Eskom seeks partners for $71bn energy transition

Eskom said its energy-transition plan may require as much as R1.2 trillion of investment, with the bulk of the money expected to come from private investors.

The state-owned power utility, which is saddled with R396 billion of debt, plans to tap private investors for the R990 billion it needs to fund generation capacity and shift to cleaner energy sources by 2030, Matthew Mflathelwa, general manager for strategy and planning, said in an interview Wednesday in Johannesburg.

The company needs the financing to extend the life of its existing infrastructure, while building new generation facilities, he said.

“Eskom cannot afford all of it on its own,” Mflathelwa said. “We would require a partnership of some kind, whether it is at a multinational level or whether it’s at the institutional level. I think those details need to be worked out.”

South Africa is finalising details for $8.5 billion of funding that some of the world’s richest nations have pledged to aid the country’s transition away from coal, which is used to generate more than 80% of its power. This week, President Cyril Ramaphosa unveiled plans to allow greater participation by the private sector in electricity production in a bid to end a 14-year energy crisis.

Read: At last: CR throws the kitchen sink at load shedding

The world’s 13th-biggest greenhouse gas emitter also needs R300 billion to improve its air quality over the next decade, Mflathelwa said. Stricter enforcement of laws on air quality could result in about 16 000 megawatts of Eskom generation being taken off the grid, posing “a security of supply problem” for the utility, he said.

© 2022 Bloomberg L.P.