South Africa

PRETORIA – The maintenance and refurbishment of ageing infrastructure is a common motivation put forward by municipalities applying for tariff increases above the National Energy Regulator of South Africa (Nersa) guideline of 20.38% for 2011/12. City Power Johannesburg, which proposes an increase of 22%, says that the average age of transmission infrastructure has reached 63% of its accepted useful life, and that it needs to build infrastructure to support major projects. Current City Power Johannesburg demand reached 3.6 GW in 2010, and with an additional 200 000 consumers already added to its electricity grid, it expects future demand, excluding efficiency improvements and power saving strategies, will be in excess of 5.4 GW. The City of Tshwane is asking for a 22.38% tariff increase. Requiring some R76-million for refurbishments in its 2012/13 budget, Nelson Mandela Bay municipality, which has a backlog of some R122-million for refurbishment and bad debt, is pushing for a 25.82% tariff increase. The Eastern Cape municipality’s capital replacement reserve has depleted and the capital budget was reduced from R264-million to R61-million for the 2011/12 financial year, and R91-million for 2012/13. “The municipality is experiencing an increase in faults, as well as network infrastructure that is aging and major refurbishment is required. This has become an area of great concern. Failure to address refurbishment and maintenance will severely limit the safe operation of the network and the ability to make provisions for future developments,” Nelson Mandela Bay’s Mvuleni Bukula says.

PRETORIA – State-owned power utility Eskom has confirmed that R250-million has been set aside as part of a ‘standard offer’ to business consumers, including hotels, commercial property companies and light manufacturers, that are able to prove a reduction in their power consumption patterns. Successful applicants will secure a three-year contract with Eskom, with 40% of the payment made after the energy savings have been made and verified. The balance will be paid in tranches at the end of each year. Integrated Demand Management (IDM) senior GM Andrew Etzinger says that the scheme will be implemented on a first-come-first-served basis and that no new contracts will be entered into after March 31, 2013. Participants can approach Eskom directly, or mandate an energy services company to submit applications for projects ranging in size from 50 kW to a maximum of 1 MW. A process of monitoring and verification will be instituted and Eskom hopes to save 50 MW under the scheme, which forms part of the larger IDM aspiration to reduce power consumption by about 1 073 MW by March 2013. The National Energy Regulator of South Africa has already set aside R5.4-billion through the tariff mechanism to support the overall initiative. Technologies to be considered under the standard offer include lighting, building management systems, hot water systems and process optimisation. A pre-approved rate/kWh for energy savings has been set for each technology.

JOHANNESBURG – The intervention by the South African government seeking to impose conditions for Wal-Mart’s ‘large merger’ with JSE-listed Massmart is not a generalised statement of the country’s opposition to foreign direct investment (FDI), says Trade and Industry Minister Dr Rob Davies. Davies explains that the Department of Trade and Industry (DTI) sought the conditions in line with the legislation that governs such corporate activity. The Competition Act lays the basis for merger control where such a merger could have implications for employment and local industrial development. Davies adds that government will also consider the employment and industrial implications of greenfield FDI, as is currently the case regarding shale gas exploration and development by Shell and others in the Karoo. South Africa has put in place a moratorium on the issuing of hydraulic fracturing, or fracking, licences to allow it time to understand the possible environmental, employment and industrial implications of unconventional gas mining. Davies stresses that these interventions do not imply government does not welcome foreign investors, adding that South Africa is actually seeking to increase its FDI levels. He notes that his performance contract, as well as those of a number of other economic cluster Ministers, places emphasis on the need to boost domestic and foreign investment.

CAPE TOWN – African National Congress (ANC) Parliamentarians have called for an extension of the looming deadline to complete the drafting of the Protection of Information Bill after its ally, the Congress of South African Trade Unions, voiced strong opposition to the draft law. “We want to request an extension of the life of this ad hoc committee,” ANC lawmaker Lluwellyn Landers says. “The deadline of June 24 is inadequate.” Landers suggests that the new deadline be somewhere in the second week of the new Parliamentary session, which starts on July 22. Chairperson Cecil Burgess has agreed to seek an extension from the Speaker’s office. This move marks a turnaround for the ANC majority on the committee, which, during the past two weeks, seemed determined to drive the Bill through Parliament despite widespread calls that it is unconstitutional.

