Budgets cut for electricity provision to poor households as funds diverted for Covid-19 relief

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Power lines feed electricity to the national grid from Koeberg Nuclear Power Station. (Photo by: Education Images/UIG via Getty Images)
Power lines feed electricity to the national grid from Koeberg Nuclear Power Station. (Photo by: Education Images/UIG via Getty Images)
  • The Integrated National Electrification Programme grant has been cut by R1.5 billion.
  • The move is expected to affect electricity connection to some 40 000 households. 
  • Over 8 million households have been connected to national grid through the INEP between 1994 and 2018. 


The department of mineral resources and energy has slashed the Integrated National Electrification Programme (INEP) grant by R1.5 billion due to budget cuts in a move expected to affect electricity connection to over 40 000 households, mainly in rural provinces. 

The grant is used to fund the provision of electricity to households by Eskom.

An amount of R3 billion was initially budgeted for the programme for the 2020/21 financial year. But the department told a Parliamentary committee on Tuesday that the bulk of the funds aimed to drive the provision of electricity to he poor were shifted to Covid-19 initiatives. 

"It is projected that the 2020/21 household connections target of 180 000, will decrease by 43 000 to 137 000 connections," the department's Chief Financial Officer Yvonne Chetty told lawmakers.

"The reduction will also have a significant negative impact on the Eastern Cape, Limpopo and Kwa-Zulu Natal, as these provinces have the largest electricity backlogs."

Lawmakers queried the rationale behind the cuts and wanted to know why the INEP was targeted for the cuts. Over 8 million households have been connected to national grid through the INEP between 1994 and 2018. Statistics South Africa’s General Household Survey in 2017 indicated that 84% of the population had electricity.

The INEP grant to municipalities was reduced by R500 million, from an initial allocation of R1.86 billion. The reductions are expected to delay the implementation of planned bulk infrastructure projects, which are critical for laying the foundation for household connections, as well as reduce the targeted electricity connections.

The department emphasised that funds were reprioritised  in order to implement the government’s Covid-19 fiscal response package.

Director General Thabo Mokoena said the INEP was not the only service delivery grant that had its budget slashed.

On 2 June 2020, the portfolio committee on mineral resources and energy adopted the department’s budget of R9.3 billion for the current financial year. The budget has now been revised to R7.8 billion.

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