How DBSA strives to improve energy development in South Africa

Global electricity consumption has dramatically increased in the past few decades, with even a higher demand due to the rapid growth in the population. And, according to Statista, energy consumption is projected to increase even higher in the coming years. The report explains that the distribution of electricity is disproportionately high in some countries. 

Insufficient energy supply in South Africa

The energy supply in South Africa indicates that South Africa is one of these insufficient countries. We have been facing an ongoing power supply crisis since 2007, where the national power grid started being under constant strain. To ease this strain, the national power utility has had to begin rolling out load-shedding, a period of power shut down over different parts of the distribution region to avoid excessive load on the generating plant. 

This has been an interim solution, which continued to be implemented for over 10 years. The challenges in the energy sector have a domino effect on other sectors, such as the agricultural, construction, transport, commercial sector and more. 

Put simply, not only are ordinary citizens affected but also businesses which play a role in the economic activity of the country. 

Sustainable solutions

South Africa’s ongoing power supply crisis halts economic development and growth. Before we face more adverse consequences, we need to come up with urgent, long-term and sustainable modern energy solutions. 

That’s where infrastructure development and renewable energy come in. 

  • Infrastructure development

Production and distribution of power get disrupted when gas and oil pipelines, electricity transmission lines, coal trains and other types of energy infrastructure are not working sufficiently. So, investing in energy infrastructure development is critical in ensuring bottle-neck free operations. 

The Development Bank of Southern Africa (DBSA) employs a proactive approach in procuring funds for infrastructure development projects in the energy sectors in South Africa, including for generation, transmission and distribution. 

For example, the Bank recently released an investment to the Mitochondria energy company, a local business which was established with the purpose to provide affordable, reliable and sustainable energy services. The project aims to strengthen the energy sector in South Africa by providing a locally-produced fuel cell technology.

  • Renewable or clean energy

Presently, the commonly used energy sources in South Africa include coal, oil, gas, nuclear power, hydropower, and renewable sources such as wind, solar, biomass and wave power. However, some of these energy sources pose an environmental risk and contribute to climate change and global warming. It is because of this reason that DBSA formed a partnership with the Green Climate Fund (GCF) to invest and implement renewable energy programmes. 

These are specifically cost-effective programmes which aim to offer support to clean energy projects, with a targeted capacity of 330 MW in solar and wind-generated power. 

The Bank’s Group Executive for Project Preparation Mohale Rakgate, DBSA was excited to partner with the GCF on yet another ground-breaking climate finance initiative that enables the private sector to develop clean energy. “This will further enhance South Africa’s transition to a more sustainable, low-carbon economy,” he added.

Final thoughts

A clean energy transition has become a top priority to combat global energy challenges. However, South Africa’s renewable energy policies and strategies fall short on sustainability. The energy demands require innovative solutions that also consider the environment. 

DBSA’s work in the energy sector helps strengthen the private sector’s role in driving clean energy solutions to provide renewable power at the same time reducing greenhouse gases, which are detrimental to the environment.