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Eskom considers equity in foreign power transmission

The 1,420km Cahora
Bassa power line
running through the
Kruger National Park
Johannesburg, South Africa — ESI-AFRICA.COM — 23 November 2011 – South African national power utility Eskom Holdings is considering the possibility of taking equity positions in foreign power transmission in an effort to bridge the growing prospect of a supply deficit in South Africa.

Miningmx reports that direct equity investments, which would be through a newly formed department within Eskom called Southern Africa Energy, would replace less effective power purchase agreements.

Mark Sims, manager of Eskom’s International Trader Department, said the concept was that by taking equity stakes in foreign power providers, Eskom would have more say in decisions around regional power transmission. “We’re looking at this for the first time, but the strategy is not yet set in stone,” he added.

“This is a plan to participate in transmission rather than power stations. We don’t have specifics and it’s so new that it is going to the board in the next week,” he said.

Sims wouldn’t be drawn on how much capital had been set aside for the investments, or possible targets. However, Mozambique’s power utility, EDM, will in the next few days roll out plans for an electricity power backbone that will help power the growth in the country’s emergent coal industry. Theoretically, this would be a potential investment for Eskom, said Miningmx.

The Southern African Energy unit takes up some of the responsibilities previously held by Eskom Enterprises, although Sims hastened to add that it was focused only on exploring access of regional power supplies.

Sims added that Eskom’s new unit would also look at importing coal. “There’s no specific strategy, but this is something we are wanting to do,” he said. He also raised the possibility that Eskom was now in a position to sign deals with independent power producers (IPPs) regionally. “Anything from DRC down,” he said.

Toronto-listed IPP, CIC Energy, is currently in the process of disposing of its investment in the 2.4 billion tonne Mmamabula deposit in Botswana, after failing to conclude a power supply deal with Eskom over the last few years.