The completion of Medupi is expected to grow South Africa’s Gross Domestic Product (GDP) by about 0.35% a year, says President Jacob Zuma.
Medupi is green-fields power plant comprising of six units rated in total of 5764 MW installed capacity.
“The shortage of energy does not only cause enormous inconvenience to our people. It is a serious impediment to economic growth,” said President Zuma on Sunday at the milestone official opening of Unit 6 of Medupi.
GDP growth has contracted by 1.3% in Q2 2015 after growing by 1.3% in Q1 2015.
Challenges in the energy sector, drought conditions and a weak domestic demand all contributed to the contraction in the GDP growth in the second quarter.
The station is planned to be fully operational in 2019. Once completed it is expected to the fourth largest coal-fired plant and the largest dry-cooled station in the world.
Medupi was scheduled to be fully online four years ago, but construction has been delayed by labour unrest, leading to spiraling costs running into R105 billion. Unit 6 is expected to add at least 800MW to the struggling national power grid.
The unit was synchronised into the national grid in March and since then it has been undergoing tests.
Government, Zuma said, is continuing to implement measures to remove constraints in the economy.
“Our major intervention is the Nine Point Plan announced in the State of the Nation Address this year.”
The plan is aimed at removing constraints and to boost business and consumer confidence, investment and economic growth.
Benefits of Medupi in Lephalele
The President detailed some of the benefits of Medupi in stimulating Lephalele.
The town of Lephalale’s GDP has increased by about 95% per year as a result of the construction, while creating jobs for about 18 000 construction employees and 2 000 supporting staff sourced mostly from the local areas.
Further in all these projects, South African companies obtained 62% of the R75 billion of the contracts.
Other added benefits of the Medupi project included skills development as well as the investing in excess of R2.3 billion in infrastructure and socio-economic development initiatives in Lephalale.
Eskom built 995 houses and bought 321 flats at a cost of R1 billion in the Lephalale area.
Eskom acting CEO Brian Molefe said the unit will enable the utility to supply South African homes and businesses and empower economic expansion to millions.
Eskom said Unit 5 at Medupi will be completed in early 2017, while the last unit will be completed between 2019 and 2020.
“We will shift mountains if there needs to be in order to meet the target,” said Molefe.
Currently the total cost of Medupi stands at R105 billion.
