By Siyabonga Mkhwanazi
Trade and Industry Minister Ebrahim Patel says while the country prepares for the next round of investments worth billions of rands, load shedding could impact on projects.
Patel said this week the government was targeting investments of R2 trillion in the next five years.
President Cyril Ramaphosa had announced in the State of the Nation Address that they have reached a target of R1.2 trillion of investments between 2018 and last year.
However, they want more investments to come in to be able to revive the economy.
Patel said they were expecting 1 300 people to attend the investment conference in Johannesburg on April 13.
He said there were 230 investments that were made in the last conference.
He said 83 of the projects have been completed.
There were 77 other projects that were still under construction, and there were also 28 projects that were in the early stages of preparation.
Patel added that 26 projects were progressing slowly.
But in spite of the efforts made to get the economy on a sound footing, load shedding continues to cause disruption.
“The energy crisis impacts on investments in a number of ways. First, there are large investments, which are energy intensive, where the investors are cautious because they need to see that we are able to get the investment requirements in place. Infrastructure is key and energy is key. We have seen when companies have done their feasibility studies they have carefully evaluated the likelihood of government achieving the targets that have been set. Of course, in a number of cases the investment commitment will require construction and the putting up of plant, bringing in machines and so on,” said Patel.
“They are anticipating that we will be able, over the next two to three years, to resolve the energy crisis. As we show more success in bringing renewable energy plants on stream and improving the efficiency of the coal-fired power stations, we are going to see that there is more robustness with which the investors implement the commitments they make,” he said.
He added that load shedding has provided another opportunity for investments in the energy sector.
Some of the companies are already investing in power plants that would be connected to the grid to ease the electricity crisis.
Patel said some of those projects are in the stages of completion.
Once there were more players in the energy sector, there would be a dramatic drop in power outages, and this would kick-start the economy, he said.
“The third part of the energy crisis has made investors look at energy efficient technologies and how to tool their plants such that they take into account the constraints on energy, to the extent that we are able to address our energy challenge rapidly.
“The energy crisis is not a good story for investment at all. It is something that does hurt the timing of investment. In a number of cases I have engaged with large investors that are putting significant sums of money in the South Africa economy and invariably the issue of energy comes up most. Most of them are quite bullish,” said Patel.
He added that these investors had had their teams putting their heads together on the likely energy supply in the country.
Patel said while they want the energy crisis to be resolved quickly, the investors were aware that the government was working around the clock to resolve it.
There was no doubt that the country will come up with solutions to this challenge, he said.
siyabonga.mkhwanazi@inl.co.za
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