Over R50 billion will be required for investment in new power stations in South Africa over the next 10 years to meet rising demand, according to public enterprises department director Sivi Gounden. The need for investment is approaching ‘crunch time’ according to Mr Gounden, and is one of the key factors behind the the government’s intention of introducing competition into the generation side of the business. A first step will be the establishment of a multimarket model to trade electricity.

Another key factor will be the partial dismantling of Eskom, which generates most of South Africa’s power. This situation will change during the next few years as the sale of Eskom generation facilities proceeds. By 2007, 30 per cent of its power stations will have been sold off to private equity partners, according to the plan, starting with the sale of an initial 10 per cent in 2003.

The need for new capacity is to be met largely by the private sector, via independent power producers, two of which have already been licensed by the National Electricity Regulator.