A message to government from one of South Africa’s top banking CEOs

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RMB chief executive James Formby has warned that South Africa’s localisation rules are making renewable energy more expensive and should be waived.

“Local material content rules increase the cost of wind and solar energy production. And import tariffs, such as those on imported steel, are making renewable energy even more expensive.

“The more local inputs are required, the higher the cost of energy production which means consumers are paying more for energy. Given the long term nature of these contracts, these costs are baked in for many years.” “Our country desperately needs economic growth, investment and job creation. Reliable, cost-effective energy supply is the best way to build the economy and strong and resilient local industries.”

However, there are fears that the recent global increase in commodity and logistics costs will make it challenging for these projects to reach financial close at the tariff levels awarded.

 

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