The government-led Accelerated and Shared Growth Initiative
for South Africa (Asgisa) aims to ensure that the country achieves
economic growth, focusing on poverty and unemployment.
Eskom is ideally positioned to make a significant contribution
to the Asgisa initiative through our core business of supplying
electricity, our massive procurement and our capital expansion
programme. Eskom’s contribution to Asgisa is mainly through
leveraging associated activities for developmental benefit.
Leveraging these associated activities includes the following:
- continuing the rollout of electrification
- maximising local content, the participation of black economic
empowerment (BEE), small and medium enterprises (SME)
and black women-owned enterprises (BWO), as well as skills
development for the rollout of the build programme
- maximising skills development by having 4 000 learners
registered in our learner pipeline
Free basic electricity
Government aims to bring relief to low-income households
through the national electricity basic services support tariff,
thereby ensuring optimal socio-economic benefits from the
national electrification programme. Qualifying customers are
eligible for 50kWh of free electricity a month.
Two categories of customers receive free basic electricity (FBE):
- customers who receive a monthly electricity bill, which is
adjusted to allow for their free electricity entitlement
- customers who buy prepaid electricity tokens and collect
their monthly free basic electricity token from an electricity
Eskom provides FBE in its supply areas and this is recoverable
from municipalities at a standard tariff. Any under-recoveries from
differences between the customer tariff and the applied free basic
electricity standard tariff, implementation costs or other costs, are
recoverable from government. Eskom has engaged with various
inter-governmental stakeholders to find a sustainable solution for
any under-recoveries that arise as a result of providing FBE under
the current policy and guidelines.
Free basic electricity
| Municipalities contracted to provide FBE
|Municipal contracts rolled out
|Customers approved by municipalities for FBE
||1 298 747
||1 181 823
|Customers’ meters reconfigured to receive FBE
||1 268 986
||1 074 340
|Reconfigured customers consuming FBE in the year
|Amount invoiced to contracted municipalities
|Cumulative tariff differential and cost under-recoveries1
The DME began funding the Integrated National
Electrification Programme (INEP) in April 2001. Eskom
implements the programme in its licensed areas of supply
on the DME’s behalf.2
Operating costs relating to this electrification programme are
paid by Eskom as the licensed distributor supplying electricity to
Since the inception of the electrification programme in 1991,
a total of 3 638 188 (2007: 3 469 650) homes have been
Funding is currently made available for new connection and
infrastructure development projects that are part of the INEP.
We expect that the average cost of infrastructure development
and the cost per connection will increase as we electrify
communities in more remote rural areas. In addition, technical
specifications for network design have been enhanced to
better accommodate future growth in electricity demand and
to improve the quality and reliability of the electricity supply in
|– Direct connections, excluding farm workers
|– Farm worker connections
|Total capital investment
|– Reticulation and connections
|– Sub-transmission infrastructure development
|– Farm worker connections incentives paid
|– Special projects
In his recent state of the nation speech, the President stated that
government aims to achieve universal access to electricity by 2012.
Meeting the future universal access programme requirements is
dependent on the availability of funding from DME via the INEP.
Eskom is in discussions with DME and other key stakeholders
regarding the planning, funding and other requirements needed
to achieve universal access.
- 1 Tariff differentials and cost under-recoveries have been cumulative since 2006.
- 2 Electrification within the licensed areas of supply of a municipality is carried
out by that municipality.
Electrification of schools and clinics
The electrification of schools and clinics is funded by the DME
through the National Electrification Fund. This programme is
focused on electrifying specifically identified schools and clinics.
Electrification of grid schools and clinics
|Department of Minerals and Energy
Black economic empowerment
Suppliers are selected on merit and we make every effort to
ensure sthat they are not dependent on Eskom to be sustainable.(Refer to page 40).
In April 2008, we will start implementing the codes of good
practice for broad-based black economic empowerment
(BBBEE), issued by the Department of Trade and Industry.
Procurement systems, policies and procedures are being
updated to accommodate the six elements that will be
monitored for BBBEE recognition and reporting: management
control; employment equity; skills development; preferential
procurement; enterprise development; and socio-economic
The focus of BBBEE in Eskom will be on the development of
businesses associated with the build programme, and especially
small businesses in rural areas around the new build sites.
The Eskom rural development programme supports
government’s Integrated Sustainable Rural Development
In 2008, the programme focused on building permanent
classrooms for schools and teaching educators to manage their
schools like a business. All planned projects were completed in
the financial year with expenditures in line with the R21 million
In line with the aims of the New Partnership for Africa’s
Development (Nepad), and as an active member of the Southern
African Power Pool (SAPP), Eskom continues to support
development studies and energy trading within the sub-region.
In support of co-operation and to enhance the efficiency of the
interconnected transmission network joining countries, Eskom
held meetings with utilities in Angola, Botswana, Democratic
Republic of Congo, Mozambique, Namibia, Zambia and