In what may seem to a major move in order to kick-start the country’s struggling economy, Saudi Arabia has unveiled its plan to invest a minimum of USD 10 billion in South Africa’s energy sector. According to sources familiar with the matter, the pledge to chip in the significant amount was made by Saudi Crown Prince Mohammed bin Salman during a visit made by South African President Cyril Ramaphosa and government ministers to the country.
The South African government spokesperson Khusela Diko was reported saying that, of the $10-billion investment, most of it will be utilized in the power sector to develop renewable energy projects, advanced petrochemicals, and build refineries.
The move is claimed to be a part of Ramaphosa’s call to attract a mammoth 100-billion-dollar investment in next five years in the region to boost their ailing economy. Since becoming the President in February, Ramaphosa has promised to crack-down on corruption and revive the economy.
If reports are to be believed, Saudi Arabia’s drives for investing in South Africa’s energy industry are in line with Saudi Arabia’s Vision 2030 that aims to diversify away from the nation’s increased oil dependency. This move, though significantly diminishing the South Africa’s GDP is still expected to remain as Africa’s second largest economy presenting new opportunities for The Kingdom.
Ben Payton, Head, Africa research at consultancy Verisk Maplecroft revealed in a company statement that despite the huge investment commitment in the Saudi Arabia’s energy sector, the energy reform in the country has been moving along a very slow pace. The reviving projects in the energy sector are delayed most of the time, given the strong opposition from the NGOs and trade unions.
Industry experts speculate that the funds cannot come easily to South Africa, that is experiencing frequent power outages and this is likely to constitute the nation’s topmost problems.