ActionSA has written to Mineral Resources and Energy Minister, Gwede Mantashe, to provide details about PetroSA’s $200 million, or roughly R3.7 billion, deal with Russian-based Gazprombank to restart operations at the Mossel Bay Refinery. While we are aware of South Africa’s urgent need to ensure energy stability, ActionSA is concerned about the secrecy surrounding the deal and allegations that the tender processes were slanted to favour Gazprombank. When concerns were raised by PetroSA’s internal bid evaluation committee and board, it was reportedly overruled. It remains unclear whether the $200 million deal will be in the form of an investment or a loan, what the terms of that agreement are or what the shareholding will look like, who will get the profits from Mossel Bay Refinery, and whether Gazprombank will get access to any South African patented technology. (Herman Mashaba, ActionSA President)
Kevin Mileham MP, DA Shadow Minister of Mineral Resources and Energy
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:
1. That, in line with decision 8 of the 2019 Integrated Resource Plan, the nuclear build programme be at a pace and scale the country can afford;
2. That technological developments in the nuclear space be recognized and taken into account; and
3. That a demand analysis be conducted to establish the rationality of the decision, using the envisaged load profile for 2030, and the required generation profile to meet that load, to determine the capacity and scale at which SA would need to procure nuclear generation.
So where is the evidence that whichever minister made this determination complied with these preconditions?
These vanity megaprojects are nothing more than the ANC’s attempt to shore up its dwindling support ahead of the elections and fill their empty pockets. Additionally, it appears to be an insurance against the growing likelihood of an ANC loss of power.
The Democratic Alliance will not allow such blatant abuse of power and potential corruption by foreign powers and our government to go unchecked. We demand absolute transparency and accountability from the ministers concerned and a complete record of decisions showing how these decisions were reached.
South Africa cannot afford another 5 years of ANC corruption and mismanagement, or another 15 years of looting and non-performance while we build a new nuclear plant, with little to show for it during that time. The time to take back our power is now!