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This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The first hot-rolled coil (HRC) has been produced at Scaw Metals' Union Junction complex in Ekurhuleni, heralding the reintroduction of competition into South Africa's flat-steel market. The R5-billion steel investment, which has been 75% funded by Absa and Investec and 25% funded by the State-owned Industrial Development Corporation, is also the first new flat-steel mill to be built domestically since Saldanha Steel in the 1990s, but which has since been mothballed. The project will increase Scaw's overall steelmaking capacity from about 500 000 t/y to 750 000 t/y once fully ramped-up; a process that is expected to unfold over the coming 45 days. Barnes Group CEO Doron Barnes - whose company acquired Scaw Metals, together with its Haggie and McKinnon Chain units, in May 2018 - tells Engineering News that the casting of the first coil on August 11 represents a milestone for the company and the country. For Scaw, it adds HRC to the group's primary steelmaking portfolio, which has hitherto consisted of only long-steel products. As is the case with the long products produced by Scaw, the larger Barnes Group expects to absorb about half of the new mill's output across its various downstream operations. The balance will be sold to domestic customers that are currently mostly reliant on imported material for their tubing, shelving and re-rolling operations. Based on state-of-the-art Danieli processing equipment, the Germiston plant will produce narrow- and medium-width HRC up to a metre, at gauges of between 1.2 mm and 6.0 mm. Barnes estimates that the plant will replace about R4-billion-worth of narrow-gauge steel imports yearly. For South Africa, meanwhile, Barnes believes the investment will help address the current domestic manufacturing imbalance between flat and long steel. While significant long-product capacity is currently in place, there has been no flat-steel alternative to ArcelorMittal South Africa (AMSA) since the closure of Highveld Steel in 2016. He also believes that the investment offers tangible evidence of the benefits that can flow as a result of government's decision to place restrictions on scrap metal exports. "I realise there is some negativity about the scrap export tax and the price preference system, but without these interventions we would struggle to access affordable material and there would be no advantage to manufacturing scrap-based steel in South Africa," Barnes states. Describing it as an industrial policy success story, Barnes admits to being concerned about current efforts by AMSA and others to have the scrap export trade restrictions overturned. While acknowledging that the policy has placed pressure on AMSA's Newcastle operation, he also points to the pricing differential that has emerged between long- and flat-products as a result. Barnes attributes the dramatic improvement in prices for downstream consumers of long products to a combination of producer competition and a policy intervention that has offered mini-mills certainty of scrap supply at competitive prices. He, thus, calls for ongoing policy certainty, which he believes could stimulate further investment, including by Scaw, which is considering a R1-billion investment into a new electric arc furnace. Another advantage highlighted by Scaw's Mzamo Mjekevu is the fact that the mill is producing flat and long steel that is regarded as "greener" than material being produced in blast furnaces. This, owing to the lower carbon footprint associated with the electric-arc furnace process, where direct emissions can be near zero if the electricity is sourced from renewable energy, and the fact that "circularity" is embedded through the use of scrap. The group is continuing to assess options for improving the green credentials of its steel even further by integrating renewable electricity...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Electricity and Energy Minister Dr Kgosientsho Ramakgopa has confirmed that an independent technical assessment of the R6.1-billion billing dispute between State-owned utility Eskom and the City of Johannesburg's (CoJ's) wholly-owned electricity utility City Power will be carried out over the next 14 days. Upon conclusion of the technical assessment on November 25, a final decision will be reached. Both parties have agreed to abide by the findings in full, whatever the outcome. This is expected to definitively resolve the issue and effectively keep the matter out of the courts. "There is no crisis looming. There's been some degree of trepidation [and] unease. Businesses have got some apprehension. Organised voices have raised the issue of what are the possible implications of this action by Eskom materialising, resulting in electricity interruption to Johannesburg. It's going to have dire consequences. "But I'm confident that, once we get to conclude this technical assessment, we'll be able to provide a way forward in the most absolute fashion," Ramakgopa said at a media briefing in Johannesburg on November 11. The announcement, made alongside CoJ executive mayor Dada Morero and various executives from City Power, comes after Eskom threatened last week to implement power cuts across the city from December 14 if City Power does not pay its bills. The disputed bills in question involve R3.4-billion in historic debt - which forms the primary focus of the dispute - along with an outstanding current account of R1.4-billion owed for October and an upcoming R1.3-billion for November, which is not yet payable, City Power CEO Tshifularo Mashava confirmed. City Power began to default primarily because it disputed its monthly Eskom bill. Ramakgopa made it clear that this approach was problematic and that the user-pay principle must be upheld. "If an individual customer has a query, that customer has an obligation to pay that current account as you set in motion the process of resolving the query. Once you are able to get to the bottom of the dispute, then you'll find remedies on how to then rectify the situation, historically, and also going forward, in the form of a credit note. But the customer still bears the obligation to pay until that dispute is resolved," he said. As such, City Power has now agreed to immediately pay up its current account in full and has committed to remaining up to date with this going forward. Ramakgopa said the non-payment of the current account was what spurred Eskom to react and that the resolution of the current account default would effectively alleviate Eskom's concerns and stave off the utility's threats of city-wide power cuts. "We have agreed [to the payment of the current account] because that is what had resulted in the triggering of that notice [by Eskom to implement power cuts]. It falls away because of a commitment to pay the current account, so the notice then gets to be withdrawn. "Really what the notice was seeking to do was to ensure that we get to that point, that we pay the current account as we resolve the [historic] issues there that have been placed before Eskom by City Power," Ramakgopa explained. While the payment of the current account will stave off an immediate crisis, the technical assessment will seek to resolve the ongoing billing dispute regarding the R3.4-billion in outstanding historic debt, which dates back to 2019. However, it will also seek to verify or correct the accuracy of Eskom's billing to City Power so that billing disputes do not arise again in future. Ramakgopa said the independent expertise required for the assessment will be sourced from within the State, albeit from bodies that have no relation to either City Power or Eskom. He said the parties would be approaching the South African National Energy Develo...