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Tuesday, October 13, 2009.

From Creamer Media in Johannesburg, I'm Shannon de Ryhove.

Making headlines today:

South Africa's financially stressed power utility Eskom says the appropriate price of power should be 80 to 88 c/kWh rather than the current level of 33 c/kWh.
CEO Jacob Maroga says that an appropriate price path is required to migrate from the current prices to a cost reflective power tariff.

In spite of these increases, Eskom will still face funding gaps of 2,1-billion, 32,7-billion and 28,5-billion-rand between 2010/11 and 2012/13.

One option is for an immediate 146% rise in 2010/11 to 75 c/kWh real, 83 c/kWh nominal. The second and preferred model, in Eskom's view, is for a smoothed trajectory, which will require increases of 45% a year for three years.

Without allocating funding for independent power producers, the increases would be 42,8% for the three-year period.

Maroga says that it's hoping for a tariff determination early next year, for implementation for Eskom customers from April 1, 2010, and for the municipalities from July 1, 2010.

The Industrial Development Corporation is seeking proposals from South African-registered banks and financial institutions regarding its planned domestic bond programme. The IDC last raised a bond some 20 years ago.

The development finance institution expects to approve 70-billion-rand in equity and loan finance over the next five years. It has indicated previously that it'll need to raise its gearing from around 6-billion-rand currently, to nearly 25-billion-rand by 2013. In so doing, its debt-to-equity position would move from around 8% to 35%.

In a recently published tender advertisement, the IDC formally requests proposals for a "lead arranger" to establish a domestic medium-term note.

The State-owned group has indicated that up to 14-billion-rand will be raised through the issuance of bonds, at a rate of between 3-billion and 4-billion-rand a year between 2010 and 2013. Its first issuance is likely during 2010.

Also making headlines:

Vodacom says that a dramatic reduction of cellphone charges will disrupt the country's economy and communications sector.
Plans for a local superthin solar panel production plant move ahead.
Trade and Industry Minister Dr Rob Davies says that the strong rand isn't competitive.
And, Eskom is determined to build a concentrated solar power demonstration plant.

That's a round up of news making headlines today. For more on these and other stories please visit engineeringnews.co.za.

 

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