HOW A SUPER ESC o CAN DEVELOP CAPACITY AND INCREASE COMPETITIVENESS THE WAY FORWARD

ESCos capable of bidding on more complex projects.

Using Etihad ESCo (135 projects in the first four years) as a reference, it can be assumed that 30 to 40 or more projects could be implemented per year within a short time. This means that, even with some ESCos being awarded several bids, there is room for more very large ESCos in South Africa.

ESCo aggregation, dimensional growth and improved public sector experience are all positive elements that will flow toward the private sector courtesy of a Super ESCo. Once the ESCo market matures, the Super ESCo will develop its own internal ESCo ratings, quality controls and standards and the capacity to guide government policy to create a more sophisticated ESCo market. It will also provide feedback to SANEDI and support improvements to the ESCo Register.

Assuming adequate government support, the Super ESCo approach can help tackle public and private sector obstacles that currently hinder the growth of a domestic ESCo sector.

The knowledge that SANEDI’s ESCo team gained in 2022 with the support of the World Bank must be further digested and disseminated through the local ESCo market and its stakeholders, including financing institutions and commercial banks. An appropriate financing mechanism, such as the proposed revolving fund, must be studied and understood by all participants, including government. This is the challenge to be addressed in 2023.