Speech by Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, on the occasion of the Budget Vote 10 Address to the National Council of Provinces
Honourable Chairperson of the NCOP
Honourable Members
Premiers and Members of Executive Councils
Leaders of Provincial Legislatures
Fellow South Africans
Chairperson, we meet today at a critical juncture in our democratic journey. The establishment of the Department of Electricity and Energy was not merely an institutional adjustment. It was a deliberate response to the urgent need for delivery, policy coordination and effective execution in the face of South Africa’s most severe energy crisis since 1994.
Over the past year, guided by the Energy Action Plan and supported by our partners across the public and private sectors, we have begun to reverse the tide. The days of relentless and prolonged loadshedding are no longer the norm. Unplanned outages have been reduced. Energy availability has improved. And for the first time in many years, there is renewed confidence that the system is turning around.
But this progress is not self-sustaining. It requires vigilance, discipline and a shared commitment to delivery. It is for this reason that this Budget Vote speaks not only to national priorities, but to the practical realities faced in every province, every municipality and every household. It is in the towns, townships and villages across the nine provinces that the success of our work will ultimately be measured.
This shared commitment must now be tested in real terms. Our people are not interested in slogans or spreadsheets. They want to know whether the lights will stay on, whether their businesses can operate without disruption, and whether the promises made in this House translate into real change on the ground. That is why we begin with the performance of Eskom’s generation fleet, because it remains the single most important indicator of whether the system is indeed turning the corner.
Eskom’s generation fleet continues to sustain improvements in performance. The energy availability factor (EAF) had reached 60.60% by March 2025 which was significantly higher than the same period in the previous year (March 2024: 54.56%). The higher EAF was attributed to a significant decrease in unplanned losses (UCLF) reaching 26.06% in March 2025 compared to 32% in March 2024.
Eskom continues to implement the Generation Operation Recovery Plan to recover capacity that had been lost due to breakdowns and suboptimal performance of the generation fleet. Six poor performing plants — Tutuka, Majuba, Kusile, Kendal, Matla and Duvha — had been prioritised for capacity recovery over a two-year period. Thus far, 4955 MW has been recovered from the targeted 6000 MW.
The power system remains stable, supported by adequate emergency reserves that are strategically deployed when necessary to manage periods of high demand. The system demonstrated resilience as some parts of the country were hit by cold fronts in recent weeks.
In addition to its operational gains, for the first time in several years, Eskom has posted a mid-year projected profit for the current financial year, signalling early signs of operational and financial recovery. This improvement has been attributed to a combination of stabilised plant performance, enhanced revenue collection, cost containment measures, and improved energy availability, which collectively reduced reliance on expensive diesel-fuelled generation.
While the profit remains modest and subject to year-end adjustments, it marks a notable departure from the persistent deficits of prior years and suggests that structural reforms and disciplined oversight are beginning to yield measurable results. This momentum must now be sustained through continued efficiency gains, and targeted investments in generation, distribution and transmission.
Chairperson, the integration of new generation capacity, especially from renewable sources, is fundamentally dependent on the strength and reach of our transmission network. Provinces such as the Northern Cape, Western Cape and Eastern Cape have become hubs for wind and solar generation, yet the full economic and developmental potential of these projects is being constrained by limited grid capacity and aging infrastructure.
To respond to this, the Department has initiated a comprehensive programme to modernise and expand the national grid. Anchored by the Transmission Development Plan, which outlines over 14,000 kilometres of new lines to be developed by 2032, we have introduced new regulations to facilitate the entry of private capital into grid infrastructure through the Independent Transmission Projects Procurement Programme. These reforms are designed to unlock investment while retaining state oversight and ownership of the grid, enabling an exponential expansion of the network.
In parallel, the Department is working with Eskom and the National Transmission Company of South Africa to prioritise the strengthening of corridors with high renewable generation potential. This includes the strategic build-out of transmission infrastructure in areas such as the Upington corridor in the Northern Cape and the Tsitsikamma region in the Eastern Cape.