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Government has confirmed that the Independent Power Producer Office (IPPO), which has overseen the public procurement of more than 7 300 MW of operational renewable-energy capacity since 2011, will oversee a pilot programme to procure South Africa's first independent transmission projects (ITPs). Speaking at Res4Africa's yearly conference in South Africa, the National Treasury's Jeffrey Quvane said that the decision had been made in light of the capabilities and frameworks that had been created at the IPPO to successfully carry out public procurement. However, he indicated that that this institutional arrangement could be changed after the pilot phase, indicating that the procurement could in future be carried out by a new entity or even the National Transmission Company South Africa (NTCSA) itself, which has been operating as an independent subsidiary of Eskom Holdings since July. The decision to procure new grid capacity using the ITP approach, Quvane explained, was based on a government assessment that South Africa's transmission infrastructure deficit, which was impeding the connection of new generation capacity, was a "country problem" that could not be addressed using the NTCSA's balance sheet alone. The transmission investment backlog was estimated at R390-billion. Incorporating private sector participation was also seen as a way of maintaining the financial discipline associated with the R250-bllion Eskom debt-relief package. The package included restrictions on the raising of new debt by the entity to fund capital projects; restrictions that were less stringent, however, when it came to transmission investments. The National Treasury was also aiming to implement an ITP procurement model that did not add further contingent liabilities to the national accounts and was working with the World Bank on a credit guarantee instrument that was structure to de-risk such investments for investors and lenders in the absence of government guarantees. Quvane said the current priority was to finalise the regulations required to facilitate private sector participation in line with the Electricity Regulation Amendment Act, to which President Cyril Ramaphosa had assented following its passage through Parliament but which was not yet in operation. Work was also under way to finalise a Ministerial determination opening the way for such procurement. Ministry of Electricity and Energy official Joseph Maraba told conference delegates that the regulations would be released for public comment early next year before being finalised. Quvane indicated, meanwhile, that government aimed to finalise both the regulations and the Ministerial determination by the end of March. No timeframe was provided for the identification of the pilot projects themselves, which would be selected together with the NTCSA from the priority powerline projects included in the NTCSA's recently updated Transmission Development Plan. Likewise, no timeframe was provided for the issuance of the request for proposals. However, the recently released Medium-Term Budget Policy Statement confirmed that a pilot ITP procurement process was being prepared for the second half of 2025 using a build-operate-and-transfer model and supported by the new credit-guarantee vehicle. The World Bank's Multilateral Investment Guarantee Agency has been playing a central role in designing he instrument, which will seek to mimic the role that government guarantees conventionally play to de-risk projects for developers without exposing the national balance sheet to more contingent liabilities. Several development finance institutions will be approached to participate and Quvane indicated that it was likely to be canvassed during an upcoming National Treasury roadshow at the end of November.

Engineering News editor Terence Creamer discusses Eskom's opposition to the National Energy Regulator of South Africa's decision to grant four new electricity trading licences; whether Eskom's opposition to the granting of the licences came as a surpsie and what will happen next.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The newly appointed head of Scatec's sub-Saharan Africa business, Alberto Gambacorta, says the group is pursuing a 5 GW pipeline of renewable energy and storage opportunities in the region and especially South Africa, which is already the Norwegian group's global hub for engineering and operations. Gambacorta, who was named GM for Scatec sub-Saharan Africa on November 6, tells Engineering News that the region remains a priority market for the Oslo-listed company, where it has invested about $2.5-billion since 2011. Having been a regular and successful participant in South Africa's various public procurement bid windows for renewable energy, hybrid generation and battery energy storage, Scatec is also positioning itself for the private market opportunities that have come to the fore as a result of regulatory changes. These will be pursued through the Lyra Energy platform that Scatec launched jointly with Standard Bank and Stanlib earlier in the year and which offers distributed access to utility-scale renewable energy to medium and large commercial and industrial companies. Gambacorta says the offering relies on a wheeling model, but that the participants are assessing trading prospects and are, thus, paying close attention to regulatory developments relating to the licensing of new traders, which Eskom is currently opposing legally. He is also keeping close tabs on the potential for independent transmission projects in South Africa, noting that the company has already built many kilometres of power lines and substations in South Africa to connect its plants to the national grid. Scatec will also continue to participate in public procurement having recently progressed the 103 MW/412 MWh Mogobe battery energy storage project, valued at $170-million, in the Northern Cape to commercial close. The company is also the engineering, procurement, and construction (EPC) contractor for the project and will provide it with operations and maintenance (O&M) as well as asset management services. In fact, its Cape Town office is also an EPC and O&M global hub, providing such services for Scatec projects and operations globally and even to some third parties. At about 300, South Africa also has the highest number of employees in the larger group, and Gambacorta, thus, listed talent development as a key priority as he takes up his new role. Gambacorta himself holds a Master of Science in Mechanical Engineering degree from Universitá degli Studi di Padova, and subsequently completed an Executive Masters in Energy Management from ESCP Business School, BI Norwegian Business School, and IFP - Institute Francais du Petrole. Having worked for Scatec in Europe, Asia and South America, he moved to South Africa in 2018 where he served as senior VP of business development at Scatec and was instrumental in developing the company's project portfolio in South Africa and Botswana. "Southern Africa represents a crucial market for renewable-energy development, and I am honoured to take on this role. "I look forward to working with our talented team and stakeholders to accelerate the country's energy transition and deliver sustainable power solutions," Gambacorta says.