Private investment in Eskom being considered, Treasury confirms

19 May 2015

The National Treasury confirmed on Monday it was considering private investment in Eskom as part of efforts to improve the electricity utility’s financial sustainability.

“Consideration is also being given to ring-fencing and selling stakes in Eskom’s noncore businesses or power stations, as well as into Eskom’s business as a whole,” the National Treasury said.

Earlier, Finance Minister Nhlanha Nene said that government would consider private equity injections into the utility, while maintaining a majority shareholding, describing Eskom as the “most pressing risk facing” the country.

It did not comment directly on the prospect of a partial listing of the State-owned company (SoC) as hinted to by ANC secretary-general Gwede Mantashe, who indicated that consideration could be given to the so-called “Chinese model”, of listing a portion of an SoC, but retaining a majority interest.

Goldman Sachs chairperson and CEO Lloyd Blankfein mooted a similar approach during a recent visit to South Africa.

Together with the possibility of private investment in Eskom, a continuing increase of private generation capacity, through Independent power producers (IPPs), was also being explored.

Government would also consider amending regulations so that the private sector could build generating capacity to meet its own requirements and supply the surplus electricity to the grid.


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