Johannesburg, South Africa — MININGREVIEW.COM — 21 July 2008 – Good news for South African mines, among others, is that state-owned power utility Eskom has expressed confidence that South Africa will get through winter without power cuts, and added that it would tap bond markets to help raise the US$19.8 billion (R159 billion) required for its future expansion.
“I’m confident the entire winter will go without any load shedding whatsoever,” outgoing Eskom chairman Valli Moosa said at an Eskom results presentation here.
Eskom CEO Jacob Maroga expressed his confidence in the utility’s ability to “keep the lights on” during the winter, though he added that the electricity grid did remain vulnerable.
Reuters reports that Eskom has a reserve margin or spare capacity to handle a sharp rise in demand of 6% – far short of its 15% target and well below the 27% level it had a decade ago.
It adds that the electricity crisis this year has had a detrimental effect on economic growth.
The news agency adds that Public Enterprises Minister Alec Erwin is on record as admitting that government was to blame for Eskom’s woes, after failing to heed Eskom’s advice to invest in electricity generating plants.
The utility has embarked on its biggest construction programme in a generation in a bid to meet growing demand for electricity, and has received approval from the country’s power regulator to impose sharply higher electricity tariffs.
Eskom plans to tap international lenders – including the World Bank, and global bond markets, for 60% of the R150 billion needed for its expansion over the next five years. The rest will be raised in local bond markets.
The utility has budgeted R46 billion in the 2008/9 financial year for expansions.