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The newly appointed head of Scatec's sub-Saharan Africa business, Alberto Gambacorta, says the group is pursuing a 5 GW pipeline of renewable energy and storage opportunities in the region and especially South Africa, which is already the Norwegian group's global hub for engineering and operations. Gambacorta, who was named GM for Scatec sub-Saharan Africa on November 6, tells Engineering News that the region remains a priority market for the Oslo-listed company, where it has invested about $2.5-billion since 2011. Having been a regular and successful participant in South Africa's various public procurement bid windows for renewable energy, hybrid generation and battery energy storage, Scatec is also positioning itself for the private market opportunities that have come to the fore as a result of regulatory changes. These will be pursued through the Lyra Energy platform that Scatec launched jointly with Standard Bank and Stanlib earlier in the year and which offers distributed access to utility-scale renewable energy to medium and large commercial and industrial companies. Gambacorta says the offering relies on a wheeling model, but that the participants are assessing trading prospects and are, thus, paying close attention to regulatory developments relating to the licensing of new traders, which Eskom is currently opposing legally. He is also keeping close tabs on the potential for independent transmission projects in South Africa, noting that the company has already built many kilometres of power lines and substations in South Africa to connect its plants to the national grid. Scatec will also continue to participate in public procurement having recently progressed the 103 MW/412 MWh Mogobe battery energy storage project, valued at $170-million, in the Northern Cape to commercial close. The company is also the engineering, procurement, and construction (EPC) contractor for the project and will provide it with operations and maintenance (O&M) as well as asset management services. In fact, its Cape Town office is also an EPC and O&M global hub, providing such services for Scatec projects and operations globally and even to some third parties. At about 300, South Africa also has the highest number of employees in the larger group, and Gambacorta, thus, listed talent development as a key priority as he takes up his new role. Gambacorta himself holds a Master of Science in Mechanical Engineering degree from Universitá degli Studi di Padova, and subsequently completed an Executive Masters in Energy Management from ESCP Business School, BI Norwegian Business School, and IFP - Institute Francais du Petrole. Having worked for Scatec in Europe, Asia and South America, he moved to South Africa in 2018 where he served as senior VP of business development at Scatec and was instrumental in developing the company's project portfolio in South Africa and Botswana. "Southern Africa represents a crucial market for renewable-energy development, and I am honoured to take on this role. "I look forward to working with our talented team and stakeholders to accelerate the country's energy transition and deliver sustainable power solutions," Gambacorta says.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. South Africa's Industrial Development Corporation (IDC) is in the process of setting up the institutional capacity to house the Green Hydrogen Just Energy Transition (JET) Secretariat, which is being established as the country's single point of contact and coordination for public and private green hydrogen initiatives. COO Joanne Bate tells Engineering News that recruitment processes are under way and that the secretariat, which will be coordinated and set up by Mahandra Rooplall, should be fully staffed by early 2025. It will also be ringfenced from the development finance institution's own commercial strategy in the area of green hydrogen, which will be pursued in parallel. The secretariat will support the coordination of activities that have been identified as essential to the eventual development of a green hydrogen industry and ecosystem, including global advocacy in areas such a standard setting and the creation of frameworks to firm up the initial offtake needed to secure project finance. It will also support the efforts of workstreams that are being established to facilitate decision-making on various cross-cutting issues. These relate to project funding, the supply of and demand for green hydrogen, the shared infrastructure needed to lower the capital costs of investments, the provision of support for technology incubation and skills development, the crafting of supportive policy and regulation and ongoing community engagement. The decision to establish the secretariat follows both the finalisation of the implementation roadmap for the JET Investment Plan - which includes scope to support green hydrogen alongside electricity and new energy vehicles - and the Green Hydrogen Commercialisation Strategy. The strategy has identified two distinct markets, namely export demand, driven by the international trade of green-hydrogen derivatives, and domestic demand, driven by fuel switching and new use cases in the areas of mobility, industrial processes, agriculture and power. Bate says that both markets are receiving attention, but that priority will be given by the secretariat to key project enablers, such as offtake, standards and shared infrastructure, the absence of which is impeding commercial development. Bate says it is particularly important for South Africa that there is consistency in the definition of offtake rules across key importing countries in Europe and Asia so as to help de-risk South African projects. "If you're exporting low-carbon hydrogen that qualifies as low carbon or green in Japan and Europe and those rules change, there's a risk that your offtake will be compromised. "And that's why we are prioritising the issues of ensuring consistent standards and rules around the carbon-intensity of the product." It is likely that the South African strategy will also be refined over time, given that certain market opportunities for South Africa - such as fuel-switching in the marine sector - are seen as potentially materialising ahead of other opportunities identified in the strategy. "Our initial view was that shipping was probably a 2030 to 2035 opportunity. "But given the focus on decarbonisation of shipping and given South Africa's location on a number of global trade routes, we believe that there could be an opportunity to accelerate." Bate acknowledges growing cynicism about the prospects for green hydrogen, and acknowledges that this scepticism has arisen partly because of the initial hype. However, she argues that it remains a high-potential industrialisation opportunity for South Africa, owing to the country's natural resource advantages in the areas of sun, wind and land and the proposal that production be based largely on desalinated water. "This is a 25-year value chain opportunity, which requires systematic efforts to unlock and to de-risk. "W...