http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.64Change: 0.20
R/$ = 10.85Change: 0.10
Au 1176.50 $/ozChange: -23.72
Pt 1235.50 $/ozChange: -10.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Aug 27, 2009

Eskom mulls ways to close R80bn funding shortfall

Back
Eskom CEO Jacob Maroga and chairperson Bobby Godsell discuss the utility's financial sustainability. (27/08/2009) Cameraperson: Nicholas Boyd Video editing by: Darlene Creamer
Africa|CoAL|Eskom|PROJECT|Projects|Renewable Energy|Renewable-Energy|Africa|South Africa|Acceptable Electricity Tariff|Electricity Tariffs|Energy|Integrated Funding Solution|Sustainable Funding Solution|Bobby Godsell|Jacob Maroga|Power|Koss R-80 Consumer Headphones
Africa|CoAL|Eskom|PROJECT|Projects|Renewable Energy|Renewable-Energy|Africa||Energy||Power|
africa-company|coal|eskom|project|projects|renewable-energy|renewable-energy-company|africa|south-africa|acceptable-electricity-tariff|electricity-tariffs|energy|integrated-funding-solution|sustainable-funding-solution|bobby-godsell|jacob-maroga|power|koss-r-80-consumer-headphones
© Reuse this



Eskom has said that it is determined to achieve ‘break-even’ at an operating level in the 2009/10 financial year, and CEO Jacob Maroga emphasised that ensuring a “sustainable funding solution” for the future was imperative.

Eskom, which posted a R9,7-billion loss for the year ended March 2009, expects an R80-billion funding shortfall for its expansion plans.

Maroga added that the utility would have a funding model finalised by the end of September.

“I am confident that the country will find an integrated funding solution,” he stressed.

Eskom chairperson Bobby Godsell said that the most important issue was to get clarity from South Africa on what an acceptable electricity tariff would be - one that would allow Eskom, co-generating industries, and independent power producers to get a fair return on power produced.

Once this issue was settled, the issue of equity and debt required to assist capital expenditure programmes could be clarified.

Looking toward the new build programme, which Eskom was undertaking to ensure it would have enough power to supply the anticipated future demand, Maroga said that the utility’s five-year capital expansion programme stood at R385-billion, primarily on already committed projects.

In the 2008/9 financial year, Eskom spent R47,09-billion on capital expenditure, and the largest projects being funded were the Medupi coal-fired power station, the Kusile coal-fired power station, and the Ingula pumped-storage project.

“Funding this programme at a time of global crisis is a challenge,” said Godsell.

He explained that if Eskom assumed that electricity tariffs increased at the same rate as the 31,3% recently granted for the next two years, then the utility would experience a shortfall of R80-billion for the build programme.

Godsell further said that Eskom was working “urgently” with both government and the National Energy Regulator of South Africa to close this funding gap, and “is confident that this can be done”.

However, if this gap could not be closed, the utility would have to introduce delays in some parts of the build programme.

Eskom also outlined targeted reductions for the 2009/10 year, and hoped to save R6,2-billion on primary energy costs; cut R7,1-billion in operating expenditure; as well as save R8,7-billion by deferring capital expenditure.

In the year under review, Eskom spent R25,3-billion on primary energy costs – a 38% increase from R18,3-billion in the prior year. Eskom also increased operating expenses by 32% in the 2008/9 financial year, to R29,3-billion. That said, revenues also increased by 21%, reflecting the increases in electricity tariffs, and the company’s turnover was R53,8-billion, compared with R44,4-billion in the previous year.

Eskom has already previously announced five projects that would be delayed, most being renewable energy projects.

With regard to projects that have been delayed, Maroga stated once again that “everything relies on finding a sustainable funding model, and next month we will have more clarity on that”.

Maroga said that Eskom made a conscious decision to “keep the lights on” and prioritised this, knowing that it would mean the utility incurring a loss at the bottom line.

He explained that if moneymaking were the priority “we could simply shut down those who are most expensive”.

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Updated 38 minutes ago One tiny Australian wasp is killing another tiny Australian wasp in South Africa’s commercial forests – and it is a good thing. Leptocybe invasa, the bad guy in this story, was first spotted in Eucalyptus trees outside its native Australia in 2000, in Israel, says...
Updated 39 minutes ago Following four months of improvements, the South African Chamber of Commerce and Industry’s (Sacci’s) Copper Theft Barometer increased to R13-milllion in September, up from R12-million the month before. This was the fourth monthly increase in the “relatively...
Updated 2 hours 49 minutes ago The International Monetary Fund foresees large financing needs next year in the three West African countries hardest hit by the outbreak of the deadly Ebola virus. "The outlook for the Ebola-hit countries has worsened, with large financing needs likely for 2015," IMF...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
In the next 20 years, it was expected that, in Africa, more people would live in cities and towns than in rural areas, United Nations Habitat executive director Dr Aisa Kirabo Kacyira said at the Human Settlements Indaba that took place earlier this month in...
Tough-talking Human Settlements Minister Lindiwe Sisulu has committed government to building 1.5-million low-cost houses over the next five years, telling the Human Settlements Indaba in Johannesburg on Wednesday that the State would achieve this target through the...
Over the past 20 years there has been persistent concern about deindustrialisation in South Africa, as well as the fact that locally produced manufactured products have been increasingly displaced by imports.
Financial agreement for Ghanian independent power producer (IPP) Cenpower Generation Company’s $900-million, 350 MW combined-cycle gas-turbine power plant was finalised earlier this month, paving the way for the project’s construction to begin before 2015 in Tema,...
The revenue implications for South Africa of ‘base erosion and profit shifting’ by corporate taxpayers are firmly in the crosshairs of the Davis Tax Committee (DTC) and Judge Dennis Davis hinted last week that recommendations were being considered to “detect and...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks