A spin-off from the electricity crisis is it has forced many households and businesses to invest in renewable energy and this capacity is now double that of the strictly government-controlled formal renewable energy programme, which started in 2011.
In yesterday's Medium-Term Budget Policy Framework (MTBPF), Finance Minister Enoch Godongwana stated that rooftop solar capacity installed by homes and businesses amounted to 4.412MW, or "twice the capacity installed to date under the Renewable Energy Independent Power Producer Procurement Programme."
Over the next three years, he predicted, more than 11000 MW of electricity capacity from various renewable resources will be added, which would significantly reduce power outages.
The MTBPF yesterday included spending on renewable energy and a just energy transition in line with international efforts to combat climate change and decarbonise the economy.
Godongwana said over the next three years, the government would focus on raising economic growth by improving the provision of electricity and logistics, enhancing the delivery of infrastructure and restructuring the state to be more efficient and fit-for-purpose.
"Investment in infrastructure is central to promoting economic growth and job creation. Government seeks to shift the quantity and quality of delivery by significantly increasing the extent to which the private sector is involved in funding infrastructure and providing technical expertise," he said.
He said the government aimed to also widen the scope for concessional borrowing - that is, where interest rates were lower than average market rates - to fund essential infrastructure.
He said the framework for public-private partnerships had been reviewed and the 2024 Budget would outline amendments to Treasury Regulations and key elements of municipal legislation.
On the Just Energy Transition, Godongwana said the funding would be supported by international sources, to transition retiring coal plants, address regional energy transitions, promote new energy vehicles, support green hydrogen, develop skills and empower municipalities.
Measures to help the automotive industry transition to new energy vehicle production would be announced in the 2024 National Budget, he said.
Gross fixed-capital formation was expected to reach 6.2% this year, up from 4.8% in 2022, but still below pre-pandemic levels due to structural constraints, high interest rates, global demand moderation, and weak domestic demand.
And overall investment in the country was expected to decline to 3.6% in 2024 due to tough business conditions, sluggish global economic growth and elevated borrowing costs.
More positively, he said the construction sector grew by 4.2% in the first half of 2023 due to expansion in residential and non-residential buildings and construction works, and the sector was showing signs of recovery after contracting for six consecutive years, even though activity levels were below pre-pandemic levels.
“A sustained improvement in construction activity would require private and public sector projects to move from tender phase to adjudication and commencement,” National Treasury said in the MTBPF.
Urgent interventions were required in the urban water business in metropolitan municipalities and turnaround plans would be implemented in 2024, including the provision of technical assistance and financing through the urban settlements development grant.
Dr Andrew Golding, the CEO of the Pam Golding Property group, said the MTBPF’s focus on enabling the transition to more self-generation of electricity by firms and households was to be welcomed.
“A recent Pam Golding Properties Survey revealed the shift to ‘green’ homes is a trend that has been gaining momentum for a number of years, and is an important contributor in the transformation towards a more sustainable economy - further reinforced by the escalating cost of electricity,” he said.