South Africa envisions new entity to generate electricity and rival Eskom

South Africa should establish a new entity that would generate electricity and reduce the nation’s reliance on state utility Eskom, Mineral Resources and Energy Minister Gwede Mantashe said.

The venture should ideally be a partnership between the government and private investors, and use a range of technologies, including gas, solar power and clean coal, Mantashe told reporters at the Investing in Africa Mining Indaba conference in Cape Town on Monday. The idea of establishing another power producer was based on a model used in the Netherlands, and should increase competition and help drive down energy prices, he said.

Cash-strapped Eskom currently generates about 95% of the power used in Africa’s most-industrialized economy, but has been forced to implement rolling blackouts because its old and poorly maintained plants can’t keep pace with demand. The utility also buys power from independent producers of green energy.

Industry should be able “to buy power from other sources,” Mantashe said. “We want to take the pressure out of Eskom.”

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