SharePoint


​GTAC provides specialised analytical support to its key client, the National Treasury, for the assessment of proposed large infrastructure investments. Project appraisals of megaprojects are undertaken to determine the likely economic and financial viability of the project, particularly where financial support of one form or another is being requested from the fiscus. We also perform related types of analysis, such as the likely impact of infrastructure investments on the financial sustainability of public utilities, financial cost comparisons of different elements of proposed investment programmes, and potential funding mechanisms for infrastructure projects and programmes.

​​Key focus areas include:

    1. Capital projects appraisal to determine the financial and economic viability of a proposed new infrastructure investment;

    2. Assessment of the likely financial and economic sustainability of an infrastructure investment programme from a sectoral, corporate and national perspective;

    3. Assessment of the likely fiscal requirement or impact of different types of infrastructure projects;

    4. Assessment of the suitability of public or private financing mechanisms for different types of projects.

​GTAC’s aim is to ensure that support is provided to government in identifying public projects that offer the greatest value for money and contribute the most towards promoting economic growth and social welfare. Capital Projects has developed in-house methodologies for assessing projects and programmes, and aims to be part of developing national and global best practice in the field, including cost benefit analysis and cost-effectiveness analysis. In addition, capacity is being built to assess the range of existing and new financing mechanisms that can be utilised for different project types.

Flagship projects
​​​​​​​​​​​​​​​​​​​​​​


New​ research on Rooftop Sola​​​​​​r Systems

Rooftop solar photovoltaic (PV) systems currently contribute a limited amount of power to South Africa’s electricity supply, with installed capacity estimated at 150MW. But these systems are characterised by low capital and operation and maintenance expenditure requirements, and are privately financed. And advances in PV technologies with economies of scale in production have resulted in declining costs over the past decade.

Compare costs

Estimated levelised cost of electricity for a residential PV system: R1.18/kWh 
Estimated levelised cost of electricity for a commercial PV system: R0.91/kWh 
Independent power producer coal: R0.90/kWh
Independent power producer PV: R0.90/kWh
Cogeneration: R1.15/kWh​

Bruce Dzenga's full briefing note, "Power Generation Technologies Feasibility: Grid-tied Rooftop Solar PV", is available on GTAC's website. Contact Dzenga on +27 (0)12 395 6770 and bruce.dzenga@treasury.gov.za.


​​​​ Briefing Note


​​​
Assistance to National Treasury on assessing Eskom's financial sustainability

The unit worked closely with divisions of the National Treasury to assess Eskom’s situation, explore different solutions and package a set of proposals on behalf of an inter-departmental task team, for acceptance by policy makers. Policy makers were assisted over several months to explore the various aspects of proposals on the table, and the unit provided additional analysis to support decision-making, at policy makers’ request. The process culminated in the proposal of a particular solution, known as the Government Support Package, which was adopted by Cabinet in September 2014. Following this, the unit continues to support Treasury and the task team in overseeing the implementation of the support package, and to track developments in Eskom’s financial sustainability.

Following the adopted of the package, the unit continued to support ALM and the Task Team in overseeing the implementation of its various solutions, and to track developments in Eskom’s financial sustainability. The focus then also turned to looking at longer-term energy sector issues, for which the unit continued to provide analytical support to the Task Team.

With the establishment of the Eskom War Room in late 2014, the unit was again called upon to assist (as part of Treasury), given the extensive knowledge that had been built up of the electricity industry, alongside economic and financial assessment skills, which were needed to guide the key workstreams underway. The focus expanded to include not just Eskom’s medium-term financial sustainability, but also short-term challenges, as well the need to look at immediate and medium-term electricity supply concerns. The energy security of South Africa rests critically on resolving these issues, and so the unit is expected to continue providing support to the Task Team for the foreseeable future. ​​​​
Private sector financing of infrastructure

There is a specific focus on assisting with private sector financing of infrastructure. The unit is currently responsible for chairing a Task Team on this topic on behalf of the Treasury. The unit started this initiative, and it now involves various government departments, representatives from finance, industry organisations, and representatives from labour. Following core diagnostic research done in 2013 to understand what constraints there might be to the industry investing more in public infrastructure, the Task Team was able to start focusing on areas of possible collaboration to address specific areas in the investment environment in 2014. This was followed by a series of interviews with the industry in 2015 to assess progress made during the time of the Task Team’s existence. The Task Team continue to facilitate industry’s engagements with government in the areas of strongest opportunities - mainly on the energy sector - but which aims to produce generic results (such as assisting to enable new financing approaches to be used, refinancing of projects and the use of project bonds, including those that can be listed on the JSE). Assistance to further sectors is also envisaged – updates will be posted on the website as progress is made.

Task Team on Private Sector Financing of Infrastructure


Research into the economic feasibility of different energy-generation technologies

GTAC has an ongoing research interest in the comparative costs of different energy-generation technologies, and understanding their associated implications. This includes understanding unit costs from each technology type for producing electricity, the likely impact on the consumer tariff, requirements for government support, suitability to private financing and ownership, major risks, probability of cost overruns, country readiness and other related characteristics that are important to take into account when making investment choices. Technologies and project so far include renewable energy studies​, with a particular focus on solar photovoltaic, the Grand Inga hydroelectric project, shale gas-driven power plants, imported gas-driven power plants and nuclear.

lin ​​​​​​​