In the past two years companies in Mozambique have announced major gas discoveries off the Rovuma Basin in the northern province of Cabo Delgado. Since the power crisis of 2007–2008 the energy industry in South Africa has been in a precarious state. South Africa's 2011 Integrated Resource Plan for Electricity 2010–2030 identifies two urgent priorities for the country's energy sector: to ensure a secure energy sector through obtaining resources for power generation, and to curb carbon emissions by including cleaner sources such as gas in the energy mix. Against the background of the recent discoveries in Mozambique, the value of natural gas resources to South Africa's energy industry cannot be ignored. South African companies, alone or in consortium, are already active in Mozambique's energy sector and sound diplomatic relations between the two countries favour further entry into the sector. Investment in Mozambique's newly discovered resources would do much to alleviate South Africa's energy insecurity. To do so, however, demands an appropriate level of commitment from South Africa at political, financial and economic levels. Whether South Africa's energy industry will seize the opportunities depends on the adaptability and responsiveness of the institutions and strategies that govern the sector. The paper concludes with four policy recommendations.
Written by Ichumile Gqada
SAIIA Policy Briefing