1. INTEGRATED NATIONAL ELECTRFICATION PROGRAM (INEP)
DEPARTMENT OF ENERGY
PRESENTATION ON THE
INTEGRATED NATIONAL ELECTRFICATION PROGRAM (INEP)
18 JUNE 2013

2. Annual Report Presentation
Introduction
Key focus areas
Allocation 13/14 financial year
Universal access challenges
Additional progress
Way forward

3. Introduction

4. INEP’s response to the 12 Government Outcomes and PICC
INEP contributes to the following DoE and Government’s Outcomes Based Planning Approach:
Outcome 4 – Decent employment through inclusive economic growth;
Outcome 6 – An efficient, competitive and responsive economic infrastructure network
Outcome 7 – Vibrant, equitable and sustainable rural communities with food security for all
Outcome 8 – Sustainable human settlement and improved
quality of household life and
Outcome 9 – A responsive, accountable, effective and efficient local government system.
INEP is also reporting into SIP 6 of the PICC process.

5. Key Focus Areas for 2012/13

6. Electrification progress Electrified Houses: Municipalities & Eskom
Over 5.6 million households were connected to the grid between and 2012/13.
In period 2002 to 2012/ households were supplied with non- grid technology (Solar panels – Renewable Energy)
Eastern Cape - 12,282
Kwazulu Natal - 43,511
Limpopo ,381
Province
Electrified Houses: Municipalities & Eskom
Eastern Cape
Free State
Gauteng
KwaZulu Natal
Limpopo
Mpumalanga
Northern Cape
North West
Western Cape
Total
Non-grid electrification programmes will in future not only be implemented in concessionary areas, but in a limited basis in other areas in country.

7. MUNIC PROGRAMME 2012/13 – PERFORMANCE APRIL 2013
PROVINCE
ALLOCATION R’000
TRANSFERRED R ‘000
EXPENDITURE R’000
PLANNED CONNECTIONS
CONNECTIONS ACHIEVED
YTD Actual Connections INCLUDING ROLLOVERS EC
R 279,400
270,420
116,591
16494
2996
7601 FS
R 79,300
69,300
24,495
3827
932
3258 GP
R 168,000
188,000
91,328
7859
3874
6216
KZN
R 234,000
240,000
38,270
16491
549
4684
LIM
R 125,300
132,500
64,330
13078
4843
10255 MP
R 74,943
75,823
31,527
5931
2248
5390 NW
R 49,300
43,300
11,677
3852
546
4292 NC
R 59,900
60,800
32,019
3590
887
2892 WC
R 61,300
71,300
39,646
2725
2401
6032
TOTAL
R 1,151,443
1,151,443
449,883
73 847
19 276
50 620

8. ESKOM PROGRAMME 2012/13– PERFORMANCE APRIL 2013
PROVINCE
ALLOCATION
TRANSFERED
EXPENDITURE
PLANNED CONNECTIONS
CONNECTIONS ACHIEVED
YTD Actual Connections INCLUDING ROLLOVERS EC
R488,340,000
R 398,287,779
22,227
17151
21480 FS
R39,118,000
R 22,590,440
2,815
3326
3559 GP
R104,882,000
R 86,620,958
9,568
9688
12843
KZN
R510,292,000
R 527,353,057
26,111
17963
20653
LIM
R233,028,000
R 175,898,147
22,198
23553
26812 MP
R108,566,000
R 85,843,897
9,385
10568
12082 NW
R246,988,000
R 123,921,150
12,779
10516
12062 NC
R36,108,000
R 14,871,096
1,338
1511
1643 WC
R110,046,000
R 68,879,182
7,803
8618
9907
TOTAL
R1,879,368,000
R 1,504,265,708
114,224
102894
121041

9. Non grid – Solar home systems 2012/13 Financial year
TOTAL ALLOCATION
R’000
Planned Connections
Total Expenditure to date
Connections Achieved to Date R
13 310 R
9 343

10. Connections INEP (including roll-overs) Connections Own funding
INEP PERFORMANCE (12/13)
Entity
MTEF Allocations
Connections INEP (including roll-overs)
Connections Own funding
Total Connections
Eskom (bn)
R 1,
21 831
Municipalities (bn)
R 1,
50 620
Non-grid (mil) R
9 343
Total
R 3,117,211
Electrification data of 12/13 still to be added – more connections will be added, need to verify some connections.
Target of was exceeded
Improved efficiencies as a result of be more involved in the operational activities of implementers.
Good co-operation from Eskom and Municipalities

11. Allocations 13/14 Financial year

12. Allocations 2013/14
2013/14
R’000
MUNICIPALITIES
1,314,772
PLANNED CONNECTIONS
103,864
ESKOM (NATIONAL)
2,141,027
PLANNED CONNECTIONS
157,839
NON - GRID
91,150
15 000
TOTAL PLANNED CONNECTIONS *
TOTAL ALLOCATIONS
R 3,546,951
Connections might change as projects are moving from design into
implementation phase.

