AFRICAN MINERALS

1
AFRICAN MINERALS ENERGY FORUM BEE
Opportunities in the Electricity Industry

• Parliamentary Portfolio Committee
• Minerals Energy

2
Objective of presentation

• To share areas of opportunities for BEE companies
  in Electricity
• To appraise Portfolio Committee of Minerals and
  Energy on some current developments in the ESI
• Introduce AMEF as an entity that will promote and
  ensure operational empowerment of Black owned
  businesses in the ESI

3
Background on Govts BEE intent
Restructure SOEs to create shareholder
value Promoting main stream BEE involvement and
securing significant BEE operational equity

• Relevant Govt documents
• RDP
• GEAR Strategy
• White Paper on Energy Policy
• Status of the nation address 2001
• BEE Commission

4
Scope of presentation
Eskom Gx Tx Dx
5
Scope of presentation

• Electricity Generation
• Electricity Transmission
• Electricity Distribution
• Related non-core business

6
Electricity Generation

• Government Intent
• Restructuring of Eskom
• Grouping of generation plants into clusters
• Promoting new privately-owned IPP investments
• Areas of interest expertise
• Power plant management
• Power plant operations and refurbishment
• Research and Development (renewables)
• BEE Opportunities
• Equity in main stream Eskom generation
• Simunye cluster not viable pending details
  studies
• Equity in new IPPs (e.g. Cape Power Project,
  PBMR)
• Equity in renewable generators (e.g Wind Solar
  thermal)
• Participation in energy Market Place
• Management contracts for
• Power plant management
• Power plant operations and refurbishment

7
Electricity Transmission

• Government Intent
• Open Access in electricity transmission to
  uncommitted capacity
• Maintain as natural monopoly
• Areas of interest expertise
• Electrity trading
• Systems operation
• Pool operation
• BEE Opportunities
• Equity in Systems operation
• Equity in Pool operation
• Equity in Transmission Company

8
Electricity Distribution

• Government Intent
• Restructure Eskom into separate entities
• Amalgamate Municipality with Eskom Dx
• Form 6 REDs
• Areas of interest expertise
• Metering Billing
• Client service / call centre
• Vendor
• Maintainance and operation
• BEE Opportunities
• Transfer of ownership of Eskom brands
• Agrelek, Elektroserve, Elektrowise, Industrelek,
  Utilimark
• Participation in REDs
• Equity in future REDs

9
Related non-core business

• Objective
• Adding value to ESI
• Areas of interest
• Maintanance and refurbishment
• Electrification
• Non-utility generation
• BEE Opportunities
• Demand Side Management
• Energy efficiency in government buildings
• Equity in renewable energy companies
• Equity in Eskom Enterprise
• Change management and communication

10
BEE Current Status Update
BEE PARTICIPATION
Opportunities
Operational
Equity
Generation
No
gt1
Transmission
No
No
Distribution
No
No
Non-core
gt5
minimum

• Some current market perceptions
• BEE only around for 2 more years
• There are no BEE energy companies/ skills
• BEE cannot deliver any way

11
BEE Position
BEE PARTICIPATION
Opportunities
Operational
Equity
Generation
40
30
Transmission
50
30
Distribution
50
30
Non-core
70
50

• Suggested financial and institutional support
• Creation Energy Empowerment Fund
• NER enforcing BEE participation at all levels
• Business linkages between BEEs and FDI

12
ESI Trends
13
African Minerals Energy Forum

• Background
• Established in 1998, AMEF is the private sector
  organisation for new black companies in the
  African minerals and energy business.
• AMEFs aim is to promote and protect the interest
  of members in areas ranging from equity
  participation to strategic and policy
  intervention as well as technical requirements
  and capacity building support

14
African Minerals Energy Forum

• Objective
• To promote active participation of Black Business
  in the Minerals and Energy sector
• To build capacity of AMEF members
• To create forums for networking
• To liaise with Government and Industry on behalf
  of members
• Position
• Promote and protect BEE interests ranging from
  equity participation to strategic position
  intervention
• Support governmetns transformational needs of
  the SA economy
• Act as vehicle through which government can
  achieve its short to long term empowerment goals
• Promote best environmental practises and good
  governance in ESI/EDI

15
References

• Presidency 2001. State of the Nation Address
  Cape Town. Government Communication and
  Information Service
• Ministry of Public Enterprises 2000. An
  accelerated agenda towards the restructuring of
  State Owned Enterprises Policy Framework
  Pretoria Government Printers.
• EDIRC/PriceWaterCooper 2000. Emerging views
  Restructuring of the Electricity Distribution
  Industry Johannesburg. EDIRC Secretariat
• Department of Minerals and Energy 1999 Annual
  Report Pretoria Chief Directorate,
  Communications.
• Republic of South Africa 1998. White Paper on
  Energy Policy for Republic of South Africa,
  Pretoria Department of Minerals and Energy
• Department of Finance 1996. Growth, Employment
  and Redistribution A Macroeconomic Strategy
  Government Printers
• Cheales, P 1995. Look Out A survival guide
  to the international business onslaught William
  Waterman Publications
• Ministry of Public Enterprises. 1995. Discussion
  document by Government of National Unity on the
  consultative and implemation framework for the
  restructuring of state assets. Pretoria
  Government Printers