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. JSE-listed AECI has announced the signing of a share purchase agreement with a consortium involving Old Mutual Private Equity (OMPE) and Sphere Investments to sell its entire ownership stake in wholly-owned subsidiary Much Asphalt for an estimated R1.1-billion. The deal will be financed through a combination of debt and equity and is expected to close during the first quarter of next year. Much Asphalt manufactures and supplies bituminous products that are widely used in infrastructure projects, such as road and runway construction, as well as for private applications. Its product offerings include hot and cold asphalt, bituminous road binders, emulsions, primers, precoats and modified binders. AECI said the divestment was in line with its strategic focus on core businesses, specifically AECI Mining and AECI Chemicals. The company said on November 4 that the move reflected its intent to divest from operations that do not closely align with its primary business objectives. This reallocation aligns with AECI's strategy to streamline its portfolio and establish a foundation for future growth. AECI further stated that this shift is intended to improve operational efficiency and enhance performance by leveraging in-house expertise in areas where the company possesses strong market potential and competitive advantages. The sale remains contingent on approval from the Competition Commission, as well as the finalisation of a restructuring agreement between AECI Mozambique and Much Asphalt Mozambique regarding operations in Mozambique. For the year ending December 31, 2023, Much Asphalt recorded earnings after tax of R74-million. "Together, OMPE and Sphere provide a platform for financial strength, market access and long-term success for Much Asphalt. This transaction is another significant step in our strategic journey, and we are pleased with the outcome," AECI group CEO Holger Riemensperger said. OMPE said such an investment in South Africa's road infrastructure, a key enabler of economic growth and job creation, aligned with the objectives of the Government of National Unity. This aspect, when combined with Much Asphalt's competitive offering, meant that the company would be well-positioned to play a meaningful role in the country's road infrastructure spend over the medium to long term. "Road infrastructure plays a pivotal role in enabling economic development, connecting South Africans and empowering previously disadvantaged communities in isolated parts of our country. Our investment in Much Asphalt is a continuation of our 21-year track record of investing in high-quality businesses which supply critical goods and services to their customers," Sphere director Mohammed Sabi said. The transaction marks the first and anchor investment in OMPE's newly launched OMPE Fund VI. OMPE and Sphere will partner with the management team over the investment tenure and will seek to generate transformative growth and business transformation to generate a robust return on investment. "We have confidence in the infrastructure repair initiatives under the new South African government and actively look to invest behind sectors that we think will recover to more normal levels over the medium to long term, compared to a volatile and abnormal last ten years for the South African economy. An effective road network is critical to the . . . rebuild that is underway in South Africa, which should stimulate economic growth and lead to the creation of new jobs," OMPE co-head Jacci Myburgh said.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The Independent Power Producer (IPP) Office has confirmed that it will oppose a legal attempt by two renewables consortia to prevent the payout of preferred-bidder guarantees called after their projects failed to advance to commercial close. Both consortia - Engie-Pele Sannapos Solar PV Consortium and Globeleq-Mainstream SA Renewables Power - were selected as preferred bidders during Bid Window 5 (BW5) of the Renewable Energy Independent Power Producer Procurement Programme, launched in 2021. A total of 2 600 MW was allocated for procurement from wind and solar PV technologies during the bid window, which was the first renewables round initiated in line with Ministerial determinations arising from the Integrated Resource Plan of 2019. It also followed a long procurement hiatus, triggered when Eskom announced in 2015 that it would no longer enter into new power purchase agreements with IPPs based on a claim that Eskom had sufficient generation capacity. South Africa subsequently experienced extreme power disruptions, which have since tapered with loadshedding having been suspended since March 26. A total of 25 wind and solar preferred bidders were selected during a round where the weighted average price across both wind and solar PV projects came in at 47.3c/kWh, the lowest prices bid since the launch of South Africa's renewables programme in 2011. Several projects, however, ran into financial difficulties amid supply-chain disruptions associated with Covid lockdowns and a spike in energy prices that followed Russia's invasion of Ukraine in February 2022. A number of BW5 projects, thus, failed to reached commercial close, triggering the payment of preferred-bidder guarantees. The two consortia initiated their legal challenges in October after the IPP Office "presented the preferred bidder guarantees for payment on the basis of the terms thereof". "Their action is an attempt to prevent a payout by ABSA Bank of the preferred bidder guarantees," the IPP Office told Engineering News in response to questions. The IPP Office also confirmed its intention to oppose both cases, saying that "once the pleadings have been closed the matter will be heard". However, it refused to be drawn on the amounts involved or on what the request for proposal documentation said regarding the conditions for forfeiture of preferred-bidder guarantees. It was also not clear whether similar attempts could be made by others, given that 14 projects with a combined capacity of 1 400 MW selected under BW5 failed to advance to financial close, while five projects with a combined capacity of 1 600 MW had failed to close under the risk mitigation round. During a briefing in October, Electricity and Energy Minister Dr Kgosientsho Ramokgopa expressed his support for the pulling of bid bonds even if it resulted in legal challenges. "We must stick to the rules of this programme," he said.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. More than 40% of South Africans are considering purchasing an electrified vehicle (EV) in the next five years. This is according to a survey by Ford Motor Company, with most respondents preferring hybrid technology. EV in this instance includes hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs). Ford conducted the survey across Australia, Saudi Arabia, Philippines, New Zealand, South Africa, South Korea, Thailand, Vietnam and the United Arab Emirates. Ford is gearing up to build and sell the PHEV Ranger pickup in South Africa. "This research highlights the need for continued efforts to educate the public about EVs, address concerns about cost, range and infrastructure, and to promote the benefits of electric mobility," says Ford South Africa product marketing executive director Sunil Sewmohan. Ford says the research revealed that South Africans are relatively familiar with EVs, with most respondents classifying them as being 'fun to drive', 'cool', 'sporty' and 'easy to own'. More than 30% of respondents said they had ridden in an EV, with 19% claiming to have driven one, and more than 70% noting that they had at least read about EVs. However, almost half of respondents in South Africa said they were not aware of any public charging sites within 20 km of their homes. Twenty per cent of respondents said they were concerned about the resilience of the power network, with 47% saying they were worried about EV charging infrastructure. Service stations ranked highest as the preferred location for charging sites, followed by shopping centres and office buildings. According to almost three-quarters of those surveyed, possible future loadshedding in South Africa would impact their decision to buy a BEV. Similarly, 70% said charging infrastructure would affect their decision to purchase a BEV. When it comes to the type of EV, HEVs came out on top, followed closely by PHEVs, with BEVs ranked third. Saving money by not buying fuel was rated as a top benefit of owning an EV, but many believe maintenance costs for EVs are higher in the long run. Just under 40% of respondents believe that charging an EV at home is as expensive as filling up a petrol- or diesel-powered vehicle.