13. Connection and Bulk Allocations for 2013/14
PROVINCE
Total Allocation
Eskom allocations
(R’ 000)
Munic allocation
Adam allocation (R’000)
Eastern Cape
95 000
Free State
17 782
95 100
85 000
Gauteng
97 000
KwaZulu Natal
Limpopo
Mpumalanga
Northern Cape
94 270
17 170
57 100
20 000
North West
49 150
Western Cape
95 110
Total
3,775,799
2,141,027
1,314,772
320,000

14. Bulk allocation 2013/14 EC R 266,513,230 R 28,000,000 FS -
PROVINCE
ESKOM
MUNIC R’000 EC
R 266,513,230
R 28,000,000 FS -
R 27,000,000 GP
R 291,042
R 41,000,000
KZN
R 26,000,000
LIM
R 7,068,000
R 7,000,000 MP
R 6,583,500
R 17,620,000 NW
R 25,000,000 NC
R 13,500,000 WC
R 36,920,062
R 23,000,000
TOTAL
R 317,375,834
R 208,120,000

15. Adam allocation 2013/14 PROVINCE MUNICIPALITIES ALLOCATIONS EC
KING SEBATA DALINDYEBO
60,000,000
NELSON MANDELA
35,000,000 FS
NGWATHE
20,000,000
MOQHAKA
NALA
MANGAUNG
25,000,000
KZN
MSUNDUZI
100,000,000 NC
SOL PLATJIE NW
TLOKWE
TOTAL
320,000,000

16. Universal access challenge

17. Universal access challenge
Households without electricity: ~3.3 million (Informal 1.2 mil and
formal 2.1 mil)
75 % in Eskom supply area and 25% in municipalities supply
area.

18. Universal access challenge (cont.)
INEP established in 2001/02 - address backlogs of households in line with Energy White Paper (1998) recommendations.
Newly built households to be electrified by the restructured Electricity Distribution Industry (EDI) - due to serious inefficiencies in the EDI over the last 10 years, INEP had to address not only backlogs, but also newly built houses and informal households.
Not only connections had to be funded, but also ‘back bone’ network infrastructure.
In addition to the above challenges, escalating electrification costs and limited funding, as well as the high growth rate of houses (formal and informal), resulted in a serious thread to reach universal access in the country.
Despite its successes to date, the electrification programme will fall short in meeting its target of electrifying 92% of formal households by 2014, as defined as backlogs in 2001/02. It is expected that 84% of all formal households and 78% of all households in the country will be electrified by 2014.

19. Households electrified in South Africa
2011 Census: ±12,24 mil households out of ± 14,45 mil households are utilizing electricity as a lighting source; ± 85% of households have access to electricity for lighting purposes.
Different types of households included into the total household figure (built on the same stand as the formal household):
Houses/flats/rooms in backyard  000
Informal dwellings in backyards (shacks in backyard)  000
Room/flatlet on a property or larger
dwelling/servants quarters/granny flat  000
Total ,
Majority of these households (about 90% plus) are not metered, estimated to be ± 1.1 mil .
Network designs were not done to accommodate these additional households, hence will have to be upgraded.
These household does also not qualify for inclining bock tariff and FBE.
About 2.2 mil households according to Census 2011 stats are without electricity, if the 1,1 mil households that are not metered (have not received electricity formally) been added, total figure of about 3,3 mil.
In line with the INEP stats for households that are not formally electrify (metered), hence ±77% households have a metered supply.

20. Universal access challenge (cont.)
If universal access to electricity by 2014 is not practical, what is the most effective and realistic timeframe to reach universal access, given the various challenges in the electricity industry, raising cost of electrification, etc.?
Hence a new approach to electrification is required - New Electrification Roadmap (Implementation plan) for South Africa was developed.
In March 2012, DoE held an Electrification Indaba where all the relevant sector departments and stakeholders were invited to participate and agreed on the need for a new Electrification Roadmap.
The Indaba resulted in a consultative working group process which the following relevent stakeholders were involved in defining the new Roadmap:
Eskom, DHS, DRDLR, DPE, SALGA, AMEU, CoGTA, MISA, NERSA, SANEDI, DBSA, National Planning Commision, National Treasury, MinMEC, NPC, PICC Secretariat, Commercial financial institutions and current non-grid concessionnaires.

