Russian links are nothing more than energy sector state capture
12 December 2023
The recent cabinet decision to endorse the appointment of Gazprombank as the preferred investment partner to rebuild PetroSA’s mothballed refinery in Mossel Bay, and today’s announcement of a 2500MW nuclear new build determination, raise the ugly specter of further state capture – this time at the hands of a foreign government – in South Africa’s struggling energy sector.
There can be no doubt that Russian state-owned nuclear company Rosatom is Gwede Mantashe’s preferred partner on a nuclear new build. Gazprombank is the financial arm of Russian state-owned gas company Gazprom. This begs the question: is this some kind of brown-envelope deal to finance the bankrupt ANC’s election campaign?
In the PetroSA/Gazprombank deal, the tender was structured in such a way that 19 other bidders were disqualified, leaving the Russian company as the only qualifying bidder. Today’s announcement of a ministerial determination to procure 2500MW of new generation capacity from nuclear is equally concerning. Such a determination must be made by the Minister of Mineral Resources and Energy, in terms of s34 of the Electricity Regulation Act. So why did Minister Ramokgopa announce it? Any such decision requires concurrence from the National Energy Regulator of South Africa (NERSA).
When NERSA gave its concurrence for this procurement in September 2021, it did so subject to the following suspensive conditions: