- Respected news agency, Bloomberg, reports that South Africa’s troubled energy utility, Eskom, is in talks to raise about R33 billion from at least five development finance institutions to help fund its partial exit from coal-fired power generation.
- The money would be used to help the company re-purpose coal power plants into sites that could produce renewable energy, gas-fired electricity and host battery storage, according to a presentation made to government, business and labour-union leaders, and confirmed by Eskom.
The utility will ultimately need to raise more than USD10 billion over the next decade for the program, Mandy Rambharos, the head of Eskom’s Just Energy Transition program, said by phone on Thursday.
Eskom is already swimming in a pool of unsustainable debt of around R400 billion mainly from an overrun in the cost of construction of two coal-fired power plants, Medupi which recently went into full commercial operation and Kusile which is still under construction.
Eskom and South Africa are under pressure to cut emissions of greenhouse gases and other pollutants as parts of the country are among the world’s most-polluted and the utility accounts for about two-fifths of the emissions. South Africa is the world’s 12th biggest emitter of the climate-warming gases and almost all of its power comes from Eskom’s fleet of 16 coal-fired plants.
So far, R200 million has been secured to conduct studies into the closing and conversion of the sites, which will affect local communities that depend on them to drive the economy in these areas.
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A further 16.1 billion rand will form an initial facility to start the program, while another 17 billion rand has been pledged, Eskom said.
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The financiers include the African Development Bank, the New Development Bank, Germany’s KFW Development Bank, the World Bank and Agence Francaise de Development of France.
Author: Bryan Groenendaal
