AFRICAN MINERALS & ENERGY FORUMAFRICAN MINERALS & ENERGY FORUM

BEE Opportunities in the Electricity BEE Opportunities in the Electricity IndustryIndustry

Parliamentary Parliamentary Portfolio Committee:Portfolio Committee:Minerals & EnergyMinerals & Energy

Prepared by: Prepared by: Cingembo Mqaqa &Cingembo Mqaqa &Mandla TshabalalaMandla Tshabalala

Objective of presentationObjective of presentation

To share areas of opportunities for BEE companies in Electricity

To appraise Portfolio Committee of Minerals and Energy on some current developments in the ESI

Introduce AMEF as an entity that will promote and ensure operational empowerment of Black owned businesses in the ESI

Background on Govt’s BEE intentBackground on Govt’s BEE intent

Restructure SOEs to create shareholder value

Promoting main stream BEE involvement and securing significant BEE operational equity

Relevant Govt documents RDP GEAR Strategy White Paper on Energy Policy Status of the nation address: 2001 BEE Commission

Scope of presentationScope of presentation

Customer operations

Customer operations

Customer operations

Customer operations

Customer operations

Customer operations

Customer operations

Customers

Trans-ElecTrans-Elec

IPPIPP IPP IPP“Contestable”

Customers

“ Contestable”Customers

PoolSystem Ops

6 RED6 RED6 RED

Dx

KWhR

Retailer

Eskom Gx

EskomGxTxDx

ScopeScope of presentation of presentation

Electricity Generation

Electricity Transmission

Electricity Distribution

Related non-core business

Electricity GenerationElectricity Generation Government Intent

Restructuring of Eskom Grouping of generation plants into clusters Promoting new privately-owned IPP investments

Areas of interest & expertise: Power plant management Power plant operations and refurbishment Research and Development (renewables)

BEE Opportunities: Equity in main stream Eskom generation Simunye cluster not viable pending details studies Equity in new IPPs (e.g. Cape Power Project, PBMR) Equity in renewable generators (e.g Wind & Solar thermal) Participation in energy Market Place Management contracts for:

– Power plant management– Power plant operations and refurbishment– Research and Development (renewables)

Electricity TransmissionElectricity Transmission Government Intent

Open Access in electricity transmission to uncommitted capacity

Maintain as natural monopoly

Areas of interest & expertise: Electrity trading Systems operation Pool operation

BEE Opportunities: Equity in Systems operation Equity in Pool operation Equity in Transmission Company

Electricity DistributionElectricity Distribution Government Intent

Restructure Eskom into separate entities Amalgamate Municipality with Eskom Dx Form 6 REDs

Areas of interest & expertise: Metering & Billing Client service / call centre Vendor Maintainance and operation

BEE Opportunities: Transfer of ownership of Eskom brands

Agrelek, Elektroserve, Elektrowise, Industrelek, Utilimark Participation in REDs Equity in future REDs

Related non-core businessRelated non-core business Objective

Adding value to ESI

Areas of interest: Maintanance and refurbishment Electrification Non-utility generation

BEE Opportunities: Demand Side Management Energy efficiency in government buildings Equity in renewable energy companies Equity in Eskom Enterprise Change management and communication

BEE Current Status UpdateBEE Current Status Update

Opportunities

Generation

Transmission

Distribution

Non-core

No

No

No

>5%

BEE PARTICIPATION

Operational Equity

>1%

No

No

minimum

Some current market perceptions BEE only around for 2 more years There are no BEE energy companies/ skills BEE cannot deliver any way

BEE PositionBEE Position

Opportunities

Generation

Transmission

Distribution

Non-core

40%

50%

50%

70%

BEE PARTICIPATION

Operational Equity

30%

30%

30%

50%

Suggested financial and institutional support Creation Energy Empowerment Fund NER enforcing BEE participation at all levels Business linkages between BEEs and FDI

ESI TrendsESI Trends

0

10

20

30

40

50

60

70

80

90

100

2000 2002 2004 2006 2008 2010 2012 2014 2016

% o

f F

ina

l Pri

va

te P

art

icip

ati

on

pe

r E

SI s

ec

tor

Distribution

Transmission

Non-Core

Generation

African Minerals & Energy ForumAfrican Minerals & Energy Forum

Background

Established in 1998, AMEF is the private sector organisation for new black companies in the African minerals and energy business.

AMEF’s aim is to promote and protect the interest of members in areas ranging from equity participation to strategic and policy intervention as well as technical requirements and capacity building support

African Minerals & Energy ForumAfrican Minerals & Energy Forum

Objective To promote active participation of Black Business in the

Minerals and Energy sector To build capacity of AMEF members To create forums for networking To liaise with Government and Industry on behalf of members

Position Promote and protect BEE interests ranging from equity

participation to strategic position intervention

Support governmetn’s transformational needs of the SA economy

Act as vehicle through which government can achieve its short to long term empowerment goals

Promote best environmental practises and good governance in ESI/EDI

ReferencesReferences1. Presidency: 2001. State of the Nation Address: Cape Town. Government Communication and

Information Service

2. Ministry of Public Enterprises: 2000. An accelerated agenda towards the restructuring of State Owned Enterprises: Policy Framework: Pretoria: Government Printers.

3. EDIRC/PriceWaterCooper: 2000. Emerging views: Restructuring of the Electricity Distribution Industry: Johannesburg. EDIRC Secretariat

4. Department of Minerals and Energy: 1999 Annual Report: Pretoria: Chief Directorate, Communications.

5. Republic of South Africa: 1998. White Paper on Energy Policy for Republic of South Africa, Pretoria: Department of Minerals and Energy

6. Department of Finance: 1996. Growth, Employment and Redistribution: A Macroeconomic Strategy: Government Printers

7. Cheales, P: 1995. Look Out – A survival guide to the international business onslaught: William Waterman Publications

8. Ministry of Public Enterprises. 1995. Discussion document by Government of National Unity on the consultative and implemation framework for the restructuring of state assets. Pretoria: Government Printers