Engineering News editor Terence Creamer discusses the key themes of the first Medium-Term Budget Policy Statement of the Government of National Unity, delivered by Finance Minister Enoch Godongwana, including specific moves to unlock private sector participation to build new transmission infrastructure.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Scaling up private-sector participation (PSP) in the delivery of infrastructure emerged as a central component of the "pro-growth agenda" outlined by Finance Minister Enoch Godongwana in his first Medium-Term Budget Policy Statement (MTBPS) since the formation of the Government of National Unity. Public and private fixed investment levels currently stand at about half of the targeted 30% of gross domestic product (GDP) set in the National Development Plan, and the MTBPS describes the quality of public-sector infrastructure spending as suboptimal and the quantity as inadequate. "As a result, existing infrastructure is deteriorating, backlogs are growing and the cost of providing infrastructure is high. "This represents both a challenge and an opportunity," the MTBPS reads. While government would restructure the way public infrastructure projects were prepared and financed, Godongwana emphasised the measures being taken to mobilise private resources to augment constrained public capability amid weak growth. Notwithstanding the 3% growth target set as an aspiration for 2025 by government and business, the National Treasury is forecasting growth of only 1.7% next year, on the back of a forecast of 1.1% for 2024, which represented a downward revision from 1.3% forecast in the February Budget. Such low growth continues to place strain on the revenue outlook (which was also lowered by R22.3-billion in the MTBPS) and the fiscal balance, which currently reflects a debt burden of R5.26-trillion or 74.1% of GDP, and has resulted in debt-service costs now consuming 21.6% of revenue. Government had identified higher levels of infrastructure investment as crucial for lifting growth and employment, but was also pursuing a fiscal strategy aimed at narrowing the consolidated Budget deficit from 5% of GDP in 2024/25 to 3.2% in 2027/28, while stabilising debt at 75.5% of GDP in 2025/26. CREDIT ENHANCEMENT TOOL The MTBPS, therefore, lists a series of reforms geared towards catalysing greater PSP in infrastructure, including a proposal to launch a credit enhancement instrument to de-risk projects for developers and lenders, while mitigating government's need to add to contingent liabilities. The instrument is being developed with the support of the World Bank and is also being canvassed with private reinsurers. It will initially be used to support independent transmission projects (ITPs), with the lack of electricity grid infrastructure having emerged as a constraint to connecting new renewable-energy plants. The National Treasury confirmed that a pilot ITP project was being prepared for next year using a build-operate-and-transfer model, but did not provide further specifics regarding the institutional arrangements. However, ongoing reference was made to the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) as a "template" for the procurement of public infrastructure. The REIPPPP projects have been procured through a dedicated structure known as the IPP Office. It was also confirmed the credit-enhancement vehicle would be operational by the end of 2025 and that the tool would be used as part of the new blended financing risk-sharing platform to help de-risk the ITPs. The lessons learned from the REIPPPP in unlocking private-sector investment were also being drawn on to increase private participation in transactions in other sectors, notably water and freight logistics, where the credit-enhancement vehicle would be introduced over the medium term. In water, the private sector could participate through performance-based contracts and public-private partnerships (PPPs). "Performance-based contracts for the nonrevenue water programme [water leaks] are being fast-tracked in the eThekwini, Tshwane, Nelson Mandela Bay, Buffalo City and Mangaung metros." Meanwhile, Trans...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) has approved four new electricity trading licences, the issuance of which had been opposed by Eskom, along with the country's first-ever private import/export licence. The Energy Regulator, which is Nersa's highest decision-making body made the approvals during their meeting on October 29, agreeing with the approval recommendation agreed to by the Electricity Subcommittee on October 1. Trading licences were issued to CBI Electric Apollo, Discovery Green, Green Electron Market and GreenCo Power Services, while the import/export licence was issued to GreenCo Power Services. Nersa fulltime regulator member for electricity Nhlanhla Gumede noted Eskom's objections, which were made by its distribution division during public hearings held on July 18. Eskom argued that Nersa was prohibited from allowing two or more licensees in a single distribution supply area and accused the traders of "cherry picking customers". The objection was lodged despite the fact that Nersa had already issued six trading licences since 2014 to PowerX, EnPower Trading, Neura Trading, Energy Exchange of Southern Africa, Envusa Trading and to Eskom Holdings' National Transmission Company South Africa (NTCSA). Gumede said a distinction had to be made between a distributor, the number of which needed to be restricted to ensure the efficient and safe operation of the physical distribution network, and traders, which facilitated the buying and selling of electricity over those networks but did not operate them. He indicated that there was no legislative or regulatory restriction on the number of traders and noted that the Electricity Regulation Act encouraged competition; a principle that had been reinforced and amplified in the Electricity Regulation Amendment Act to which President Cyril Ramaphosa had recently assented. Nevertheless, he did highlight the urgent need for Nersa to finalise a framework and rules for electricity traders as well as for wheeling given the prospects of many more trading applications in the coming years. The Energy Regulator also agreed that additional work was required to firm up the framework for import/export licences, when approving GreenCo's ground-breaking application. Africa GreenCo CEO Ana Hajduka described Nersa's decision to grant the company the two licences as a "powerful endorsement of the potential for private sector collaboration to drive South Africa's energy transformation in collaboration with key players like Eskom and NTCSA". GreenCo commercial manager for South Africa Precious Mpepele added that the import/export licence would drive a transparent, interconnected energy market in Southern Africa to deliver renewable electricity. The company had signed long-term power purchase agreements (PPAs) with independent power producers in South Africa and Botswana and the trading and import/export licences respectively would enable GreenCo to sell electricity bought from those suppliers to Sibanye-Stillwater operations in South Africa. Apollo Africa CEO Jenna Harris also welcomed Nersa's decision, which she said reaffirmed the regulator's commitment to uphold the Energy Regulation Act and promote broader participation in the electricity market. "We firmly believe, as demonstrated in mature electricity markets, that competition is the most efficient way to reduce the cost of power to the market. "This is in the best interest of our economy where electricity forms the foundation input costs for all primary and secondary industries in South Africa," Harris added, indicating that Apollo looked forward to working with Eskom to assist in jointly shaping a new and sustainable market structure. Sturdee Energy executive director Andrew Johnson told Engineering News that the award of a trading licence to Sturdee Energy's Green...