Radebe has big ambitions for energy investment
Energy Minister Jeff Radebe wants at least a quarter - or $25bn - of the $100bn target for investment set by President Cyril Ramaphosa to come from the energy sector.
Ramaphosa set the investment target recently ahead of leading an investment roadshow to the UK. Special envoys have been appointed to spearhead the investment drive.
Radebe noted on Wednesday at a media briefing ahead of his budget vote speech in Parliament that between 2014 and 2016 $10‚9bn was invested in the renewable energy independent producer programme‚ more than any other African country‚ but this was not included in his $25bn investment target.
A further R56-billion will be invested over the next few years as a result of the recent signature of 27 independent power producer projects. Radebe said this R56-billion formed part of the $25bn the Department of Energy was aiming to achieve.
"We want to be ambitious"‚ Radebe said about the $25bn target.
Helping achieve it would be the new bid windows for the independent power producer programme; investment in fuel tanks and infrastructure required for South Africa to become a major shale gas producer; promoting natural gas by designing and building of infrastructure required to transport natural gas and liquified natural gas; and investment in improving refinery assets to meet higher global emission standards.
Radebe said he would be consulting with major players in the petroleum sector about a new refinery and wanted to finalise the way forward by September this year.
"Refinery is a significant contributor to the economy and the issue of the sustainability of the current refineries is of utmost concern‚" the minister said.
"The refining sector is facing major challenges which include the provision of cleaner fuels‚ adhering to minimum emission standards and meeting the bunker fuel oil sulphur cape of 2020.
"Our refineries are not equipped to produce the latest fuels required by modern vehicle engines to reduce vehicle emissions and improve efficiency."
Radebe said the gas finds in the Rovuma basin in Mozambique provided an opportunity for South Africa and the Southern African Development Community region to benefit from gas resources.
"We are firmly of the view that together with our Mozambican counterpart we need to develop an infrastructure programme which will allow the gas to be beneficiated through projects such as a gas to liquids plant and other petrochemical facilities in Mozambique as well as a pipeline from Rovuma to the south of Mozambique.”
Radebe said this would enable the construction of gas to power projects in both countries.
He said he would be meeting with his Mozambican counterpart to seek further collaboration.
Officials of the two countries will meet before the end of May to prepare a roadmap for a joint programme.
He stressed that natural gas‚ whether imported via regional pipelines or liquified natural gas terminals at strategic port locations‚ should be prioritised as it could play an important role in South Africa’s transition to a low-carbon economy.
"This direction will establish a game changing demand platform for the future exploration and utilisation of South Africa's latent shale gas resources‚" the minister said.