The current concerns expressed by most parties involved in the non-grid electrification programme of South Africa indicate that a revised approach to the programme objectives is required. The current lack of clear targets, monitoring or assessment procedures, as well as uncertainties over budget allocations for the programme, must be resolved in order for the programme to be completed successfully.
Perhaps the most pressing issue is that of government subsidies. The capital subsidy offered to the international concessionaires that install solar systems in rural areas is of particular significance and is currently subject to question. Parallax has developed a range of financial scenarios for the future of the programme that are designed to eliminate the subsidy uncertainties and provide a clear framework for the government and current concessionaires. These have been presented to the Department of Minerals and Emergy in South Africa for consideration during the ongoing review of the non-grid programme.
The scenarios developed all involve the replacement of subsidies for individual installations with an alternative financing mechanism that meets the capital needs of concessionaires. Some scenarios also propose to address other financial needs, such as start-up costs and loans to customers, where necessary. Such a mechanism will require an independent manager with responsibilities for smoothing the access of concessionaires to available finance, managing financial flows to and from the non-grid programme, and for monitoring the performance of all service providers against agreed targets. Such a manager will be in an ideal position to facilitate the efficient achievement of non-grid electrification programme aims and objectives.