Energy: Nene hints at privatisation

SOUTH Africa was open to private investors helping to finance power plants built by Eskom to plug a funding gap faced by the state power utility, Finance Minister Nhlanhla Nene said yesterday. Nene said the government might give Eskom new debt guarantees or convert subordinated loans into equity. “There is also the issue of trying to see whether the extension of some of the infrastructure build programme can’t be taken up jointly in partnerships with the private sector,” he said. “We think it is worth considering that.” Eskom is building two coal-fired power plants and considering a third to address a shortage of power in the country, which relies on electricity to tap the world’s biggest platinum and chrome deposits. Eskom wants the government to help fill a R225 billion cash flow shortfall in the five years up to March 2018 and avoid its credit rating being downgraded to junk by Standard & Poor’s next month. Eskom has capacity to generate about 42 000 megawatts of power. Trade union federation Cosatu opposes Eskom’s privatisation. – Bloomberg