AFRICAN MINERALS & ENERGY FORUM
BEE Opportunities in the Electricity
Industry
Parliamentary
Portfolio Committee:
Minerals & Energy
Prepared by:
Cingembo Mqaqa &
Mandla Tshabalala
Objective 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 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 presentation
Eskom Gx
“Contestable”
Customers
IPPIPP IPP IPP
Eskom
System Ops
Gx
Pool
Trans-Elec
Tx
Dx Dx
66RED
RED
6 RED
KWh
R
“ Contestable”
Customers
Retailer
Customer
Customer
Customer
Customer
Customer
Customer
Customer
Customers
operations
operations
operations
operations
operations
operations
operations
Scope of presentation
 Electricity Generation
 Electricity Transmission
 Electricity Distribution
 Related non-core business
Electricity 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 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 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 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 Update
Opportunities
BEE PARTICIPATION
Operational
Equity
Generation
No
>1%
Transmission
No
No
Distribution
No
No
>5%
minimum
Non-core
Some current market perceptions
 BEE only around for 2 more years
 There are no BEE energy companies/ skills
 BEE cannot deliver any way
BEE Position
Opportunities
BEE PARTICIPATION
Operational
Equity
Generation
40%
30%
Transmission
50%
30%
Distribution
50%
30%
Non-core
70%
50%
Suggested financial and institutional support
 Creation Energy Empowerment Fund
 NER enforcing BEE participation at all levels
 Business linkages between BEEs and FDI
ESI Trends
% of Final Private Participation
per ESI sector
100
90
80
70
60
Distribution
Transmission
Non-Core
Generation
50
40
30
20
10
0
2000
2002
2004
2006
2008
2010
2012
2014
2016
African 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 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


References
1.
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