IFC Helps Bring Power to the People in South Africa
IFC is helping power up Africa’s largest economy. IFC is working together with South Africa’s Department of Energy to pave the way for electrifying millions of households over the next decade using an efficient mix of public and private financing, and on-grid and off-grid solutions.
Since the end of apartheid, only a third of South Africans had access to electricity. The new democracy faced a myriad of social and economic challenges, and made national electrification, along with delivery of other basic services, a priority.
Millions have since been connected and by 2012 about three quarters of formal households were electrified Still 3.4 million South African households, or some 20 million people, remain without power, many of who live in hard-to-connect and sparsely-populated rural areas or crowded informal settlements.
South Africa’s growing population means that over the next two decades the government will have to connect 200,000 households annually to maintain the current levels – a number it wasn’t certain of achieving without a fresh approach to the challenge.
IFC, through its Africa Renewable Energy Advisory Services Program, helped South Africa design that new strategy. IFC completed the strategy and its implementation in May 2013 and has moved on to supporting companies to deliver solar home systems installations at scale.
IFC began working with DOE’s Integrated National Electrification Program in early 2012 to create a new National Household Electrification Strategy. It was presented to Parliament in May 2013, and approved by Cabinet in June 2013. The strategy outlines a way forward for achieving universal electrification in South Africa by 2025 taking a low-cost approach that makes efficient use of connections to the electrical grid and off-grid services such as solar home systems.
Working through DOE, IFC’s advisory services team engaged closely with key national and municipal government counterparts, the national utility Eskom, and the private sector. The team encouraged best practices on master planning and off-grid contracting, and also shared rural and urban informal settlement electrification program design in South America. The result was a plan intended to coordinate stakeholders and best allocate government’s limited resources so up to 350,000 connections can be made annually in the coming years.
The social and economic benefits of electrification are clear: increased potential for productive activities, longer opening hours for businesses and studying time for students, heating in the winter, improved security. As it is implemented, South Africa’s new approach to electrification planning can provide valuable lessons for other countries in the region.
"Universal electrification will allow poor households and communities to improve their living standards and enable private sector businesses in the renewable energy sector to grow,” said Pepukaye Bardouille, Senior Operations Officer, Clean Energy, Sustainable Business Advisory. “IFC brings extensive expertise in supporting off-grid energy access, and has a strong understanding of the range of solutions that South Africa can apply.”