Resource Mobilisation Fund ‘not an open-ended’ treasure trove for govt
The Resource Mobilisation Fund (RMF) – a private sector initiative to support government in dealing with the energy crisis – was launched on Thursday, and the first key message from organised business backing the venture is that the fund will not be used by government as a bottomless treasure trove.
The RMF, which was established in response to President Cyril Ramaphosa’s call for business to assist in capacitating the Presidency’s National Energy Crisis Committee (Necom), will be responsible for the sourcing of critical resources, as well as donating capacity to the government, particularly Necom, to help fast-track the resolution to the energy crisis.
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Having raised its initial budget of about R100 million over the past four months, the fund has already begun its work.
According to the RMF, it is set to conclude the necessary due diligence on these funds soon and begin disbursing funds to the government in the next month.
Cas Coovadia, Business Unity South Africa (Busa) CEO and a director on the board of the RMF, says although business is willing to support government in its efforts to resolve the country’s energy crisis, the resources procured by the fund must be used in line with the agreed-upon plans.
“Our commitment and the agreement we’ve reached to mobilise resources and donate expertise procured by the RMF to Necom is based on the fact that there is a viable, appropriate and relevant plan that was announced by the president, with clear deliverables that we can track,” he said.
“I don’t need to make it clear that it’s not just an open-ended raising of resources and provision of capacity without any plans, without any clear deliverables and without accountability,” added Coovadia.
Speaking in one of his first engagements since being appointed Minister of Electricity, Dr Kgosientsho Ramokgopa said government has opted to seek the assistance of the private sector in procuring resources because the state’s internal process can be lengthy and the fiscus cannot afford the kind of expertise needed.
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“We think that we can benefit immensely from this collaboration between the public and private sector, and given the urgency of the situation and the need for us to populate – if you like – the structures to enable us to meet the work that is associated with (finding) resolutions to load shedding,” he added.
“It’s going to take an inordinate amount of time firstly in government to recruit the kind of skills that we want because of a number of reasons … and that process can take up to a year to complete.”
Ramokgopa noted that the “fiscus is under significant strain” and said the additional resources (through the RMF) would help government better address the electricity crisis “without further burdening the fiscus”.
He said that as with the decision to establish the Solidarity Fund, which worked with the government to raise funds for the fight against the Covid-19 pandemic, the RMF will assist in resolving the “transitory issue” that is the energy crisis.
“We should commend the private sector for being patriotic. They’ve got an appreciation of the nature and the scale of the problem that is confronting us,” added Ramokgopa.
Apart from Coovadia, also sitting on the RMF board as a director and chairman is Martin Kingston – executive chair of Rothschild & Co South Africa and chair of Business for South Africa (B4SA).
Other directors include Faith Khanyile, former CEO of WDB Investment Holdings, and Phumzile Langeni, executive chair of Afropulse Limited.
The RMF has also approached Standard Bank independent non-executive director Lwazi Bam to join the fund’s leadership. Bam’s appointment to the board is dependent on approval from the Prudential Authority of the South African Reserve Bank.
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As it stands, RMF is designed to be of assistance to Necom for the next two years at most, “depending on the pace of progress that Necom makes in its mission,” Kingson said.
The RMF board will be in charge of all final procurement decisions, guided by the advice of the procurement advisory panel, which will include both public and private sector procurement experts. Following the procurement of expertise, the service providers will be contracted by the RMF and then offered to Necom as the required expertise.
“Certain operational functions of the RMF, including day-to-day procurement and reporting functions, have been outsourced to external service providers, although only the RMF board has the authority to make procurement and deployment decisions,” said Kingston.
“The RMF exists only to receive and raise donations, procure capacity and skillsets, donate these to Necom and then report back appropriately.
“Unlike the Energy Council and other bodies, the RMF does not undertake any policy advocacy and, other than its sole focus of capacitating government, is not involved in addressing the energy crisis,” he added.
Listen to Martin Kingston being interviewed by Jeremy Maggs on Moneyweb’s FixSA podcast (or read the transcript here):
You can also listen to this podcast on iono.fm here.