Johannesburg’s municipality intends to buy 500 megawatts of electricity from independent producers to help avert ongoing power outages in South Africa’s biggest city.
A request for proposals is awaiting approval from the National Treasury and should be issued within weeks, Mpho Phalatse, Johannesburg’s mayor, said in an interview at Bloomberg’s Johannesburg offices on Monday.
“We will invite private companies to bid to work with the government. The kind of deals we want to put together should ensure that our revenue is protected and that the energy supply is stabilized Mpho Phalatse, Johannesburg’s mayor.
Eskom Holdings SOC Ltd., the state utility that generates most of South Africa’s electricity, has subjected the country to rolling blackouts since 2008 because its mostly old and poorly maintained plants have been unable to meet demand. The national government recently gave municipalities permission to generate their own energy or buy it in from other sources, with Cape Town having already announced plans to issue contracts to privately owned plants.
Jo’burg is considering a range of options to bolster its supply, including entering into long-term generation partnerships with private companies and charging them a fee to access the city’s grid to enable them to transmit and sell the electricity they produce.
“You are looking at 20 to 25 years because the private sector partners need to make back their money,” Mpho Phalatse.
It will cost about 300 billion rands ($18.3 billion) to address Johannesburg’s infrastructure backlog, with some 26 billion rands needed to stabilize the energy supply, according to the mayor.