Nene’s plans for more rands

2015-02-26 00:00

THE economy will only grow faster if progress is made to address the electricity challenges, Finance Minister Nhlanhla Nene said yesterday.

“Electricity constraints hold back growth in manufacturing and mining and also hold back investment in housing, and raise costs for housing and households,” he said as he proposed a number of measures in the Budget to promote energy efficiency.

Economists have warned that the negative impact of load shedding over the past few months has not yet ­reflected in economic data, but will do so in coming months.

The measures outlined by Nene yesterday include:

• Increasing the electricity levy from 3,5c/kWh to 5,5c/kWh to assist in demand management until “when the electricity shortage is over”.

• More than doubling the energy-efficiency savings incentive from 45c/kWh to 95c/kWh, together with its extension to co-generation projects.

• Enhancing the depreciation for solar photovoltaic renewable energy.

• Announcing a carbon tax from 2016, which would lower the electricity levy — the draft carbon tax bill is expected later this year.

• Promised steps to ensure that the electricity levy applied to all users.

• The first of three allocations of a R23 billion capital injection for Eskom in June.

• Considering an equity conversion of the government’s subordinated loan to Eskom if Eskom indicates it needs more money.

• Over the next two years expanding renewable energy projects by 33% of the loan portfolios of SAs key development finance institutions, such as the Industrial Development Corporation and Development Bank of Southern Africa.

• Extending the Independent Power Producer Programme to include new generation capacity from hydro, coal and gas sources to supplement ­Eskom’s base load capacity.

• Allocating R108 million over the medium term for research and ­regulatory requirements for shale gas exploration.

• R2,7 billion was allocated for the Mineral Policy and Promotion programme to promote investment in mining and petroleum beneficiation.

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