Midvaal Electricity PPP Project

In its strategic planning of 2013 Midvaal Local Municipality identified the sustainability of power supply as a key driver to enable economic development.

Introduction

In its strategic planning of 2013 Midvaal Local Municipality identified the sustainability of power supply as a key driver to enable economic development. Its SWOT analysis identified extensive technical, financial and human resources challenges with regards to the provision of electricity services, Midvaal Local Municipality (MLM) recognized the need to review and decide on the most suitable mechanism to provide electricity services as provided for in the Local Government Municipal Systems Act (MSA). The MLM Council resolved to undertake the feasibility study and consider inter alia a Public Private Partnership (PPP) process and applied to National Treasury (NT) for project development funding assistance which was granted. The Project was registered with National Treasury as a potential PPP.

Project Financing
Public
Project Size
Medium
E&S Risk category
Category 3
DBSA Involvement

The project could not progress to the procurement phase due to the lack of sufficient funds. MLM secured IIPSA grant funding of R20 million via the DBSA and undertook an open procurement process for the appointment of a new Transaction Advisory (TA) to undertake the review and update of the completed Feasibility Study and procurement phase for the electricity PPP project. PwC consortium was the preferred bidder and appointed as the new TA on the project. The DBSA, together with GTAC- National Treasury, Gauteng Provincial Treasury (GPT), MLM and PwC plays an active role as key members on the Project Steering Committee of the Project.   

Stats
4000

indigents provided with subsidised electricity.

Create

direct and indirect jobs, and allow for the transfer of skills and expertise.

Contribute

to increasing the implementation of projects in the IDP.

Reduce

public expenditure costs and improve service delivery.
 

100%
Sustainability impact

Currently the municipality experiences revenue losses (technical and non-technical losses) of R27 million per annum due to systematic inefficiencies , inability to attract business and illegal connections resulting in electricity supply interruptions and lack of new electricity distribution, and therefore there is an urgent need to improve electricity infrastructure to curb these losses.

Project owners

The project sponsor and owner is Midvaal Local Municipality, with National Treasury being the critical stakeholder with funding support and guiding the municipality with the PPP process. Further funding support has been provided by IIPSA and the DBSA on the project. This project is also supported by the appointed Transaction Advisor PwC. Eskom and NERSA is proudly granting support to the municipality in line with their legislated mandate.