Cape Town – Expenditure of R234.5bn by the Department of Energy (DoE) in the next three years will be used mostly for increasing household access to electricity.
“The Department of Energy will focus on increasing household access to electricity over the medium term,” National Treasury revealed in its 2017 Budget Review.
Nearly 90% of this amount (R203.8bn), which accounts for about 25% of total public sector infrastructure spending, will go to Eskom.
“An additional R1bn has been allocated in 2019/20 to support the Integrated National Electrification Programme in financing grid and non-grid (standalone power system) connections, and to build and upgrade substations and electricity networks.
“The programme will fund an estimated 723 000 grid and 49 650 non-grid connections to households over the medium-term expenditure framework period through transfers to municipalities, Eskom and non-grid service providers.
“Transfers are expected to total R7.6bn for municipalities, R12bn for Eskom and R0.6bn for non-grid service providers between 2017/18 and 2019/20.”
The integrated national electrification programme grant received R19.6bn to speed up the electrification of poor households over the next three years, Treasury explained.
“The aim of this grant is to provide capital subsidies to municipalities to electrify poor households and fund bulk infrastructure to ensure the constant supply of electricity.
“Allocations to this grant are made based on the backlog of un-electrified households and administered by the DoE. The grant only funds bulk infrastructure that serves poor households.”
The national electrification programme has helped provide 91% of all poor households with access to electricity, as reported in the 2016 Community Survey, an increase from the 85% reported in the 2011 Census.
“To sustain this progress, government will spend R19.6bn on the programme over the next three years,” it said. “Of this, municipalities are allocated R7.6bn and Eskom is allocated R12bn to spend on behalf of municipalities through an indirect grant.
“The integrated national electrification programme (Eskom) grant allocation includes reductions of R30m in 2017/18, R33m in 2018/19 and R36.3m in 2019/20.
“The integrated national electrification programme (municipal) grant receives an additional allocation of R1bn in 2019/20 to further accelerate the rollout of electricity connections to all households.”
The Select Committee on Appropriations and the review of local government infrastructure grants recommended that allocations to metropolitan municipalities from the integrated national electrification programme (municipal) grant should be incorporated into the urban settlements development grant, it said.
“This will allow better planning and alignment between electrification projects and the delivery of other basic services funded through the urban settlements development grant,” said Treasury. “Discussions on the alignment of electrification and human settlements projects will continue in 2017, with the aim of shifting allocations for electrification from 2018/19.”
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