South Africa’s energy minister promises transparency in nuclear deal

South Africa’s Electricity and Energy Minister, Kgosientsho Ramokgopa, has reiterated the government’s commitment to transparency in developing a framework for the procurement of the country’s additional nuclear capacity.

Ramokgopa said the government was advancing plans to procure nuclear energy to keep the lights on, News24 reported on July 14.

“Nuclear is an important part of that intervention,” the minister was quoted as saying. “We are working on the framework for procurement because we don’t want to discredit the process through a procurement process that is not transparent. Of course, we will do it at a scale and speed that we can afford as a country.”

Ramokgopa was addressing the media on July 13, speaking on the margins of the first Cabinet Lekgotla of the Government of National Unity (GNU) at the Sefako Makgatho Presidential Guest House in Pretoria. The Tswana word “lekgotla” means a public place where consultations between groups pursuing a common goal are conducted.

The energy crisis has had a profound economic impact, affecting South African businesses and households alike. There is a perceived lack of transparency and accountability in how decisions are made and funds are allocated for energy projects. This, coupled with reported entrenched corruption within the state-run power utility Eskom, has eroded public confidence in the government’s ability to effectively manage the energy crisis.

Ramokgopa acknowledged his understanding of increasing public distrust for government initiatives and stressed that his department would be transparent in its undertakings.

“All that we are doing is that we are going in that direction, and what is important is the transparency of the process because it can be soiled and discredited,” he said as cited by News24. “We want to ensure that it is competitive and is something that we can afford... and, of course, at the right time, we will be able to announce to the country the direction that we are taking,” he added.

South Africa is home to the continent’s only operating Koeberg nuclear power plant (NPP). Nuclear power provides a reliable and stable source of electricity, which is seen as crucial for reducing rolling power outages, locally called load shedding, implemented by Eskom to prevent the national grid from collapsing.

In December 2023, the South African government announced its plans to build new nuclear power stations to generate more electricity and stabilise the country’s energy supply.

According to Ramokgopa, initial plans to procure nuclear power aimed at securing 9,000 MW. However, the minister has recently announced his intention to secure funding from the National Treasury for a 2,500-MW NPP, as reported by Newsbase.

Past nuclear deals, such as the one with Russia’s state-owned nuclear corporation Rosatom in 2014, have been marred by allegations of corruption and lack of transparency. That deal was eventually ruled unlawful and unconstitutional by the Western Cape High Court.

Critics also argue, that building nuclear power plants is extremely expensive, and the country cannot afford the massive debt that would result from such projects.

Addressing these concerns, Ramokgopa stated that there was a new technology now, like the small modular reactors, which were cheaper to deploy.

“That procurement framework answers all the questions, including the cost,” he said. “From a nuclear point of view, the costs are upfront capital costs and allocation for procuring nuclear - but, in terms of its operational costs, we can use Koeberg as an example, it is the cheapest form of electricity.”

The minister also stressed that it was important to resolve the capital allocation issue.

“We know that the country’s balance sheet has deteriorated. Eskom is not in a good place with regards to its balance sheet, so you need to find a bespoke financing instrument to make it possible for us to deploy a nuclear.”

Ramokgopa added that once the framework had been finalised, the department planned to clarify everything to the nation.