In South Africa, the Ministry of Energy has cut its budget to 7.8 billion rand ($ 471 million) after cutting 1.5 billion rand due to the Covid-19. Rural electrification will be the main sector affected by this reduction with 43,000 fewer electrified households.
In South Africa, the Ministry of Energy has just reduced its budget for the current year by 16%, from 9.3 billion rand to 7.8 billion rand ($ 471 million). This decrease is due to the impact of the Covid-19 pandemic on the sector, explained the ministerial department and follows the revision of the 2020/21 fiscal roadmap by the Minister of Finance.
The parliamentary committee on mining and energy resources, which approved the new budget, however expressed concern. In fact, the Integrated Rural Electrification Plan alone supports 2/3 of the planned budget cuts. Thus, it will receive for the year 2 billion rand instead of the 3 billion initially planned. The impact of this reduction will result in 43,000 households out of the 180,000 initially planned which will not be electrified. The provinces of Kwazulu-Natal, the Eastern Cape and Limpopo will be the most affected by this situation.
The parliamentary committee therefore recommended that the department take steps to ensure that the rural electrification program receives all of its funding in time to prevent it from being reallocated or not paid. He also encouraged the Ministry of Energy to approach the National Treasury in order to obtain additional funds for the program as part of the medium-term budget policy statement scheduled for September.
Source: Agence Ecofin