Eskom CEO André de Ruyter has laid out a funding plan to help the company, which generates the bulk of South Africa’s power from coal, transition away from the use of the dirtiest fossil fuel.
De Ruyter said the company is proposing a multi-lender loan facility from development finance institutions that would be paid out in segments over a number of years. Mandy Rambharos, the head of Eskom’s “just energy transition” department, has previously said the transition could cost US$10-billion (about R150-billion).
The utility is considering 8GW of projects, ranging from wind power to solar, hydropower and gas, he said in a presentation to the Presidential Climate Commission on Friday. The Komati coal-fired power plant will be the first to be converted away from the fuel and serve as a pilot project for the conversion of a number of other facilities.
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 country’s emissions. South Africa is the world’s 12th biggest emitter of the climate-warming gases.
In a separate presentation, deputy finance minister David Masondo said there were a number of ways to resolve Eskom’s R400-billion debt burden, including asking for debt forgiveness at the sovereign level in exchange for meeting climate goals. An equivalent amount would then be given to Eskom as an equity injection, he said.
Other options include listing the company on a stock exchange or inviting foreign utilities to take a stake. Masondo said he isn’t in favour of shifting a portion of Eskom’s debt onto the state balance sheet or putting it in a special-purpose vehicle.
The proposals aren’t the views of national treasury, he said. — Reported by Antony Sguazzin, (c) 2021 Bloomberg LP