State-owned utility Eskom has invited interested parties to review and comment on the recently completed socioeconomic-impact assessment study for the Komati power station, which is being decommissioned and repurposed.

The study is said to provide a detailed analysis of the potential impacts that could follow as a result of the closure of the power station and it proposes a plan to mitigate the identified impacts.

The resultant socioeconomic-impact mitigation implementation plan is noted to follow a holistic approach and recommends solutions for repurposing and repowering the power station.

The proposed solutions are multifaceted and seek to mitigate the effects on Eskom, the community and the economy through reskilling and upskilling Komati power station’s staff and qualifying beneficiaries from the surrounding communities, as well as the development of local enterprises and value chains to support the overall just energy transition (JET) strategy, Eskom says.

In support of the JET strategy, Eskom had commissioned studies to understand the impact of the power station shutdown on society and the economy within the affected areas.

In January 2020, following what the utility says was a strict procurement process, Eskom awarded Urban-Econ Development Economists a contract to undertake a socioeconomic-impact study on the planned shutdown and repurposing of the aged Komati, Hendrina and Grootvlei coal-fired power stations, in Mpumalanga.

This study was noted to be undertaken proactively to assess the prevailing socioeconomic conditions within the immediate and greater Mpumalanga area, and to develop mitigation measures to reduce the potential negative social and economic impacts that could ensue from the shutdown of these three power stations.

As part of the study methodology, Urban-Econ Development Economists undertook an extensive social and economic data gathering and investigation process, inclusive of several stakeholder engagement sessions.

Comments can be submitted by email to social@urban-econ.com, or via WhatsApp to +27 60 978 8396.

BUDGET RESPONSE & UNBUNDLING
Meanwhile, in a separate statement, Eskom welcomed Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement (MTBPS) – delivered to Parliament on October 26 – concerning the prospective debt relief solution for the entity.

Eskom said that, as noted in the MTBPS, a debt takeover by government (together with other reforms at Eskom and in the South African electricity sector) would ensure the long-term financial sustainability of the entity. 

“The implementation of a debt relief solution and such reforms to the electricity sector will allow Eskom to undertake the much-needed capital and investment programmes to ensure the stability and security of supply of electricity in the country without relying on further government bailouts,” the utility commented.

As mentioned in the MTBPS, government is working to finalise details of the proposed solution – including the quantum of proposed relief, the relevant debt instruments to be included, and the method for effecting the transaction – and it intends to provide further details in its 2023 Budget, which is expected to be presented in February.

“Eskom looks forward to working closely and collaboratively with the government in the coming weeks in order to develop a solution that ensures Eskom is restored as a financially independent, transparent and operationally efficient company.

“Eskom very much appreciates the ongoing support and cooperation of its investors and stakeholders and will engage and consult with them on the debt relief solution at the appropriate time,” the utility stated.

Further, Eskom said it was continuing to work on the implementation of the legal separation of its transmission division.

Eskom said it would continue to engage with the National Energy Regulator of South Africa and the relevant creditors (as applicable) to satisfy the suspensive conditions and implement the transmission unbundling as soon as possible.