SA announces new funds for power utility
September 15, 2014, 4:11 am

The construction programme is part of a 350 billion rand ($38 billion) plan to ensure South Africa has enough power to underpin an economy growing at 3 per cent a year – a rate the government wants to see rise to 5 per cent or more [Xinhua]

The package would guarantee energy security and support gross domestic product growth, said the government. The plan was approved at a special Cabinet meeting in Cape Town on Thursday for Eskom which provides about 95 per cent of South Africa’s power.

“Eskom will be raising additional debt in the region of 50 billion rand ($4.5 billion), over and above its original plan of 200 billion rand,” Treasury spokesperson Phumza Macanda said in a statement.

“This package was based on recommendations from an Inter-Ministerial Committee which reviewed an extensive set of options available to ensure energy security,” it added.

Energy policies and regulations will be refined, electricity demand will be balanced, free electricity will be provided for the poorest households, independent power producers will be supported by government and Eskom’s operations will be made more efficient, the Treasury said.

Eskom’s current capacity is usually close to 35,000 MW.

In March, the utility was forced to impose rolling blackouts for the first time in six years to prevent the national grid from collapsing.

Eskom is struggling to complete work on the massive Medupi power plant by the end of this year. Work on the coal-fired power station – the first to be built in more than 20 years – has been beset by construction delays.

Eskom said on Saturday the first unit of the Medupi plant would link up with the grid on December 24.

The construction programme is part of a 350 billion rand ($38 billion) plan to ensure South Africa has enough power to underpin an economy growing at 3 per cent a year – a rate the government wants to see rise to 5 per cent or more.

TBP and Agencies