Johannesburg, South Africa — ESI-AFRICA.COM — 23 November 2010 – South African power utility Eskom has reported a strong surge in first-half profit, boosted by higher power tariffs, and says it has also secured the necessary funding for its expansion programme.
The state-owned company, which supplies 95% of electricity in South Africa, said in a first-half results statement released here that net profit for the six months to 30 September was R9.5 billion compared with R1.1 billion in the same period a year earlier. Revenue had totalled R51.1 billion, compared with R38.3 billion in the same period of 2019.
The utility said its first-half earnings had been boosted by the high tariffs, increasing demand and low maintenance during the winter period.
Eskom, which has been struggling to raise the R440 billion it needs over seven years to build new power plants to meet fast-rising demand in South Africa, said it had identified sources of funding for its capacity expansion programme. “We now have the certainty we need to go ahead with the build programme,” chief executive Brian Dames told a news conference here.
The government has given Eskom R350 billion of guarantees, a R20 billion equity injection and a loan of R60 billion. In addition, Eskom has secured funding from various international institutions, including a US$3.75 billion (R26.25 billion) loan from the World Bank.
Eskom has also said it would tap the U.S. bond market in early 2011 for cash to pay for new power stations and other infrastructure desperately needed to avoid a power crunch.
The power utility is currently building two new 4 800 MW coal-fired power plants. Any delay in the two plants would prolong and exacerbate a power supply shortfall in South Africa, the world’s top platinum producer and a major producer of gold.
"Supply will be tight up to 2015, and particularly so next year and in 2012, until our large new power stations come on line," Dames said.