Johannesburg – Black businesses in the energy sector have bemoaned what they call “unacceptably inadequate” participation in the industry, calling for a meaningful share in renewable power generation.
The call comes on the back of the government’s R56bn contract with 27 independent power producers (IPPs) to supply Eskom with renewable energy over the next 20 years.
“Despite the energy sector being a key contributor to the South African economy, black participation remains unacceptably inadequate,” said Black Energy Professionals Association (BEPA) chair Meta Mhlarhi at the launch of the organisation on Thursday evening.
‘Marginalised and not taken seriously’
Mhlarhi said black businesses in the energy sector are “still marginalised and not taken seriously, despite having the relevant experience.”
“One of the key structural inequalities that still exists is access to capital and land.
“That process alone has created an environment where black people can only participate as empowerment partners,” she lamented.
Renewable energy is part of the government’s energy mix which includes solar, wind and biomass projects, and will feed electricity to the national grid.
IPPs are expected contribute up to 30% of the country’s electricity production, with the rest coming from state power utility Eskom.
The projects, which will be located around the country, are expected to contribute a total of R9.8bn to socioeconomic development initiatives, and a further R3.39bn to enterprise development over their 20-year lifespan.
According to BEPA, the majority of companies involved in the renewable energy projects are foreign-owned, with what it refers to as “the usual suspects” in empowerment deals.
The newly-formed association brings together black industry energy professionals with the aim of providing policy perspective, transformation and empowerment in the sector.
During the signing of 27 outstanding IPP projects last week, Minister of Energy Jeff Radebe stated that a majority share of 57.8% in the companies that signed contracts would be held by South Africans, with the emphasis on black companies.
But while addressing the association on Thursday, Radebe conceded that the transformation of the sector goes beyond ownership issues.
“The economic structure of our country still does not reflect our demographics. The energy sector is no different,” he said.
“Therefore, there is a need for increased and greater participation in the economy by the previously marginalised.”