Through these interventions, we are not only supporting generation diversification and energy security but also laying the groundwork for industrial development in provinces that have historically been marginalised from the core energy economy. This is how we connect clean energy potential to economic opportunity, ensuring that the transition is not only green, but inclusive and regionally balanced.
At the heart of our programme is a renewed push to achieve universal energy access by 2030. We are painfully aware that more than 1.6 million households, many of them in informal settlements, rural villages and rapidly growing urban edges still experience energy poverty. We are equally aware that for many poor households, connection alone is not enough. Electricity must also be affordable, reliable and safe.
To address this, the Department has launched a Universal Access Strategy that moves beyond a grid-only approach. We are integrating micro/off grid technologies, repurposing the current Integrated National Electrification Programme grant system, and working closely with provinces and municipalities, including organised local government, through SALGA to unblock planning and execution capability constraints. In provinces such as Limpopo, Eastern Cape and KwaZulu-Natal, where the backlog is most acute, these interventions will be scaled up with urgency.
Over the Medium-Term Expenditure Framework (MTEF) period, just over R13 billion has been allocated to the Integrated National Electrification Programme. This allocation represents a vital baseline for a repurposing of the Grant, and commitment to eradicating energy poverty and achieving universal access by 2030. However, the scale of the challenge exceeds the current fiscal envelope.
To address this, the Department is pursuing a blended financing model that leverages the R13 billion as a de-risking instrument to crowd in developmental capital and concessional finance. Working in close partnership with Development Finance Institutions and National Treasury, the Department is developing an infrastructure finance facility that will enable the front-loading of capital requirements through debt market instruments. The aim is to mobilise off-balance sheet financing while preserving affordability and fiscal discipline.
By using the public allocation as an anchor, the strategy allows for accelerated electrification roll-out in high-priority provinces and municipalities, greater geographic equity and a predictable project pipeline that is attractive to institutional investors. This approach positions universal access as a bankable development investment with measurable returns in health, education and economic participation.
Eskom's ability to collect revenue for the services provided continues to decline, as indicated in the municipal arrear debt growth, with the cumulative municipal debt now standing at just under R100 billion, having grown at around R3 billion a quarter over the past year.
The Distribution Agency Agreement (DAA) is being put in place to realise benefits for the sustainability of the entire distribution industry. The DAA entails assisting municipalities with their reticulation and distribution of electricity business; revenue collection and retail services. The DAAs have the dual potential to support municipalities to provide sustainable local services whilst also contributing to the sustainability of Eskom, through enhanced revenue collection.
Some of the benefits realised at municipalities where these agreements have been put in place include:
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Municipality payment levels increasing from 10% to 30% after meter audits and replacements
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Municipalities being assisted to resolve payment disputes with their customers
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Municipalities settling their current accounts with Eskom in full
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Improved turnaround time for restoration and fault response, leading to improved customer service
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Skills development and training across all areas of the utility, resulting in improved financial and technical sustainability
Honourable Members, South Africa faces a looming gas shortage, with significant implications for industrial provinces such as Gauteng and KwaZulu-Natal. In response, the Department is finalising the Gas Master Plan, which will serve as the long-term policy and investment framework for the sector. The Plan outlines the strategic actions required to secure new sources of gas supply, expand import capacity and enable infrastructure development across the gas value chain.
As part of its immediate response, the Department has initiated work to secure new Liquefied Natural Gas (LNG) supply contracts. It is also supporting the development of import terminals and regasification infrastructure at Richards Bay, in collaboration with relevant sector departments.
Gas plays a critical role not only in power generation, where it provides flexible dispatchable capacity to support grid stability, but also in key downstream sectors. It is essential for the production of fertilisers, chemicals and other industrial inputs, and serves as a foundational element in the development of South Africa’s green hydrogen economy. Securing adequate, affordable and sustainable gas supply is therefore not just an energy imperative, but a strategic economic necessity.
South Africa’s nuclear programme is undergoing a strategic repositioning, not only to maintain base load supply, but to catalyse high-value industrial development. In July 2024, the National Nuclear Regulator granted a 20-year licence extension for Koeberg Unit 1, with Unit 2 expected to follow this year. These decisions affirm the robustness of our regulatory systems and the continued relevance of nuclear energy in our long-term energy mix.