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. South Africa will call for the New Collective Quantified Goal (NCQG) on climate finance to be set at $1.3-trillion yearly during the upcoming COP29 climate negotiations, which will be held in Baku, Azerbaijan, from November 11 to 22. The NCQG is the finance goal that parties to the Paris Agreement are expected to set prior to 2025 from the current yearly floor of $100-billion; a target that developing countries have long argued as being too low and have also criticised developed countries for failing to honour. During stakeholder consultations ahead of COP29, Forestry, Fisheries and the Environment Minister Dr Dion George argued that the current financing mechanisms had proved insufficient in scale and effectiveness, which he said highlighted the urgency for a new financing model. "COP29 presents an opportunity to advocate for innovative and improved financial frameworks that can mobilise substantial resources more efficiently. "Such a model must ensure predictable, accessible, and adequate funding, and address the shortcomings of existing systems and empowering countries like South Africa to implement ambitious climate actions." The NCQG, the Minister added, should provide a clear and ambitious quantification of the financial support needed by developing countries to implement their Nationally Determined Contributions (NDCs) or decarbonisation pledges, as well as their National Adaptation Plans, and should also reflect their inclusive just transition pathways. "Access to finance must be significantly scaled up to offer new, additional, and predictable funding that is fit for purpose. "Specifically, we need grants and highly concessional financing that can be effectively allocated to create enabling environments for rapid investments. "By de-risking investments and creating new asset classes for clean technologies, we can unlock and leverage greater amounts of public and private finance," George said. Business Unity South Africa (Busa) environment and energy director Happy Khambule concurred, saying that the NCQG should be larger and more comprehensive. "Current climate finance flows have been insufficient and non-additional, shifting the disproportionate cost of climate action to developing economies despite their limited fiscal capacity. "Recent proposals for cross-border tax adjustments - targeting goods imported from developing countries to fund developed country climate obligations - are particularly concerning," Khambule added. Busa also supported the principle that developed economies should provide financial, technological, and capacity-building assistance, but stressed that this support should not place undue financial burdens or impose unjust conditions on developing countries. "Crucially, climate finance should not exacerbate current developing country debt crises.' Presidential Climate Commission executive director Dr Crispian Olver, who has been appointed deputy chair of the commission from January 1, said COP29 and progress on the NCQG was crucial for setting the tone for the next round of NDCs, which countries were expected to lodge in 2025. The current NDC's are not aligned with the goal of limiting global warming to 1.5°C above pre-industrial levels. The 'Emissions Gap Report 2024' published by the United Nations Environment Programme recently warns that unless the level of NDC ambition is increased and there is faster implementation, the world is on course for a temperature increase of between 2.6°C and 3.1°C over the course of this century. South Africa plans to submit its new NDC in June, with consultations expected to start in April. Olver highlighted that securing NDC ambition would be challenging in the current geopolitical environment. Nevertheless, he argued that South Africa should do what it could to ensure that the Baku gathering represented...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The automotive industry is "definitely seeing progress" in its discussions with Transnet on developing the southern rail corridor between Gauteng and Gqeberha and Coega, in the Eastern Cape, says Ford Motor Company Africa president Neale Hill. Discussions on this project started in 2019 already. Vehicle manufacturers in Gauteng - BMW, Ford and Nissan - currently move their vehicle exports mainly through Durban. These manufacturers also have to transport imported components to their plants via Durban, as well as bring in imported vehicles for the local market. Ford's logistics via the Durban port are currently divided between rail and road. The local arm of the US vehicle manufacturer produces the Ranger bakkie for the local and export markets at its Silverton plant in Pretoria. "We are making progress in our discussions with Transnet," says Hill. "We'd like there to be more progress, but we are seeing movement, especially now that Transnet has a new management team. "You are now dealing with people with years of experience; people who have grown up in the organisation." Hill notes that there is a vulnerability in a system where so many vehicle manufacturers are dependent on a single export route. "All of us would consider Gqeberha. Look at the recent floods in Durban and snow in KwaZulu-Natal and how that affected exports. "We, as Ford, must also support a very specific shipping schedule, and these vessels don't wait if there is a snarl-up on the highway." This said, Hill notes that Transnet has moved to improve the rail service between Gauteng and Durban. "We are seeing greater capacity coming in on the Durban line for automotive. The line is being upgraded and we are seeing more trains coming through - but, again, we would definitely like to see more happen. "With our production schedule we would ideally like to see more vehicles on rail as opposed to vehicles going on the roads." Hill says Ford has no preference as to whether the southern corridor is operated by Transnet, a private-public partnership, or a third-party operator. "We are not prescriptive as to what the ultimate solution should look like, but we would like something that is effective, efficient and reliable. "And, as I said, our engagement with Transnet has been phenomenal. We do see some green shoots." Ford produces between 650 to 680 Rangers a day, of which around 65% is exported, says Hill. "You are looking at exporting 400 vehicles a day, so we want four trains a day - and that's just us, not Volkswagen, BMW or Nissan. "We also import components for the Silverton plant. "As an industry, we believe there is enough opportunity to fill the railway line both ways." The Volkswagen, Isuzu and Mercedes-Benz plants are located in the Eastern Cape and also need to transport their vehicles - made locally and imported - to customers in the north of the country. Hill says he hopes to see material movement on the development of the southern corridor in the next 18 to 24 months. Naamsa | The Automotive Business Council and Transnet earlier this month signed a memorandum of understanding (MoU) to convene a naamsa-Transnet 'auto war room'. This war room will drive the collection, consolidation and sharing of data to support the implementation of strategic initiatives, while it will also monitor key railway performance indicators, slot availability/capacity, and rolling stock availability and utilisation. The MoU also supports the development of priority infrastructure projects by the State railway owner, including the southern corridor.