US’s Adeyemo Says S. Africa Needs Will to Fix Energy Crisis

Antony Sguazzin
·2 min read
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(Bloomberg) -- US Deputy Treasury Secretary Wally Adeyemo said fixing South Africa’s power-supply crisis will need political will.

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The American official urged the African nation to expand its transmission network and look beyond coal to generate electricity. South Africans have been subjected to power outages for years, some lasting more than 10 hours a day, due to a reliance on aging and ill-maintained coal-fired power plants.

Adeyemo, who is visiting South Africa and spoke to the local American Chamber of Commerce in Johannesburg on Wednesday, stressed that the US is willing to help fund the energy transition through its participation in a $9.3 billion climate finance pact between Pretoria and some of the world’s richest countries.

The US Treasury has expressed its frustration that South Africa has so far not taken up $2.5 billion in cheap loans through the pact to allow its power grid to accommodate more energy from solar and wind plants. The so-called Just Energy Transition Partnership has been opposed by South African coal miner unions and some politicians.

“Allowing for more renewable energy development is a sustainable and cost-effective means of helping to end the electricity crisis,” Adeyemo said, adding that he had discussed the issue with South Africans during his visit. “The United States recognizes the scale of the challenge.”

He also said the government needs “to make the decisions necessary to modernize the grid and enable new generation sources to come online” and urged it to provide incentives to encourage investment in the mining of metals needed globally for renewable energy plants and electric vehicle batteries.

The country has the sixth-best supply of raw materials needed for the manufacture of lithium-ion batteries with increasing supplies of nickel and the world’s largest reserves of manganese - key metals for battery manufacture, according to a ranking by Bloomberg BNEF.

For all that potential to be realized the country will need to tackle graft, according to Adeyemo.

“Investments alone cannot unlock the potential of your economy,” he said. “Progress on reliable energy and addressing all the other challenges this great country faces is inhibited by corruption.”

(Updates with Adeyemo’c comments in fifth paragraph.)

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