The municipality of Johannesburg intends to buy 500 megawatts of electricity from independent producers to help prevent permanent blackouts in South Africa’s largest city.
The request for proposals is awaiting approval from the National Treasury and should be released within weeks, Mpho Falatse, the mayor of Johannesburg, said in an interview at Bloomberg’s Johannesburg office on Monday.
“We will invite private companies to participate in cooperation with the government,” she said. “The deals we want to make must guarantee the protection of our revenues” and the stabilization of energy supplies, she said.
Eskom Holdings, the state-owned utility that produces most of South Africa’s electricity, has hit the country with constant blackouts since 2008 because its mostly old and poorly maintained power plants can’t keep up with demand.
The national government recently allowed municipalities to generate their own energy or buy it from other sources, and Cape Town has already announced plans to contract with private companies.
Johannesburg is considering a number of options to increase supply, including entering into long-term partnerships with private companies and charging them access to the city’s grid so they can transmit and sell the electricity they generate, Falatse said.
“You’re looking at 20 to 25 years because the private sector partners have to pay back their money,” she said.
Doctor Falatse took office last November after an opposition coalition led by the Democratic Alliance wrested control of Johannesburg from the ruling African National Congress in municipal elections.
She expects to need two terms to reverse the “disintegration” that began under the previous administration and get the city back on track.
According to the mayor, it will cost about 300 billion rand ($18.3 billion) to address Johannesburg’s infrastructure backlog, with about 26 billion rand needed to stabilize the power supply.
The city has struggled to raise the loans and grants needed to finance expansion and repairs to transportation links, water treatment plants and pipes and other projects, and the funding problems are compounded by a culture of nonpayment among users, she said.
Phalatse has also had to deal with a series of violent protests by communities that lack access to housing, schools and other basic services.
“Protests against service delivery have a political agenda that mobilizes communities to make the new administration look like we’re not doing what we’re supposed to be doing,” she said.
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