B4SA launches independent fund for corporates to support Energy Action Plan

10th March 2023 By: Marleny Arnoldi - Deputy Editor Online

B4SA launches independent fund for corporates to support Energy Action Plan

B4SA chairperson Martin Kingston
Photo by: Creamer Media

Business body Business for South Africa (B4SA), together with the Presidency, on March 9 announced the establishment of a Resource Mobilisation Fund (RMF) to help capacitate the National Energy Crisis Committee (Necom).

Necom aims to reduce the severity and frequency of loadshedding in the short term, as well as achieve a secure and sustainable supply of energy in South Africa in the long term.

RMF chairperson and B4SA chairperson Martin Kingston explains that various individuals and private sector organisations have pledged their support to the President’s Energy Action Plan (EAP) announced in July last year, and came together to establish the RMF as a mechanism for business in South Africa to support the implementation of the plan.

The RMF will source private sector funding to procure and donate expertise to government, specifically Necom, on an expedited basis. It has been established as a public benefit organisation and an autonomous legal entity, meaning the fund will function independently of government and Necom.

Various South African corporations and philanthropic donors have indicated their support for the RMF, with the fund having raised an initial R100-million already. The RMF is, therefore, accountable to its donors, the business community and the public at large. It will administer and disburse the funds raised by providing donations in kind to capacitate government’s efforts in respect of Necom.

Kingston says Necom will submit requests to the RMF related to required expertise, following which the RMF will facilitate an independent procurement process to source the required expertise.

The RMF believes the expertise that Necom will need, and will be provided with accordingly, includes project management, legal, energy modelling and engineering, over an expected one- to two-year period.

Newly appointed Electricity Minister Dr Kgosientsho Ramakgopa says the Presidency is very supportive of the RMF’s establishment and believes it will help accelerate the achievement of goals envisioned by the EAP.

Kingston and the Presidency have affirmed that the RMF board will execute its objectives in a fair, equitable, transparent, competitive and cost-effective manner, ensuring that integrity is maintained and that the activities of the RMF are conducted with the highest standards of corporate governance and ethics.

The RMF board will comprise both public and private sector procurement experts.

Certain operational functions of the RMF, including day-to-day procurement and reporting functions, have been outsourced to external service providers, although only the RMF board will have the authority to make procurement and deployment decisions.

For example, the RMF has contracted the National Business Initiative to provide procurement, monitoring, evaluation and reporting functions to the fund.

The RMF board currently comprises Kingston, organised business nonprofit Business Unity South Africa CEO Cas Coovadia, investment company WDB Investment Holdings CEO Faith Khanyile and capital market company Afropulse Group co-founder Phumzile Langeni.

Unlike the Energy Council and other bodies, the RMF will not undertake any policy advocacy and is not involved in addressing the energy crisis. Instead, its sole focus is on capacitating government by raising donations, procurement capacity and skillsets, and donating these to Necom.

The RMF aims to donate a first set of resources during April and will report on its activities on a quarterly basis, starting from June.

The EAP was announced by President Cyril Ramaphosa in July 2022 as a solution to the energy crisis. Accordingly, Necom was set up by government as the structure to coordinate the response to the energy crisis.

Necom has nine workstreams focused on the energy crisis, and has already made progress in several of these.

“Through the efforts of collaborative partnerships between businesses in South Africa and government, we know that together we can make a meaningful difference in resolving the energy crisis and many other macroeconomic challenges in the country,” Ramakgopa states.