Johannesburg - Eskom, the state-owned utility that provides more than 95 percent of South Africa’s power, said it will watch the government’s debut Shariah-compliant bonds as an indicator for funding options.
Africa’s second-biggest economy has sold a sukuk or an Islamic bond at a record low borrowing cost for dollar debt.
The issuance may open the way for state-owned companies to tap a growing Muslim investor base and give Eskom more options to plug a 225 billion-rand funding shortfall.
“Eskom will follow the printing of the government sukuk funding as a barometer for its future funding plans,” the utility, based in Johannesburg, said in an e-mailed response to questions today.
“Given the quantum of Eskom’s funding plans, there is certainly value in sukuk funding to diversify its funding sources.”