The R1.2 billion investment in the Multi-Purpose Research Reactor at Pelindaba will extend and expand our capability in nuclear fuel cycle research, isotope production, advanced materials development and high-precision manufacturing. Through this, South Africa can re-establish its global leadership in medical radioisotopes, support industrial users with secure supplies, and create skilled employment across multiple provinces.
We are also moving ahead with localisation of the nuclear fuel cycle, including uranium beneficiation and local fabrication of fuel components. This approach ensures that the economic value of nuclear investment is retained within our borders and contributes directly to domestic economic growth.
We are clear that energy investment must become a vehicle for industrialisation, employment and economic inclusion. That is why the Department, working in close partnership with the Department of Trade, Industry and Competition, has finalised the localisation framework under the South African Renewable Energy Masterplan, and is now gearing for implementation of the SAREM implementation plan.
This policy will require Independent Power Producers, Original Equipment Manufacturers and financiers to embed local economic participation in every project.
We are moving toward a procurement model that demands the use of local manufacturing, domestic logistics, local supplier networks and community-based contractors. Future bid windows will include stricter economic development obligations, with measurable targets for skills development, job creation and enterprise support.
To support youth access, the PowerUp Platform, implemented in partnership with SANEDI, is being expanded to every province. This digital ecosystem links young South Africans to training, apprenticeships and work placements across the green economy value chain. It is a practical intervention that brings the energy transition into the lives of real people, especially in communities located near energy infrastructure investments.
Transformation is not a rhetorical commitment. It is a structural imperative. We must ensure that the green economy does not replicate the patterns of exclusion that have characterised past industrial transitions. We are determined that women, youth and workers from historically marginalised communities must be active participants and not passive observers in this new energy economy.
Honourable Members, as the Department of Electricity and Energy finds its footing, we are also laying the foundation for sound governance, institutional integrity and delivery excellence. We are also sharpening oversight over public entities, with SANEDI, NERSA and the National Nuclear Regulator each playing critical roles in planning, licensing and safety assurance.
As Chair of the G20 in 2025, South Africa is placing Africa’s energy agenda at the centre of global discussions. Through the Energy Transitions Working Group, we are advocating for just and equitable financing, investment in grid and gas infrastructure, and support for African-led clean energy manufacturing.
Our message is clear: Africa does not lack ambition or opportunity. It needs partners who understand our context and are willing to invest in long-term, sustainable energy futures.
Chairperson, energy reform must also be demographic reform. For too long, the energy sector has remained structurally exclusionary, both in its ownership patterns and in access to opportunity.
The Department has therefore committed to a deliberate and measurable transformation agenda that prioritises the participation of women, youth and historically marginalised communities.
This is not a peripheral issue. It is about shifting the centre of gravity of the energy economy. If the transition excludes women and the youth, then it is neither just nor sustainable. The work of transforming the energy system must be inseparable from the work of transforming society itself.
That is the measure of a people's transition — one that is inclusive not only in rhetoric, but in active participation, structural ownership and tangible outcomes that change the lived reality of marginalised communities for the better, overwhelmingly so.
Chairperson, Honourable Members, this Budget reflects not only a commitment to stabilise the present, but to transform the future. It affirms that energy is not just about infrastructure or megawatts, but about dignity, equity and the ability of our people to live full and productive lives. The Department of Electricity and Energy stands ready to work with provinces, municipalities, communities and partners to drive forward a just, affordable and inclusive energy future.
This is therefore not a speech about what might be. It is a statement of what must be done, and what we will do, together, across all provinces and spheres of government. From clinics in Mopani to schools in Khayelitsha, from factories in Gqeberha to farms in Upington, the future we build must be one of energy for all, anchored in justice, driven by equity and sustained through delivery.
In the words of Former President Thabo Mbeki:
“We must ensure that the African Renaissance is not a dream deferred, but a reality constructed through conscious action and deliberate choice.”
I thank you.
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