Rand leaps as parliament approves power generation plan
JOHANNESBURG - Parliament has approved the promulgation of South Africa's long-overdue plan for electricity generation until 2030.
This saw the rand rally against major currencies, gaining over 0.9%.
Bianca Botes a Treasury Partner at Peregrine Treasury Solutions, said, " The news comes as a great relief after months of uncertainty, in the midst of yet another round of load shedding implemented by Eskom on Wednesday, which is expected to last well into next week."
The financial situation of Eskom and its ability to sustain electricity supply to SA will ultimately drive foreign direct investment as well as economic growth in this country.
The rand is currently trading at R14.80/$, R16.45/€ and R19.13/£ at 12:20pm (SAST).
The IRP spells out a proposed energy mix for the country until 2030.
In a statement, Cabinet said "most of the inputs" from experts in the sector, the public and academia, received during a public consultation process last year were included in the 2019 IRP.
"The plan proposes nine interventions to ensure the country responds to the energy needs for the next decade. The interventions draw from the current baseline of the demand and supply of the country’s energy and the country’s international obligations to the minimum emission standards," the statement said.
"The plan remains within the policy framework of pursuing a diversified energy mix that reduces reliance on a single or few primary energy sources. It will be revised in line with the changing energy sector environment."
Business Unity South Africa this week warned that any further delay in releasing the IRP would prejudice procurement and investment decisions to ensure security of power supply.
BUSINESS REPORT ONLINE