21. Universal Access is function of Electrification Technology options and funding
2027
2017
2018
2019
2017
+R2 billion
2031
2020
2022
2023
2021
Additional funding per year
+R1 billion
2037
2023
Base case
2028
2030
2026
(base case)
Option 2
Most cost efficient technology Option
Option 3 (base case)
Option 2, but non-grid within 3km
Option 5
Option 3, grid connection for informal households
Option 1
All grid
Option 4
Option 3, but grid replaces mini-grids
100 70 90 87 78
Technology mix
% of current un-electrified formal households to be connected to the grid

22. Universal access vs Connection rate
Number of connections outstanding
Connection rates required2 to meet…
Million connections
At least 99% grid access by 2028
Current ~220,000 grid connections per year3
3.4
households1
1.2
households
Universal access by 2025
~380,000 connections per year3
2.2
2012
1 Informal settlements are defined as residential areas that do not comply with local authority requirements for conventional/formal townships
2 Beginning in the middle of 2013; includes informal settlements
3 Ignores growth of new un-electrified households .

23. Using these rules, it is expected to deploy around 300,000 solar home systems and reach universal access for formal households in 2025
South Africa
Provincial non-grid potential
Total connections 2013 – 2025
Million households
Thousand households 37 26
10%
Non-grid
0.3 16 84 11 28
Grid
90%
3.1 73 19
The highest potential for Non-grid is in KZN and Eastern Cape
Time to electrify formal households
20251
1 Assumes existing INEP annual funding and DoHS contribution of R2,000 per household for new RDP houses (40,000 houses per annum); assumes total of 50,000 new formal households per year from DoHS formalization process

24. New Household Electrification Strategy
The key aspects of the new Household Electrification Strategy :
Re-setting universal access date to 2025 and defining universal access as 97% - full electrification is not possible due to growth and delays in the process of formalizing informal settlements.
Electrify about 3 million formal households via grid (90% of backlogs) and about 300,000 households with high-quality non-grid solar home systems to address current backlogs.
Increased efficiency in planning and the delivery process will require Master Plan to ensure more connections and to be in line with PICC SIP progrmames.
Current financial year will improve efficiency, especially wrt municipality’s delivery (last year increased connections by about ), as well as to prepare the electricity industry for the increased connection rate.
Additional funding will be required if universal access is to be reached by An additional R0.5 billion annually (nominal figure) top-up of existing allocations will be required from 2014/15 onwards.
Eskom’s to lead the development of the Master Plan.
Municipalities to improve delivery and management of projects.

25. Additional progress

26. Additional progress
Eskom has progressed very well with addressing the so-called “island electrification” in KZN.
households identified falling into this category in 2011/12 – been electrified (4773 outstanding)
Master plan development – DoE in collaboration with Eskom.
DBSA “front loading” process to fast tracked certain high backlog Municipalities as part of INEP long term planning.

27. Project Report DBSA Front Loading
Municipality
Province
DBSA Loan
Comment/Status
Mbizana EC
R61 Million
Approved, business case submitted to National Treasury
Umzimvubu
R45 Million
Matatiele
R30 Million
Mnguma
R23 Million
Approved, awaiting Council Resolution
Engcobo
The application is being appraised, developing a business case for the Municipality.
Intsika Yethu
R38 Million
Awaiting information from the municipality
Ntabankulu
R35 Million

28. Project Report DBSA Front Loading
Municipality
Province
DBSA Loan
Comment/Status
Ingquza Hill EC
R35 Million
Awaiting information from the municipality
Ndwedwe
KZN
R26,6 Million
Under Administration
Abaqulusi
R23 Million
Business plan not yet received from the municipality
Matubatuba
R45,8 Million
Under administration
Msinga
R53,2 Million
The business plan is not aligned to the IDP. The municipality is in discussion with Eskom to sign the service level agreement.
Umzimkhulu
R17 Million
Municipality to provide outstanding information
Mvoti
R90 Million
Application received on the 22nd of May 2013

29. Project Report DBSA Front Loading
Municipality
Province
DBSA Loan
Comment/Status
Thulamela LP
R90 Million
Municipality will complete phase one of R90 million by July They are in a process of applying for phase two.
Greater Giyani
R16 Million
Municipality to provide Audited Financial Statements
Greater Tzaneen
R50 Million
Application is being processed
Polokwane
R95 Million

30. Thank you