Johannesburg, South Africa — ESI-AFRICA.COM — 29 June 2011 – South African national power utility Eskom says it has more than doubled its full-year profit owing to higher tariffs, and that it will meet power demand during the peak winter period, despite tight supplies.
State-owned Eskom, which supplies 95% of South Africa’s power, said profit in the year to the end of March rose to R8.36 billion, up from a restated R3.62 billion the previous year.
“Eskom is well on track to being financially sustainable. That is driven extensively by the fact that we now have tariffs moving towards cost-reflective rates … allowing us to invest back into the business,” said chief executive Brian Dames.
Eskom was granted an annual increase in power tariffs of around 25% for three years, and is likely to apply for two more increases of this magnitude.
Cash-strapped Eskom has been struggling to raise the R450 billion it needs to build power plants over the next six years to avoid a repeat of a crisis that forced mines to shut for days in early 2008 at a cost of billions of dollars. It has secured more than 70% of its funding needs and aims to find the rest in the course of this financial year.
It secured funding from several lenders and raised US$1.75 billion from an international bond issue, though another such issue was not on the cards in the short to medium term, it said.
Dames said the utility was on track to add 12,000MW to the grid by 2019, which should temporarily relieve tight supplies in the world’s top maker of platinum and ferrochrome.