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. A new matchmaking platform to directly link providers of grant funding pledged to South Africa's Just Energy Transition Investment Plan (JET-IP) with domestic beneficiaries is aiming to ensure the disbursement of at least R600-million in grant funding to 20 projects in 2025 and facilitate disbursements of R1.5-billion to 50 projects in 2026. Grant recipients could include local small firms, trade unions and municipalities, as well as community-based and nongovernmental organisations. Known as the JET Funding Platform, the online tool was officially unveiled at a function in eMalahleni, Mpumalanga; the province identified as "ground zero" for South Africa's efforts to cushion workers and communities whose lives and livelihoods could be negatively affected by the shift from coal to renewable energy. The website through which potential grant beneficiaries can apply for funding will be launched on November 1. Speaking at the JET Funding Platform unveiling on October 25, Minister Patricia de Lille, who spoke in her capacity as acting Electricity and Energy Minister, said the platform was not a fund itself, but rather a way to improve visibility of the pipeline of potential JET projects that could be supported by grant funders. A total of $821-million in grant funding linked to South Africa's JET-IP has been pledged by the International Partners Group of France, Germany, the UK, the US and the EU, which have now been joined by Denmark and Netherlands, as well as by Canada, Switzerland and Spain, which are supporting the JET-IP bilaterally. Grants make up a small portion of the larger $11.6-billion pledged in support of South Africa's JET-IP, which will target investments in the electricity, new energy vehicle and green hydrogen sectors. The bulk of the funding is being made available in the form of concessional loans, including policy-linked loans to the National Treasury. While South Africa is continuing to call for yet more grant funding there has also been criticism that the initial grants have been directed mainly towards entities and consultants from the countries providing the funding. The funders, meanwhile, have indicated that the pipeline of potential grant-ready domestic projects is limited. The development of the matchmaking platform, which has been overseen by the JET project management office in the Presidency, is accompanied with a plan to further grow the pipeline by providing project preparation support to potential beneficiaries. JET Funding Platform manager Jerrod Moodley said at the launch that various initiatives would be undertaken to support potential beneficiaries with their project preparation so as to expand the number of grant-ready applications that could be made through the online system. Once an application was submitted, Moodley said that it would be assessed against the eligibility criteria set for the JET-IP, as well as whether it was ready to be proposed to a potential funder. Funders would then complete their own assessments before deciding whether or not to approve a grant. The category of projects that could receive support has been broadened well beyond climate-mitigation projects to include projects that could enable the transition, those that were supportive of economic transformation, community empowerment and ownership, as well as those that could promote economic diversification, improve governance and compliance, and projects deemed to have a high and sustainable impact. "JET Funding Platform stands as a beacon of hope - a mechanism designed to connect the most deserving projects and communities with the critical grant funding needed to achieve objectives set out in the JET-IP," De Lille said.

Engineering News editor Terence Creamer discusses government's review of the current framework through which electricity capacity is procured from independent power producers (IPPs); the reasons for the review; and what changes are being considered.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Despite welcome relief from loadshedding in South Africa, a total of 3.3 GW of renewable-energy projects were registered with the National Energy Regulator of South Africa (Nersa) this year, with more than 2 GW registered in the third quarter alone. Analysis conducted by Gaylor Montmasson-Clair, senior economist at Trade and Industrial Policy Strategies, indicated that the surge in registrations during the quarter, from 606 MW in the first quarter and 732 MW in the second, could be attributed to a few large projects. These included a 475 MW solar PV project in the Free State, which Montmasson-Clair described as the biggest single registration since such projects were exempted from licensing in 2021, as well as a 380 MW wind farm in the Western Cape, a 310 MW wind farm in Mpumalanga and a 240 MW wind project in KwaZulu-Natal. He said the strong performance during the quarter, which was the second best since the licensing exemption was introduced, may indicate that economics rather than loadshedding was now driving the market. The highest number of registrations recorded in a single quarter was the 2 467 MW registered by Nersa in the first quarter of 2023 when South Africa was experiencing almost daily loadshedding. Montmasson-Clair noted the prominence of wind projects, as well as the rise in registrations in the Mpumalanga province; developments that were supportive of both system stability and diversity and a just transition in the main coal region of South Africa. Electricity and Energy Deputy Minister Samantha Graham-Maré also highlighted the rise in registrations during the third quarter, describing the surge as a milestone and a "sign of confidence in South Africa's renewable-energy market". "Our goal is to accelerate even more gigawatts of renewable energy by continuing to remove unnecessary institutional red tape and making South Africa an even more attractive proposition for investors," Graham-Maré said in a statement. Her commentary follows confirmation by Electricity and Energy Minister Dr Kgosientsho Ramokgopa that the procurement framework was being reviewed for projects procured through public bid windows. Such projects had faced relatively more difficulties in recent years in advancing to financial close than was the case in the private-to-private market, for which Nersa registrations offered a proxy. Particular attention was being given to ensuring that future procurement processes were conducted in a way that available grid was utilised, through curtailment and possible regional bidding rounds, as well as to the streamlining of grid-connection processes. Consideration was also being given to holding smaller, more frequent bid windows so as to improve competitive outcomes and create a smoother pipeline of projects around which local industrial capacity could be developed. The outlook for private procurement, meanwhile, was difficult to forecast, with Montmasson-Clair noting that the quarterly data were heavily influenced by a few large-scale projects. "But, overall, 2024 looks like another solid year for the private market," he said. The pipeline of private projects being tracked by Operation Vulindlela, which is a joint initiative of the Presidency and the National Treasury, stands as 22.5 GW, while the latest edition of the South African Renewable Energy Grid Survey pointed to projects with a combined capacity of 133 GW at various stages of development across the country. The result represented a dramatic increase from the 66 GW highlighted in the 2023 edition.