Finance Minister Enoch Godongwana says he was misunderstood on Monday when he was quoted saying that the conditions under which government would take over Eskom's debt were linked to the power utility building new coal, gas and nuclear plants.
In a statement issued on Thursday, the National Treasury said:
Godongwana's comments came on the eve of the global climate conference COP27, at which SA and its international partners in the Just Energy Transition Partnership (JETP) are preparing to unveil the first phase of an investment plan to move towards cleaner energy. The US, UK, EU, France and Germany are supporting a package of $8.5 billion (R154 billion) in grants and loans, on the grounds that SA makes an accelerated transition away from coal-fired power.
"Minister Godongwana is fully committed to the government's Just Energy Transition framework and the balance it envisions of accelerating investment in new generation capacity while protecting the communities that will be worst-affected by the move away from coal and other fossil fuels," said the statement.
"His point was that the fundamental purpose of the National Treasury's plan to take over a portion of Eskom's debt is to allow the utility to focus on and invest in increasing its generation capacity."
Interviewed on Monday at an event hosted by the SA Chamber of Commerce and Industry, Godongwana said: "There must be conditions precedent to make sure that Eskom makes certain undertakings before I take the full debt."
Asked by News24 if this included additional "reliable energy such as gas and nuclear", he replied "yes". In comments to Netwerk24, he said that this included coal.
Godongwana's comments, in apparent support of new fossil fuel investment, generated huge concern, in the context of a government that is often ambiguous on its position on fossil fuels, particularly coal.
While the government made commitments to an accelerated reduction of carbon emissions at COP26, frequent comments by the Minister of Mineral Resources and Energy Gwede Mantashe that SA must maximise its use of its coal resources have undermined confidence in SA's commitment.
In his Medium-Term Budget Policy Statement speech last Wednesday, Godongwana did not outline the conditions of the debt takeover.
"The debt takeover, once finalised, together with other reforms, will ensure that Eskom is financially sustainable. The programme will allow Eskom to focus on plant performance and capital investment and ensure that it no longer relies on government bailouts," he said.
It had been anticipated that Godongwana would outline the detail of the debt swap last week, including the quantum and the conditions. This is now expected to be announced in February.