South Africa’s presidency has unveiled plans to establish the Just Energy Transition Municipal Forum, aimed at overseeing the necessary R319 billion overhaul of the nation’s municipal power grids. The forum will also train municipal staff and ensure that low-income households receive free electricity through government grants.

President Cyril Ramaphosa highlighted the urgent need for grid upgrades, modernization, and expansion to support the shift toward renewable energy. Currently, approximately 80% of South Africa’s electricity is generated from coal-fired power plants operated by Eskom. Major municipalities, including Johannesburg, experience frequent power outages due to equipment failures and overloaded grids, particularly in poorer areas where power is often reduced or cut off for extended periods.

Electricity Minister Kgosientsho Ramokgopa expressed concern over the unsustainable rise in power prices, which have surged by 600% since 2006. South African municipalities are grappling with R82 billion in debt to Eskom and face additional financial strains from rising customer debts totaling R345 billion.

The forum’s objectives include securing funding from various sources and enhancing private sector participation in power provision. However, recent legislative changes, such as the Electricity Regulation Amendment Act, could impact municipal revenue by limiting their electricity distribution rights.

Deputy Finance Minister David Masondo emphasized the importance of effective fund mobilization and accountability in spending. Despite a R7.6 billion allocation from the National Treasury for free services to indigent households in Johannesburg, there remains a shortfall in meeting the demand for free electricity.

President Ramaphosa stressed that while the free basic electricity subsidy is a key poverty alleviation measure, its implementation in some municipalities needs improvement to ensure it reaches those in need effectively.

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