Desperate for alternative energy sources

 

By Derrick Silimina

As South Africans adjust to living in darkness with no end in sight to power outages, many are desperate for alternative energy sources. 

Known locally as load shedding, widespread electricity blackouts are carried out multiple times a day by state-owned energy utility Eskom to avoid the total collapse of the grid. 

For some people, lack of reliable power supply can be the difference between life and death, as blackouts have become routine, affecting every part of South African society. 

“These power outages are bad for my fledgling business. I am just trying to grow so that I can take care of my family,” Bongani Malinga told ChinAfrica. 

Malinga, who runs a startup cleaning services company in Johannesburg, expressed concern that without constant power supply, it is difficult to use electric cleaning equipment.  

Nothando Simelani, another entrepreneur, said, “I run an ice-cream shop and whenever we experience chronic electricity outages, our products go bad, and that makes it hard to sustain this type of business.”  

Simelani believes that with the government’s quest to invest in renewable energy sources, many startup businesses won’t have to shut up shop. 

New funding source  

For this reason, one of the world’s most important groups, BRICS, is creating a new global multilateral architecture to deal with the global investment challenges. 

The BRICS countries have seen  their economic influence increase over the past decades as drivers of global growth, trade and investment. 

Arguably, BRICS is more than just an acronym. It is a combination of influential emerging market economies that are collaborating to restructure the global economic multilateral order to make it fairer, inclusive and equitable. 

According to the 2022 BRICS Investment Report released by the United Nations Conference on Trade and Development, the group, which represents 41 percent of the world’s population, is driving global growth in trade and investment in response to the need to utilize foreign investment for sustainable development. 

Since South Africa joined the group in 2010, its economy has grown substantially, especially in energy investment.  

“As BRICS nations, we have to do all within our means to mitigate the impact of poverty, food and energy insecurity among our people. We have to advance sustainable and inclusive development that safeguards us against future shocks. We want to promote mutual trade and investment, and implement structural reforms and other measures to improve the business environment,” South African President Cyril Ramaphosa said during the 2022 BRICS Business Forum. 

Part of South Africa’s response to the energy crisis involves implementing a just transition to a low carbon economy as climate change also poses considerable risks to jobs, businesses and the economy. Further, South Africa is among the most water-scarce countries in the world, and recent events in KwaZulu-Natal have shown that extreme weather events such as floods are occurring more often and with a devastating impact on infrastructure. 

A recent communique adopted by the BRICS Energy Ministers Meeting acknowledged the need to remove barriers and facilitate trade and investment in global energy markets.  

“We highly value intra-BRICS cooperation in the field of energy which plays a positive role in strengthening our energy security and promoting economic growth. We will continue to work to reinforce and deepen collaborative actions in the area in line with the agreed roadmap through strengthening BRICS Energy Research Cooperation Platform (ERCP) and other means and mechanisms as appropriate. We will strive to improve the conditions for investment in the energy sector, while paying special attention to project preparation and financing,” read part of the communique. 

Energy experts are of the view that ensuring access to affordable, reliable, sustainable and modern energy for all is crucial for social and economic development and lifting people from poverty as well as realizing the Sustainable Development Goals. 

High on the agenda of this year’s 15th BRICS Summit will be the transition to greener energies as South Africa hosts the event.  

The economic grouping is also looking to expand with countries like Saudi Arabia, Argentina and many others showing interest amid major shifts in the geopolitics, because any of the potential members will add weight to the group, which already consists of resource-rich nations and highly industrialized economies. 

As the global economic power is shifting from the traditional West towards the multifaceted BRICS group, this presents an opportune time for South Africa to rekindle its economic prowess. With this, it is prudent for South Africa to consider in real terms the geopolitical influence that can be harnessed based on its strategic position gained from the BRICS group.

Development projects  

Interestingly, the New Development Bank (NDB) - a multilateral development bank established in 2015 by the BRICS countries - is aimed at mobilizing resources for infrastructure and sustainable development projects in the BRICS countries. 

For instance, as the NDB has financed more than 80 investment projects worth $180 billion, this has opened up large trade markets for South Africa, where projects worth $30 billion have been approved for implementation. 

In this context, the Russian state energy company Rosatom recently signed an agreement with South Africa to construct small hydropower plants in Mpumalanga as a key component of South Africa’s energy security strategy in line with the BRICS roadmap for energy cooperation by 2025, which is aimed at building a strategic partnership as well as identifying the needs and challenges to energy security and finding areas where member cooperation can provide solutions. 

This is a huge boost considering that South Africa is in dire need of infrastructure upgrade projects to solve the problems of decaying infrastructure, and growing population and economic demand. 

Certainly, the NDB is the most viable solution for the lack of private sector investment on the African continent, making it a perfect option to raise resources and funding for the continent’s immediate needs. 

Over 17 percent of South Africa’s exports go to the BRICS countries, while 29 percent of its total imports come from BRICS, according to the South African government. 

South Africa has already received $5.4 billion from the NDB to improve service delivery in critical areas.  

“We are focused on improving the capacity and competitiveness of our economy, these trade linkages will prove vital to the growth of the local industry. There is therefore a direct relationship between, on the one hand, our reforms in energy, telecommunications and transport, our investment in infrastructure and our efforts to reduce red tape, and, on the other hand, the work underway to increase exports to our BRICS partners,” Ramaphosa recently stated.