick area is famous as the place where Nelson Mandela was arrested by the apartheid police in the early 1960s.
Minister Ramokgopa will officially receive the first consignment of the promised equipment during an official handover ceremony in Pietermaritzburg. This first consignment includes 450 generators which will be deployed to various health and public service facilities across the country. The handover ceremony will attended by officials from the provincial government and messages from the Minister of Public Enterprises, Pravin Gordhan and the Deputy Minister of Health, Dr S Dlomo will be read.
Recently, rolling electricity blackouts in South Africa - or load shedding, as it is called - has increased substantially. The South African government has been grappling with this emergency as lives of people and the economy comes under extreme pressure.
The most important challenge for the country and its economy currently is load shedding. On the November 16, the Minister of Electricity reported before the Parliamentary Committee on Public Enterprises. He revealed that load shedding is costing South Africa R1 billion a day and has a negative impact on GDP growth that is recently estimated at R204mn to R899mn daily. He pointed out that key industries such as agriculture, fisheries, manufacturing, mining, transport, storage and communication are the most affected. The projected job losses for 2023 is projected to exceed 800 000. This will be devastating in a country with one of the highest rates of unemployment. Furthermore, basic public services such as health, education and other public services in disadvantaged communities are severely affected, with negative impacts on the lives especially of women and children. In a recent report (October 4, 2023) Business Tech reported that load shedding reached record levels over the last year - causing incredible financial strain in the public and private sectors.
In the meantime, the South African Reserve Bank (Sarb) indicated that the country’s economic growth for 2023 would be cut by two percentage points as a result of load shedding. SARB estimated that with the negative impact of load shedding in 2023 surpassing the 2022 figure of R560bn, the country can expect an even worse impact by the end of this financial year.
When he signed the MoC for emergency equipment in August, Minister Ramokgopa affirmed that over 500 public facilities will have access to an uninterrupted alternative power supply as a result of the contribution from China. He indicated that the equipment has the capacity to support a clinic and a medium-sized hospital bringing real relief to disadvantaged people in South Africa. The minister also noted that the emergency assistance will allow communities to have a power supply that will mitigate the effects of load shedding. The Minister also indicated that China went through a similar crisis of power cuts and deficits in electricity generation, and that China uses coal for generating much of its electricity. However, in recent years the country has moved robustly to renewable energy sources of electricity generation, and today much of rural China is powered by renewable energy. China has become the world’s largest producer of wind and solar equipment for electricity generation. In the exchange of letters signed in August 2023 the emphasis was on the provision of sustainable electricity to some of the major public installations such as clinics, hospitals and police stations. The equipment consists of 552 units including generators, power supply vehicles and off grid photovoltaic (PV) energy storage supply systems. 450 units of generators will be handed over at the ceremony in Pietermaritzburg and some will be installed.
The Co-operation Agreement between South Africa and China is the outcome of many years of collaboration and co-operation across diplomatic, economic and trade relations in the context of the BRICS, the Belt and Road Initiative (BRI) and the Forum for China Africa Cooperation (FOCAC). As with other countries in Africa, the co-operation with China goes beyond government-to-government relations. The Minister of electricity signed the MoC for China’s support for South Africa’s electricity challenge with several companies based in China. The companies include the State Grid Cooperation of China; China Africa Development Fund; China Energy International Group; China General Nuclear Power Corporation; China National Electrical Engineering Company, Ltd; Huawei Technologies Co Ltd; TBEA Co., Ltd; and, Global Energy International Development and Cooperation Organisation. These companies have already been assisting South Africa with generating capacity and expertise and, have submitted reports on how to deal with the current problems besetting ESKOM. The Minister further explained that although China has the biggest coal generating capacity in the world and, having experienced what South Africa is currently experiencing, they now have the biggest energy capacity of any country in the world estimated at 688 gigawatts.
Tapping into the expertise and technical capacity of energy companies in China will require financing. In August the Minister of Electricity underscored the fact that China has reserves of financial liquidity that South Africa may be able to access at concessional and cheaper rates than elsewhere. South Africa may also be able to tap into China’s nuclear expertise as the country currently has the biggest nuclear capacity in the world and, South Africa’s energy transition plan includes further developing its nuclear capacity. Notwithstanding the emergency assistance, the Minister of Electricity was not very optimistic about the prospects of resolving the load shedding crisis in the short term. He predicted that country will have to expand its comprehensive strategic energy plan to incorporate importing hydroelectric power from Mozambique and extend its nuclear energy supply. Over the years China has been able to assist many countries in Africa develop their physical infrastructure for electricity, transport, roads and ports. South Africa now has the opportunity to tap into its long-standing relationship with China to refocus its collaboration and draw on China’s wealth of experience in infrastructure projects to include cooperation in electricity, rail transport, and ports. The South African physical infrastructure is in dire straits has the country witnessed recently with congestion at its major ports causing delays in the import and export of goods. The handover of emergency electricity generating equipment in Pietermaritzburg is just the beginning of what looks like the possible long-term cooperation and collaboration between China and South Africa.