Eskom’s Electrification Programme Energy Portfolio Committee 14th June 2011

Background/Introduction Eskom’s Electrification Programme Energy White Paper National Electrification Fund Implementation Process

National Electrification Fund Allocation Principles INEP (INTERGRATED NATIONAL ELECTRIFICATION PROGRAMM) recommends allocation of funding to NEAC(national electrification advisory committee) based on the following criteria: Focus on backlog and apply a rural bias Priorities on Integrated Sustainable Rural Development Strategy (ISRDS) Nodal Zones Maximize on available infrastructure Municipal IDP’s (integrated development program)and past performance Government priorities and initiatives such as Integrated Infrastructure Development

National Electrification Fund Process for Allocation of Funding to Provinces Use same criteria as in NEAC Adjust programme as per DoE requirements and in line with the change process Provincial consultation done through: Provincial IDP/MIG Forums chaired by Provincial Local Govt officials Provincial Energy Forums [where applicable] and these are chaired by Provincial Local Govt MEC’s Final funding allocations to Municipalities is based on the approved budget by DoE and are consistent with IDP agreements signed between Eskom and Municipalities

Medium Term expenditure Framework Allocation Previous 6 Years: R893,165 million for the 2006/7 financial year R932,083 million for the 2007/8 financial year R1,058,758 million for the 2008/9 financial year R1,478 million for 2009/10 R1.769 million for 2010/11 R1,750 million for 2011/12 Annual average of 100 000 connections has been realised in the past 6 years

Number of annual grid connections . Electrification – There have been two distinct eras of installation: pre-2000 and post-2000 Number of annual grid connections Thousand Cost per connection R '000 13.4 12.4 12.4 11.8 8.7 8.6 9.0 8.1 8.7 7.0 6.3 5.9 6.1 5.0 5.2 6.0 4.5 4.1 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Self-funded and managed programme Eskom exceeded the government's target of 1.75M connections between 1994 and 2000 Connection every 30 seconds, pole every 10 seconds, 200M cable every minute Connection costs steadily came down Government funded programme The numbers of annual connections by Eskom have dropped, partly due to Increased investment in infrastructure The stringent processes that need to be followed Total investment from 1991 – 2011 to date: R7.5 bn

Electrification – schools and clinics The improvement of local infrastructure through strong impact projects is a key corporate social investment priority for Eskom More than 11 000 schools electrified since 1991 Close to 400 clinics electrified since 1991

Electrification – Still significant backlog of 2. 5 to 2 Electrification – Still significant backlog of 2.5 to 2.9 million households (Eskom’s area of supply) 2.9 million households with no access … … whereof 70% in proclaimed areas Number of households without access to electricity1 Millions, 2011 Breakdown of households without access to electricity by area1 %, 2011 Total: 2.5–2.9M 2.9 0.9 Unproclaimed areas 2.0 Proclaimed areas 1. The figure is based on an assumed increase in households without access at a rate of between 2–5% per annum, from 2.3M in 2006. It is also in Eskom’s areas of supply. The certainty in these figures is low and checks will have to be done in the pre-engineering phase Source: Eskom

PROVINCIAL DATA - BBBEE EMPOWERMENT Province Sum of BBBEEE Sum of BWO Sum of Total Excl VAT Sum of Total Incl vat % BBBEEE(Incl Vat) %BWO(Incl Vat) Eastern Cape 288,305,177.63 133,161,088.51 421,466,266.14 480,471,543.40 60.00 27.71 Free State 14,511,281.78 3,029,525.16 17,540,806.94 19,996,519.91 72.57 15.15 Gauteng 23,012,863.55 6,079,760.73 29,092,624.28 33,165,591.68 69.39 18.33 KwaZulu-Natal 241,217,970.29 115,066,148.36 356,284,118.65 406,163,895.26 59.39 28.33 Mpumalanga 46,381,138.73 14,244,949.16 60,626,087.89 69,113,740.19 67.11 20.61 North West 48,284,819.75 15,839,908.86 64,124,728.61 73,102,190.62 66.05 21.67 Northern Cape 8,933,990.47 427,947.65 9,361,938.12 10,672,609.46 83.71 4.01 Northern Province 79,138,831.27 32,264,327.47 111,403,158.74 126,999,600.96 62.31 25.41 Western Cape 28,305,644.79 14,312,954.64 42,618,599.43 48,585,203.35 58.26 29.46 Grand Total 778,091,718.26 334,426,610.54 1,112,518,328.80 1,268,270,894.83 61.35 26.37

Municipality Assistance - Infrastructure Offerings Contact Centre Access and/or Setup. Energy Losses Management Pricing and Tariff Structure Technical Skills development e.g. accreditation and authorisation of network operators The following infrastructure offerings have been identified by Eskom as a broad Framework to cover the overall scope of Business Adopt A Municipality initiative

Municipality Assistance - Infrastructure Offerings Business and Financial Management Support Credit and Revenue Management (knowledge sharing) Technical Standards Formal Integrated Risk Management Process Demand Side Management Maintenance and Operations Investment , Network and Master Planning

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