Cape Town, South Africa — 10 May 2013 – South African national power utility Eskom SOC Holdings Limited, which is building the world’s third- and fourth-biggest coal-fired plants, intends to sell more than US$1 billion of bonds this year.
“We will this year approach the markets to continue our fund-raising,” Eskom CEO Brian Dames told Bloomberg News in an interview at the World Economic Forum for Africa here. “It all depends on our capital expenditures. We haven’t drawn as aggressively. This year we will be going to the markets to raise some additional debt, just over US$1 billion.”
The utility is spending US$55.5 billion through 2017 replacing old equipment and expanding capacity to avert a repeat of the rolling blackouts that halted operations of companies including Anglo American plc for five days in January 2008. The power system is straining to meet the economy’s needs, with capacity exceeding demand by razor-thin margins after Eskom deferred upkeep on some aging stations to the colder winter months because of higher unplanned outages in summer.
Eskom is selling US$6.7 billion of debt in the five years through 2017 to help fund the expansion. In February, South Africa’s energy regulator gave the utility permission to raise prices by an average 8% in each of the next five years, half the annual increase Eskom had requested.
Yields on the company’s US$1.75 billion of bonds due in January 2021 declined for the first time in three days yesterday, dropping 5 basis points, or 0.05 percentage point, to 3.88% by noon in Johannesburg.
Source: Bloomberg News. For more information, click here.