DFER

1. THE GROWTH OF THE ENERGY
SECTOR AND OPPORTUNITIES FOR
FOREIGN INVESTMENT
South Africa – Italy Summit
Belmond Mount Nelson Hotel
Cape Town – South Africa
October 2 and 3, 2014
Mr Ndaba Ntsele
Executive Chairman – PAMODZI GROUP

2. PAMODZI GROUP PROFILE
PRESENTATION OUTLINE
1.State of Infrastructure in Africa
2.Energy Sector and Economic Development
3. Investment Opportunities and Challenges
4.Proposals

3. STATE OF INFRASTRCUTURE IN AFRICA
 Africa’s Infrastructure lags far behind that of other developing
countries such as Asia and Latin America.
 The difficult economic geography (low population densities)
presents a challenge for infrastructure development in the
continent.
 Africa needs to spend approx. $93 billion annually on
infrastructure to match its economic growth trajectory
 The Energy Sector represents approximately 40% of the
infrastructure backlog in Africa
 A large share (almost two thirds) of Africa’s infrastructure is
domestically financed through public sector funding and
Development Finance Institutions
 Historically, infrastructure delivery has been hindered by weak
institutional, regulatory and administrative reforms in the continent
Source: International Bank for Reconstruction and Development [The World Bank] (2010). Africa’s Infrastructure, A Time for Transformation .

4. PAMODZI GROUP PROFILE
ENERGY SECTOR AND ECONOMIC DEVELOPMENT
 In the decade to 2010, infrastructure contributed over half of Africa’s
improved growth performance
 The current generation capacity [approx. 68 000 MW] for SSA will need
to grow by 7 000 MW per year to keep pace with demand
 For SA’s economic growth to be sustained at 5.4 % per annum, an
additional 20 000 MW of capacity needs to be installed over the next 15
years [Integrated Resource Plan 2010-2030]

5. PAMODZI GROUP PROFILE
INVESTMENT OPPORTUNITIES AND CHALLENGES
 African governments are using Public Private Partnerships (PPPs) to
attract foreign investment into the Energy Sector
 Private Equity International (2014) estimates US$ 200 billion in annual
revenues from infrastructure [mostly from telecoms and energy]
projects by 2020
 Private Equity International (2014) reports that African independent
power producers (IPPs) have earned IRRs of up to 25%, compared
with 15% in Latin America and 12% in Eastern Europe

6. PAMODZI GROUP PROFILE
 The Renewable Energy Independent Power Producer Programme
[REIPP] in South Africa has attracted a number of foreign investors,
largely from Europe. No Italian company has been awarded yet.
 Alternative technologies e.g. waste-to-energy and biomass have been
very few. Italy possesses these world class technologies
 The capital and technology requirements of the energy sector
generally exclude many local SMMEs. Potential for Italian enterprises
to partner with local SMMEs
 Opportunities to partner with municipalities with the support of the
Ministry of Cooperative Governance and Traditional Affairs (COGTA),
to develop and implement the alternative energy generation projects
INVESTMENT OPPORTUNITIES AND CHALLENGES CONT..

7. PAMODZI GROUP PROFILE
PROPOSALS
 Formalise business partnerships between South Africa and Italy for the
development, funding and implementation of alternative energy sector
programmes
 Through COGTA, establish and implement business – municipality
partnerships for the implementation of alternative energy projects at
municipal levels
 Through the Department of Enterprises and Department of Energy,
establish a partnership between business [SA-Italy] and ESKOM for the
implementation of various energy value chain projects [from generation –
transmission – distribution – revenue collection]

8. PAMODZI GROUP PROFILE
CONTACT DETAILS
Physical Address:
Pamodzi House
5 Willowbrook Close
Melrose North
Athol
South Africa
Telephone :+27 87 741 0000
Web : www.pamodzi.co.za
Email : ndaba@pamodzi.co.za
loyiso@pamodzi.co.za (Business Development Director)

9. THANK YOU