The South African Minister of Energy, Kgosientsho Ramokgopa, presented the outline of a revamped universal access strategy that employs a mixed financing approach to electrify, by 2030, over 1.6 million households in South Africa that still lack electricity access.
In a speech delivered in Parliament, Ramokgopa stated that the new model will go beyond the traditional grid-centered approach, which has dominated South Africa’s electrification program for several decades, to include off-grid and microgrid technologies.
Although 8.4 million homes were electrified under the previous model—raising electrification levels from 36% in 1994 to 94% in 2024—the pace has slowed in recent years, and the minister emphasized that a renewed effort is necessary.
The idea is to use various technological solutions to address the long-standing delays in electrification, particularly in Limpopo, Eastern Cape, and KwaZulu-Natal provinces, especially in informal settlements, peri-urban areas, and rural towns.
The new “comprehensive universal access strategy” resulted from a review led by the Department of Electricity and Energy and will adopt a “coordinated and technology-neutral framework that accelerates access, integrates on- and off-grid solutions, and institutionalizes implementation partnerships across all three levels of government,” the minister declared.
The new model will involve three fundamental reforms: consolidating all access programs into a single hybrid planning and financing framework; addressing overloaded or insufficient-capacity grids to facilitate load growth; and integrating off-grid and microgrid solutions, especially in rural areas and informal settlements.
“The universal access strategy redefines electrification as a rights-based development obligation, rather than a legacy infrastructure backlog,” he said. Additionally, the financing model will be adapted to reflect the reality that “the scale of the challenge far exceeds the available budget,” Ramokgopa added.
Innovation in Subsidy Model and Investment Attraction
As part of the strategy, the government proposed redirecting the subsidy from the Integrated National Electrification Programme (INEP) toward a universal access grant, as well as supporting the creation of a new mixed financing mechanism in collaboration with the National Treasury and development finance institutions.
A total of 13 billion rand (731 million dollars) has been allocated to INEP for the next three years. Although this amount has traditionally been transferred to the state energy company Eskom and municipalities to support electrification projects, Kgosientsho Ramokgopa indicated that funds could in the future be used as a risk mitigation tool to attract financing for development and concessions, as well as private investment.
“By using public funds to reduce the risk of private investments, we are creating an infrastructure financing mechanism that will allow us to frontload the capital needed to accelerate implementation,” the minister agreed.
The goal is to mobilize financing, including debt, required to accelerate electrification implementation in high-priority provinces and municipalities while simultaneously creating a predictable and attractive project pipeline for institutional investors.
“This approach positions universal access as a profitable development investment, with measurable returns in health, education, and economic participation,” the minister said.
To ensure affordability, meanwhile, the department reviewed electricity pricing policy with the aim of creating a differentiated pricing structure “that protects vulnerable households while supporting large energy consumers with internationally competitive tariffs for electricity-intensive exports and locally beneficiated industries,” he agreed.
Source: Engineering News
