http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.17Change: 0.04
R/$ = 10.69Change: 0.01
Au 1281.11 $/ozChange: 2.07
Pt 1422.00 $/ozChange: 6.50
 
 
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|Energy|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|energy-company|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)
 
 
 
 
 
 
 
 
Other Video News
More
 
 
Latest News
Sacci CEO Neren Rau
The South African Chamber of Commerce and Industry (Sacci) would work with the office of the Afican National Congress (ANC) secretary-general Gwede Mathashe on a series of constructive engagements on improving the domestic economic climate and building a more...
JSE-listed investment and empowerment group Grand Parade Investments (GPI) and electronics contract manufacturer Tellumat have teamed up to create a 51:49 joint venture company Grand Tellumat Manufacturing. The transaction would see the engineering skills and...
JSE-listed property group Redefine Properties on Friday said its acquisition of all the assets and the property portfolio of Fountainhead Property Trust, had not been approved by the requisite majority of Fountainhead unitholders and would, therefore, not be...
More
 
 
Recent Research Reports
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...
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.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
MODDERFONTEIN NEW CITY Modderfontein New City will aim to exemplify an integrated city node and improve infrastructure utilisation through mixed-use spaces
The multibillion-rand development of the Zendai Modderfontein New City, east of Johannesburg, will aim to exemplify an integrated city node, says property group Zendai South Africa COO Wenhui Du. The development will focus on the Modderfontein Gautrain station to be...
The South African Civil Aviation Authority (CAA) hopes to have finalised regulations for the flying of Unmanned Air Vehicles (UAVs) – also designated Remotely Piloted Air Systems (RPAS) and popularly called drones – in the country’s civilian airspace by the end...
Various stakeholders have expressed optimism that the Small Business Development Ministry, created after the national elections in May, will add much needed impetus to enterprise development in South Africa, where a strengthening of the entrepreneurial culture is...
BOB SCHOLES To ensure that emissions plateau by 2020 and then decline until a net negative emission level is achieved by the end of the century, CO2 capture and storage in addition to major emission reduction efforts will be needed
Capturing and storing carbon dioxide (CO2) is the only way through which the world will achieve the lowest of the United Nations Framework Convention on Climate Change’s (UNFCCC) global warming predictions, called the representative concentration pathway (RCP) 2.6....
PARKS TAU Ongoing investigations had identified at least 30 large power users in Johannesburg as having defrauded the city
The City of Johannesburg has recovered R107-million following the arrest of 22 people allegedly involved in corruption, collusion, fraud and tampering with the city’s electricity systems, which had ultimately cost the city R200-million in lost revenue.
 
 
 
 
 
 
 
 
 
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