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Statement by Minister Mondli Gungubele during the launch of Operation Vulindlela Progress Report for Q2 2022

I would like to welcome you all to this briefing, which marks the release of the second progress report on Operation Vulindlela for this year.

This report demonstrates further progress in advancing the economic reform agenda which the President first outlined almost two years ago.

Since Operation Vulindlela was established, we have steadily addressed the binding constraints on growth and job creation that have held back our economy in the past.

We have long identified the key ingredients for higher growth in South Africa: a reliable electricity supply; an efficient freight rail system; cheaper data and better-quality telecommunications; a secure water supply; and skills to drive innovation and productivity.

If we get these five things right, we can place South Africa on a fundamentally different growth trajectory and create jobs. This is the premise of Operation Vulindlela, and the reason why the President has made structural reform our foremost priority.

In the first progress report, which we released three months ago, we highlighted several key achievements since Operation Vulindlela was established.

These included the completion of the spectrum auction, the raising of the licensing threshold for energy generation projects to 100 MW and the revival of the renewable energy procurement programme.

In the report that we are releasing today, we identify further milestones and outline the significant work that is underway in a number of reform areas.

The greatest focus during the past quarter has been on addressing the electricity crisis, culminating in the actions which the President announced on Monday last week. These actions build on the foundation that has already been laid in the energy sector over the past year.

Since the licensing threshold was raised, the pipeline of embedded generation projects has grown to more than 80 projects with a combined capacity of over 6000 MW.

The joint task team set up by Operation Vulindlela to support investments in new generation capacity has implemented several key changes, including designating these projects as Strategic Infrastructure Projects and streamlining regulatory requirements.
 
Through these efforts, the average time taken for registration of projects by Nersa has been reduced from as long as four months to just 19 days.

The time that it takes to obtain an environmental authorization has been reduced from close to 150 days, to just 57 days.

Additional capacity has been built in the Grid Access Unit within Eskom to expedite grid connection approvals and enable these projects to proceed as quickly as possible.

The actions announced by the President will significantly accelerate this progress.

As the various Ministers outlined this week, work has already begun to ensure that the energy action plan is swiftly and fully implemented.

The National Energy Crisis Committee has been established, and Operation Vulindlela is providing technical support to the committee together with the Department of Mineral Resources and Energy.

These reforms, including the removal of the licensing threshold for generation projects and the expedited procurement of new capacity from renewables, gas and battery storage, will supercharge our efforts to modernize and transform the electricity sector.

Most importantly, these changes will create the conditions for a boom in private fixed investment in the coming years, which will lift our economic growth overall. Construction of new energy projects and associated economic activity will create jobs, while increased energy security will encourage even further investment across the economy.

The progress report also points to a number of other achievements in the past quarter, which the Minister of Finance will elaborate on.

These are just a few examples of the impact that Operation Vulindlela is having as a whole- of-government approach, with multiple departments and entities working every day to ensure that reforms are implemented.

At the same time, the report reflects on the challenges that have been experienced with some reforms, such as with the delay in completing digital migration as a result of the Constitutional Court order. However, where such challenges are experienced, action is being taken to address and resolve them.

I will now invite my colleague, the Minister of Finance, to expand on a number of other reform areas and outline the way forward.

I thank you.