South African Energy Minister Tina Joemat-Pettersson told Parliament’s Portfolio Committee on Energy on 11 October that the National Treasury would not be funding the nuclear new build programme, but that state-run utility Eskom would raise the money in the international markets and would be the owner-operator of the nuclear plants. Eskom’s balance sheet will be used to leverage funding. “I want to categorically state that there is no basket of money in Treasury that will be used for this programme, just as there was no basket to build Medupi, Kusile and other huge power plants,” she said. The tow coal-fired plants are long-delayed from the initially planned April 2011 commissioning date. She added: “The money will be found off the global markets. Eskom will deliberate and give us a better idea on how they fund projects,” she said.
She also told the committee that, following the decision of Eskom board in September, that the utility should resume its role as majority owner-operator for NPPs, the Department of Energy (DoE) would recommend to Cabinet that Eskom is designated as the procurer of the envisaged 9,600MWe of nuclear energy from plants to be situated at sites in the Western and Eastern Cape. Previously that responsibility had rested with DoE. In addition, the South African Nuclear Energy Corporation (Necsa) should be designated as the procurer for the fuel-cycle and multi-purpose reactor components of the programme. DoE would act as the “programme coordinator”.
A request for proposals for the new build programme was expected to be issued on 30 September, but was delayed so that the Cabinet could approve the updated Integrated Resources Plan (IRP). The IRP, which was due to go to Cabinet in early October, had been postponed. Joemat-Pettersson said Cabinet approval was necessary before the IRP could be published for broader consultation. “We want a full composition of the Cabinet committee to be present when we discuss it,” she said.
Faced with financial troubles and load-shedding in 2014, Eskom had said it would not be prudent to provide further funding to other programmes, as it needed to focus on Medupi, Kusile and other projects under construction.
However, Eskom and DoE officials told the committee that Eskom’s financial position had been turned around and that it was far more efficient. “We have turned the corner. Eskom is ready to execute the nuclear build programme,” Eskom group executive for generation Matshela Koko told MPs.
Joemat-Pettersson said DoE was a policy-making department and was not involved in signing any deals. She used the parliamentary platform to again deny allegations that a deal for nuclear procurement had already been signed with Russia. “This procurement method we are announcing today should demystify the myth that I've signed some deal. I've not signed any nuclear deal,” she said. “I have no interest in what or who procures. The reality remains that Eskom is the only owner/operator of nuclear. The reality remains that all our policies and laws...designate Eskom as the owner of the nuclear power plants.”
She added that her next immediate “ambition” was to help improve the working relationship between Eskom and the National Energy Regulator of South Africa. “I will ensure that the process is above board; that the pace, scale and price of the programme is within the accessible range of our country. We will ensure that the process is not only transparent and above board, but is free from corruption, that it has the necessary security clearance and that we protect the integrity of the programme against any inadvertent risks.”