Asgisa

The government-led Accelerated and Shared Growth Initiative for South Africa (Asgisa) aims to ensure that the country achieves economic growth, focusing on poverty and unemployment.

Eskom is ideally positioned to make a significant contribution to the Asgisa initiative through our core business of supplying electricity, our massive procurement and our capital expansion programme. Eskom’s contribution to Asgisa is mainly through leveraging associated activities for developmental benefit.

• continuing the rollout of electrification
• maximising local content, the participation of black economic empowerment (BEE), small and medium enterprises (SME) and black women-owned enterprises (BWO), as well as skills development for the rollout of the build programme
• maximising skills development by having 4 000 learners registered in our learner pipeline

Free basic electricity

Government aims to bring relief to low-income households through the national electricity basic services support tariff, thereby ensuring optimal socio-economic benefits from the national electrification programme. Qualifying customers are eligible for 50kWh of free electricity a month.

• customers who receive a monthly electricity bill, which is adjusted to allow for their free electricity entitlement
• customers who buy prepaid electricity tokens and collect their monthly free basic electricity token from an electricity vendor

Eskom provides FBE in its supply areas and this is recoverable from municipalities at a standard tariff. Any under-recoveries from differences between the customer tariff and the applied free basic electricity standard tariff, implementation costs or other costs, are recoverable from government. Eskom has engaged with various inter-governmental stakeholders to find a sustainable solution for any under-recoveries that arise as a result of providing FBE under the current policy and guidelines.

Free basic electricity

Electrification

The DME began funding the Integrated National Electrification Programme (INEP) in April 2001. Eskom implements the programme in its licensed areas of supply on the DME’s behalf.²

Operating costs relating to this electrification programme are paid by Eskom as the licensed distributor supplying electricity to the consumers.

Since the inception of the electrification programme in 1991, a total of 3 638 188 (2007: 3 469 650) homes have been electrified.

Funding is currently made available for new connection and infrastructure development projects that are part of the INEP. We expect that the average cost of infrastructure development and the cost per connection will increase as we electrify communities in more remote rural areas. In addition, technical specifications for network design have been enhanced to better accommodate future growth in electricity demand and to improve the quality and reliability of the electricity supply in these areas.

Electrification programme

	Unit  of  measure	Target  2008	Actual    2008	Actual    2007
Total connections	number	160 321	168 538	152 125
– Direct connections, excluding farm workers	number	159 101	167 164	151 088
– Farm worker connections	number	1 220	1 374	1 037
Total capital investment	Rm	1 010	1 022	765
– Reticulation and connections	Rm	900	910	626
– Sub-transmission infrastructure development	Rm	106	108	123
– Farm worker connections incentives paid	Rm	4	4	2
– Special projects	Rm	–	–	14

In his recent state of the nation speech, the President stated that government aims to achieve universal access to electricity by 2012. Meeting the future universal access programme requirements is dependent on the availability of funding from DME via the INEP. Eskom is in discussions with DME and other key stakeholders regarding the planning, funding and other requirements needed to achieve universal access.

1. ¹ Tariff differentials and cost under-recoveries have been cumulative since 2006.
2. ² Electrification within the licensed areas of supply of a municipality is carried out by that municipality.

Electrification of schools and clinics

The electrification of schools and clinics is funded by the DME through the National Electrification Fund. This programme is focused on electrifying specifically identified schools and clinics.

Electrification of grid schools and clinics

Black economic empowerment

Suppliers are selected on merit and we make every effort to ensure sthat they are not dependent on Eskom to be sustainable.(Refer to page 40).

In April 2008, we will start implementing the codes of good practice for broad-based black economic empowerment (BBBEE), issued by the Department of Trade and Industry. Procurement systems, policies and procedures are being updated to accommodate the six elements that will be monitored for BBBEE recognition and reporting: management control; employment equity; skills development; preferential procurement; enterprise development; and socio-economic development.

The focus of BBBEE in Eskom will be on the development of businesses associated with the build programme, and especially small businesses in rural areas around the new build sites.

Rural development

The Eskom rural development programme supports government’s Integrated Sustainable Rural Development Programme.

In 2008, the programme focused on building permanent classrooms for schools and teaching educators to manage their schools like a business. All planned projects were completed in the financial year with expenditures in line with the R21 million budget.

Click here for more details on rural development.

Nepad

In line with the aims of the New Partnership for Africa’s Development (Nepad), and as an active member of the Southern African Power Pool (SAPP), Eskom continues to support development studies and energy trading within the sub-region.

In support of co-operation and to enhance the efficiency of the interconnected transmission network joining countries, Eskom held meetings with utilities in Angola, Botswana, Democratic Republic of Congo, Mozambique, Namibia, Zambia and Zimbabwe.