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That a South African firm is one of the major financiers in an independent power project in Kenya – while Eskom maintains a monopolistic stranglehold on power generation, transmission and distribution at home – highlights the urgent need for the Independent System and Market Operator (ISMO) bill to be passed.

ABSA Capital South Africa, in partnership with the World Bank and the African Development Bank, is set to provide financing for private power producers in Kenya. These producers will increase Kenya’s electricity generation capacity by 285 megawatts to spur economic growth and improve its competitiveness. Kenya already scores better than South Africa on the World Bank’s Ease of Doing Business Report in terms of ‘getting electricity’.

The first project alone will add 87 megawatts of supply capacity. Total financing capital being made available for all projects will amount to approximately $400 million. The Kenyan government’s plan is to increase capacity by a further 2000 megawatts in the medium term.

Eskom has purposefully blocked the passing of the Independent System and Market Operator (ISMO) bill, thereby crowding out critical investment necessary to improve South Africa’s electricity generation supply capacity. The passing of this legislation would open up the South African electricity market to independent power producers and greatly contribute to alleviating electricity supply constraints. The good news is that parliament’s portfolio committee on energy has decided to pass the legislation with or without Eskom’s cooperation by the end of the year.

Independent power producers are part of government’s plan to improve supply capacity, but at this stage Eskom are providing the tenders instead of opening up the market to necessary competition.

The DA will continue to do everything in its power to break Eskom’s monopolistic hold over electricity in South Africa. Local firms are clearly chomping at the bit to invest in energy projects, but are currently crowded out by an unwieldy parastatal.