Finance minister Malusi Gigaba met with representatives of the World Bank last week to discuss financing for development of a nuclear power programme in the country, according to two people familiar with the meeting.
Gigaba met with the bank on Friday to discuss funding options available to state-owned power utility Eskom for the programme, said the people, who asked not to be identified because the information is not public. South African Airways, the national airline that is struggling to meet debt obligations, was also discussed at the meeting, said one of the people.
Eskom last year began a process to add 9.6GW of nuclear power capacity beyond its single existing plant by issuing a request for information from vendors. There were 38 responses to the notice, Kelvin Kemm, chairman of the South African Nuclear Energy Corporation, told lawmakers in Cape Town on Tuesday.
South Africa’s nuclear investment plans have become a focal point for critics of President Jacob Zuma’s policies. The affordability of the programme was a key point of dispute between Zuma and former finance minister Pravin Gordhan and the procurement process stalled in April after a provincial court ruled that the government didn’t follow the correct procedure in pursuing the nuclear programme.
Gigaba declined to comment on Tuesday when asked about the meeting. The World Bank didn’t immediately respond to questions sent by e-mail but confirmed receipt.
Gigaba said on 26 October that South Africa can’t afford to build new reactors for at least five years and that it doesn’t need more baseload, or continuous, power capacity. Nuclear still remains a part of the energy plan and the government will look at it as an option when needed and when it can afford it, he said.
Procurement process
Energy minister David Mahlobo, who was appointed last month, said on 23 October that a legal procurement process would be followed for a nuclear programme, noting the Western Cape high court decision.
The World Bank has previously supported energy projects through Eskom. However, an inspection panel from the organisation in 2012 found instances of non-compliance in its award of a US$3.75bn loan to the utility for construction of the Medupi coal-fired power plant. The impacts and risks for other local water users weren’t properly considered and the project would place strain on water resources in an area already suffering from scarcity, it said at the time.
The discussions between Gigaba and the World Bank also included options to assist South African Airways, according to one of the people. — Reported by Loni Prinsloo and Paul Burkhardt, with assistance from Arabile Gumede, (c) 2017 Bloomberg LP