China helps South Africa solve its energy crisis

Paul TEMBE

For nearly two decades, South Africa’s capacity for economic development has diminished, resulting in an energy crisis threatening to collapse entire industries.

Its regional prominence is also at risk as countries like Mozambique make inroads into handling the bulk of import and export cargo for the region. Cargo handling in the region has historically been the reserve of South Africa. The revamped Maputo ports now handle much of Southern Africa’s cargo, even servicing South African clients – and demand is on the rise.

While most sub-Saharan nations have harnessed energy production parallel to their industrial development needs, South Africa has not. Plagued by an energy crisis since 2009, the increasing demand for goods and services to satisfy a steadily growing middle class requires a reliable energy supply, a factor that will bring this country to its knees if left unattended. Pre-1994, nearly 90% of South Africans lived ‘off the grid’; post-94, that clear majority is the centre of society, demanding their share.

Most sub-Saharan nations have been strengthened with Chinese assistance; those that most often come to mind are in East Africa (Kenya, Tanzania, and Uganda), the Horn of Africa (Ethiopia), and West Africa (Nigeria, Ghana, and Senegal). Little mention is made of South Africa. However, a closer look reveals massive Chinese financial backing in our industrial and economic sectors.

The point of convergence for China and African countries is the Forum for China-Africa Cooperation (FOCAC), a multilateral framework that assists with managing, monitoring, and evaluating an array of cooperative projects in Africa according to each country’s historic, cultural, and economic conditions.

For at least a decade, China has provided funding to support the South African coal-based power sector. In 2017, Just Finance International reported that the China Development Bank lent $1.5 billion and US$2.5 billion (R27.26 and R45.45 billion), respectively, for the construction of Eskom’s Medupi and Kusile coal-powered plants. Then there was the Musina-Makhado power station, a proposed 1,320–3,300-megawatt (MW) coal-fired station pegged for construction in the Musina-Makhado Special Economic Zone in the Waterberg area of Limpopo Province in 2022. However, when President Xi Jinping announced at the UN General Assembly in September 2021 that China would no longer finance or build new coal plants overseas, the project was dropped, probably to be replaced by solar power plants.

Despite those new power stations, a reliable energy supply remained elusive, and when South Africa signed the United Nations Framework Convention on Climate Change (UNFCCC) in 1997 and ratified its Kyoto Protocol in 2002, its energy conundrum was exacerbated. Suddenly, South Africa had to deal with fast-tracking industrial development while fulfilling its signatory duties. A ‘just transition’ was the solution: plodding on with fossil fuels while gradually replacing them with ‘greener’ energy sources.

At the recent annual meeting of the Africa Coal Network, the 100-plus organisations from over 20 African nations welcomed the move. Locally, Cosatu demanded that the transition avoids harming the interests of the working class in developing nations, a demand that is being met.

In 2009, the management of Longyuan Mulilo De Aar Wind Power (Pty) Ltd, a subsidiary of the China Energy Investment Corporation (China Energy), arrived in South Africa to help develop green energy near De Aar in the Northern Cape. After the company’s investment of around R5 billion, South Africa’s first and largest wind-power project was completed in 2017 under the supervision of a Chinese team of expert wind power engineers and commenced commercial operations in November of that year.

To date, the Chinese-made 1.5MW wind power units have supplied around 760 million kWh of clean electricity to 300,000 households, saved an estimated 215,800 tons of coal and reduced CO2 emissions by 619,900 tons. Project spin-offs were the construction of 150 km of internal access roads and the installation of 170 km of 33 kV overhead electrical reticulation lines and 45 km of 132 kV transmission lines.

As corporate social responsibility is a standard feature of all Chinese companies investing and doing business in South Africa, the De Aar project set up a fund for local community development, including free medical services for local children, women and elders and an education assistance campaign.

During the Covid-19 pandemic, Longyuan Mulilo made its medical facilities available for detection and screening; by mid-June 2021, it had offered free medical services to nearly 50,000 people. By exploring ways to implement China’s Belt and Road Initiative, Longyuan Mulilo has contributed Chinese strength and wisdom to global ecological progress and built a bridge of friendship between China and South Africa.

Another example of China-South Africa energy cooperation is the GCL-Poly South Africa PV power plant project, run by China-based photovoltaic manufacturer GCL-Poly, which consists of two 75 MW grid-connected PV power plants with a total installed capacity of 150 MW. The plants sell electricity to Eskom under a power-purchase agreement and, in 2021, sold 288 million kWh of electricity worth R1,342 million. The use of utility-scale wind, solar PVC, and concentrating solar power (CSP) increased from 467 MW in 2013 to 6,230 MW in 2022.

On 16 March 2023, South Africa’s newly-elected Minister of Electricity, Kgosientso Ramokgopa, met with Chinese Ambassador Chen Xiaodong to discuss long-term collaborative solutions to ending load shedding and achieving energy security by adding new generation capacity to the grid. They identified five areas of collaboration: sourcing technical expertise; demand-side supply management intervention; training the young in solar PVC installations; introducing micro-grids; and emergency power solutions.

In addition, China is helping to implement the African Continental Free Trade Area agreement by providing infrastructure to access markets in the region and beyond and is assisting with implementing the 2063 African Agenda, aimed at industrialising, and achieving most of the Sustainable Development and Millennial Goals 2030, ascribed by the United Nations.

Time and again, China has expressed its willingness to share its experience of transiting from a planned economy to a mixed market economy with Chinese characteristics. Hopefully, South Africa will grow to enjoy similar economic successes and contribute to the larger mission of building common prosperity and a community with a shared future for humankind.

TEMBE is a Sinologist and a founder of SELE Encounters.