Cyril Ramaphosa with Crown Prince Mohammed bin Salman (GISA)

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Saudi Arabia to invest $10bn in South Africa’s energy sector

18 July 2018 | By GCR Staff | 0 Comments

The state visit of South African president Cyril Ramaphosa to Saudi Arabia has secured an agreement on the part of the Saudis to invest $10bn in the republic’s energy sector.  

Saudi developer ACWA Power and the state-owned Central Energy Fund of South Africa are aiming to develop solar projects.

Mohammad Abunayyan, the chairman of ACWA Power, said the aim would be to make use of “the most advanced and versatile solar technology solutions which can efficiently and reliably produce clean energy throughout the 24-hour period”.

The first project will be the 100MW Redstone concentrated solar thermal power (CSP) plant, to be located in the country’s Northern Cape Province. This will be capable of suppling power to 210,000 homes once operational.

Other Saudi projects will include the construction of refineries and petrochemical plants.  

President Ramaphosa also visited Nigeria and the UAE.

Following the visit, the UAE also announced plans for $10bn worth of investments into Africa's second biggest economy.

Ramaphosa said on Saturday that this would be aimed at mining, tourism and “sustainable development”.

In return for the investment, the Arab states are looking for access to South Africa’s market, the second largest in Africa, and may also be aimed at disrupting Pretoria’s close relationship with Iran.

Ramaphosa is seeking $100bn in investment to address a series of economic and social problems in the republic.

South Africa’s economy shrank 2.2% in the first quarter of 2018 owing to declining production in the agriculture, mining and steel production sectors.

More generally, it faces structural problems with inadequate electricity generation and an overreliance on primary production, which exposes the economy to changes in commodity prices. Meanwhile, the country is facing a daunting set of social problems, including a 36% unemployment rate.

Image: Cyril Ramaphosa with Crown Prince Mohammed bin Salman (GISA)

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