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Nissan South Africa (SA) will see production drop to under 20 000 units this year, down from almost 25 000 units last year, but it is not the end of local assembly at the Rosslyn plant, says MD Maciej Klenkiewicz. The drop in production follows the Russian invasion of Ukraine, which railroaded Nissan's efforts to find a successor for the successful NP200 half-ton bakkie, which sold around 10 000 units a year in the South African market. "It wasn't our choice to end production of the NP200. Unfortunately, it is one of those occasions where global politics influenced what happened in South Africa," says Klenkiewicz. "We had a plan for a successor to the NP200. It was supposed to be built on a platform created in Russia, together with Renault. "When we exited Russia, we left behind the entire project. It was a big loss - it was more than 40% of our volume, so it was significant." The loss of the half-tonner saw Nissan SA wrap up a process last year to shrink its workforce by 28%. In terms of product, the Datsun range was also discontinued in 2022, which hurt Nissan SA in the budget-car market, and this in a domestic economy that has been failing to gain traction. Nissan SA's product portfolio now consists only of the Navara pickup (produced in Rosslyn in single-cab and double-cab versions), as well as the Magnite and X-Trail sports-utility vehicles (SUVs). Klenkiewicz and his team, however, have plans to expand vehicle assembly at Rosslyn and to grow the Nissan product portfolio in South Africa. Tweaking the Navara range to better suit customer needs has seen production and sales of this one-ton bakkie increase by 28% from April to end-September, says Klenkiewicz. In South Africa, sales are up 25%, and this in a declining bakkie market. This year will also be the first time in a long time that Nissan SA's Navara export volumes will be higher than its domestic Navara sales. Nissan SA is hard at work to secure more export destinations in Africa and the Middle East, with Rosslyn the only Navara source plant for Africa. Klenkiewicz says sales have already expanded into Egypt and Libya, with Algeria next on the list. Ghana, with its own semi-knockdown plant, is currently the car maker's biggest export market. "We are trying to maximise our opportunities; we are trying to keep production as high as possible in Rosslyn." Klenkiewicz also aims to introduce new products for assembly in the Rosslyn plant. "We are working on solutions in terms of light commercial vehicles and pickups. Of course, our priority is to find a successor for the NP200, but we have been forced to start from the beginning, so there will be a delay of up to two to three years." Any new product that will be assembled will be in addition to Navara production, says Klenkiewicz. The goal is for the Nissan SA plant to again reach 50 000 units a year - a figure where it can gain the full benefits of government's Automotive Production and Development Programme. For this to happen, the company may have to look at two new products for local assembly, and not just one, but this process is likely to take more than five years. In terms of the local product line-up, the Japanese marque will bring in a new five-seater and seven-seater SUV to South Africa in 2026 - both bigger than the Magnite - potentially doubling sales in South Africa, says Klenkiewicz. "We are also working - it has not been confirmed yet - to bring in a product below the Magnite, in the A-segment. This may come in before 2026." This first 'new' Nissan product that will make its debut, however, is the Magnite cargo version, due out before the end of the year. This converted SUV, already available in India, targets the delivery and/or last-mile logistics sector. Chinese Competitors Nissan is feeling the heat of the influx of Chinese brands into South Afri...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. There is potential to catalyse rapid industrialisation in Africa by pursuing policies that actively leverage both existing demand and continental moves towards trade integration to increase the production of manufactured goods, a well-known industrial policy and automotive specialist has argued. Speaking at the Manufacturing Indaba in Johannesburg, Toyota Wessels Institute for Manufacturing Studies' Professor Justin Barnes made the case for developing regional value chains that tapped into existing demand rather than seeking only to sell into growing African markets. Using the example of the African automotive market, which Barnes has studied extensively, he argued that there was potential for significant manufacturing growth using regional value chains to overcome the current constraints of insufficient economies of scale, limited production capabilities and the ongoing importation of used vehicles. While his research pointed to a weak outlook for new vehicle sales in South Africa, owing to dim prospects for the growth of the middle class, he pointed to a far more promising prognosis for several countries in both East and West Africa. Using a yearly income threshold of $10 000 for an adult in Africa to be in a position to buy a car, he argued that African vehicle sales could rise to about 3.4-million by 2035 from an estimate of about 2.5-million units in 2025. The forecast was based on current economic and income growth forecasts, as well as an assumption that countries terminated policies allowing for the importation of pre-owned vehicles from other regions. The forecast also catered for Barnes' assessment that South African vehicle sales, which were currently the highest on the continent, were likely to lift only modestly over the period, from about 563 000 to about 614 000. By contrast, there were potential high-growth nodes in West Africa, where Nigerian sales could rise from about 241 000 vehicles to 350 000 and Ghana could increase from 81 000 to 148 000, as well as East Africa, where Kenyan sales could rise to 156 000 by 2035 from 93 000. Barnes also exhibited results from his recent modelling of automotive sales in the Economic Community of West African States region, where the combined sales of Côte d'Ivoire, Ghana, Nigeria and Senegal were set to surpass those of South Africa from 2028 onwards. "This indicates that there are huge opportunities for the development of the automotive industry across Africa," he said. Besides addressing the problem of second-hand imports, he also said that far greater emphasis should be given by policymakers to the micro, meso and macro interventions needed to support regional value chains and the implementation of the African Continental Free Trade Area Agreement. However, it also required soul searching about what types of society African government's wanted to build. These visions would have to be supported by an organisational framework that allowed governments to connect with the private sector and for African companies to connect with one another, as well as policies that bolstered not only skills but also the capability of individuals and companies. For South African manufacturers to align themselves with the opportunity, a different mentality would also be required from the one that currently prevailed, Barnes argued. "We cannot repeat a colonising model, which is my experience of South Africans, who just want to trade in Africa. "We have to think about how South Africa actually operates as an African economy and work towards regional value chains." Creating what he called "deep collaboration" would necessarily involve providing access to the South African market for other African companies. "It's not about being nice to one another, because that is what is actually needed to escape the confines of a very small market an...