Africa & the world

NEW YORK – World leaders at a United Nations AIDS summit have launched a plan to try to eliminate by 2015 most new HIV infections among children, who inherit the condition from already infected mothers. The campaign was launched as the leaders also agreed on a target of reaching 15-million people with HIV treatment, more than double the number who currently get it, also by 2015. Both goals are announced just weeks after groundbreaking new data shows that early treatment of the human immunodeficiency virus, or HIV, which causes AIDS, can cut its transmission to a sexual partner by 96%. In 2009, some 370 000 children were born with HIV, or one nearly every minute -- the vast majority of them in 22 countries, almost all in Africa. But providing HIV-positive pregnant women with treatment can reduce the risk of a child being born with the virus to less than 5%. The UNAIDS organisation and the US President's Emergency Plan for AIDS Relief (PEPFAR), which are jointly managing the campaign, say it will aim to reduce the number of child infections by 90% by 2015.

ADDIS ABABA – With just one day to go before nominations close for the next head of the International Monetary Fund, the African Union (AU) says that it would like to see a non-European in the position, preferably an African. The AU has not put forth a name for their preferred candidate to replace Dominique Strauss-Kahn who stepped down last month as managing director of the International Monetary Fund to fight sexual assault charges. South Africa's former finance minister Trevor Manuel has been seen as a possible candidate but he has not formally been nominated. "Selecting a non-European and particularly someone from the developing world would go a long way in increasing voice and representation at the IMF for these countries," the AU says. French Finance Minister Christine Lagarde is front-runner in the race but Colombia was the first major Latin American country publicly to back Mexico's central bank chief Agustin Carstens for the job, saying a dozen other countries from the region also support his candidacy. Emerging economies would like a candidate from their group to head the fund but have not rallied behind one nominee. The AU says a compromise would be for the number two post at the Fund to be given to a European.

BONN – There is not enough time to meet a December 2012 deadline to put in place a binding successor to the Kyoto Protocol on curbing greenhouse-gas emissions, the United Nations’ (UN’s) top climate official says. New targets with equal legal force to Kyoto will have to ratify them in national Parliaments, says Christiana Figueres, head of the UN’s climate secretariat. It is now considered impossible to meet the December 2012 deadline, given that the earliest a deal can be agreed on will be at the end of this year in Durban. Even that timetable is widely viewed as unlikely, says Figueres.

ABIDJAN – Africa’s economic growth rate is likely to slow to 3.7% in 2011 from 4.9% in 2010, owing to political unrest and regime changes in North Africa, the African Development Bank (AfDB) says. “Serious headwinds weigh on the momentum for expansion in 2011, notably the political events in North Africa and high fuel and food prices,” the bank says in its annual economic outlook. “The first quarter of 2011 has been among the most turbulent in Africa’s history.” Egypt and Tunisia ousted their Presidents this year, political protests were staged in several other North African countries and Western governments have become involved in a conflict in Libya. North Africa is the region likely to suffer the biggest knock, the AfDB says, forecasting growth in the region to slow sharply to 0.7% in 2011 from 4.6% in 2010, before picking up to above 5% in 2012. Growth across Africa is expected to accelerate to 5.8% in 2012, but there are risks from the impact of the earthquake and nuclear crisis in Japan, civil war in Libya and the effects of postelection conflict in Côte d’Ivoire. East Africa’s economy is expected to achieve growth of 6.7% this year, up from 6.2% in 2010, but West African growth is likely to ease to 6% from 6.7%, owing to the Ivorian conflict. Foreign direct investment (FDI) is estimated to have fallen to between $50-billion and $52-billion in 2010 from $59-billion in 2009 and from a peak of $72-billion in 2008. Oil-exporting countries account for 75% of FDI flows.