Address by Ms Buyelwa Sonjica, Minister of Minerals and Energy, at the Corporate Council on Africa meeting at Hamilton Crowne Plaza, Washington DC

Programme Director,
President of the Corporate Council on Africa (CCA), Mr. Stephen Hayes,
Officials representing the United States (US) government,
Members of the diplomatic corps represented here,
Members of the CCA,
All protocol observed

I wish to firstly appreciate the invitation by this august body to share this time with you. It is also most opportune for us to attend a conference which brings together players from all over the globe to discuss an issue which affects every nation. This conference gives us a platform to share the challenges facing our country in the energy sector.

Over the last few months we have been experiencing power outages as a result of the sustained growth we have recorded in our economy. This growth is unprecedented in the history of South Africa. Safe to say, the government has developed the energy response plan to deal with this situation and since February we have stabilised. Central to the energy response plan is the power conservation programme, which includes energy efficiency and demand side management (experience of Brazil and others included protocols of power rationing and reduction of use; others negatively impacted upon particularly the mining sector).

Energy is central in fuelling the growth of our economy. This has been reflected in growth exceeding five percent per annum over the last three years. Naturally, as we continue to sustain our growth, ensuring security of energy supply is of paramount importance to the South African government.

The energy security master plan for liquid fuels was approved by Cabinet in August 2007. The electricity master plan and the bio-fuels industrial strategy were approved by Cabinet in December 2007. These plans relate to the investment requirements and energy security in the respective sectors.

Part of the responsibility of the current government is to ensure access of basic services, including electricity, to millions of people who were previously excluded. Nowadays South Africa remains a country at peace with itself politically, mainly due to the conscious drive to ensure such access. Democracy and political stability thrive in our country. We remain a preferred destination for investments.

The ruling party, the African National Congress (ANC), went through a democratic process of electing a new leadership. Such an experience is no different to the political processes currently unfolding in the USA right now. The policies of the ruling party were democratically endorsed and remain in place. Let me then use this opportunity to reiterate that there is regulatory certainty in the functioning of government, including the energy sector. All the pieces of legislation that have been promulgated in the energy sector promote competition as well private sector participation, and public private partnership. We are still committed to the economic growth of our country in tandem with our global partners.

Investment opportunities abound in our energy sector as demand currently outstrips supply. Economic opportunities manifest themselves in energy infrastructure and capital investment programmes embarked upon by Eskom in a R1,4 trillion (approximately 180 billion US dollars) capital investment over the next 20 years.

Government has pledged an additional R60 billion (7,5 billion US dollars) towards this effort over the next three years. We have projects in generation, transmission, distribution, development of new power stations, re-commissioning of previously mothballed power stations, capacity upgrade and refurbishment of two other currently operating power stations. All these new build programmes will need investment for the supply of capital equipment as well as technology.

Our government has opened opportunities for Independent Power Producers (IPPs), who will generate an expected 30 percent of the power required. We have just issued the first two licenses for IPPs, with a capacity of about 1 000 megawatts each.

There are also opportunities for investment in the construction of storage and distribution facilities in liquid fuels, additional refining capacity in crude oil refinery and synthetic fuel productions, bio-fuels production facilities and power generation from renewable energy sources.

The opportunities that present themselves in the area of gas include natural gas and liquefied natural gas - import and re-gasification facilities to be used in the gas fired power stations. Opportunities also exist in the upgrade of port facilities to carry all types of gas products. We will be constructing a petroleum pipeline infrastructure which would take liquid fuels from the coast to inland and service the country's economic hub.

There are huge opportunities for power generation from renewable energy sources, for example solar, biomass, wind and hydro at regional level (Inga falls in DRC Congo). There is recognition of the leadership of the US in the bio-fuels sector and we wish that such an experience will be shared with us in time, particularly in the development of second generation technology. South Africa is the gateway to the African continent and one of the biggest economies in Africa.

We have an established Designate National Authority that looks at Carbon emission reduction projects under the Kyoto Protocol, which promotes investments in clean energy technologies, and mitigates against climate change. Research and development feature prominently in our endeavour towards the attainment of security of supply, a case in point will be the development of the Pebble Bed Modular Reactor to augment our energy supply. We look forward to your active participation in the growth of our economy for our mutual benefit.

I thank you.

Issued by: Department of Minerals and Energy
5 March 2008