Eskom’s De Ruyter identifies private equity as kingpin in establishing independent power

PRIVATE equity could help finance the R18bn for new, independent power generation in South Africa, said Eskom CEO, Andre de Ruyter.

Speaking to Business Day TV, De Ruyter said there was “… a need to crowd in private capital particularly into the generation sector where a number of Eskom assets are reaching the end of their lives and they need to be retired.

“Eskom doesn’t have the balance sheet to build additional capacity and we think that it’s time that we structure the electricity industry in such a way that we encourage private investment, particularly in generation.”

His comments, in which he said Eskom would not be able to assist in the process of establishing independent power, were reported by Bloomberg News and Fin24.

“There is an amount of about R18bn that needs to be invested in order to accommodate the entry of independent power producers into the grid,” he said in an interview with Business Day TV. “Now somebody needs to pay for that and it can’t be Eskom without recovering that cost in one way or another.”

The Minerals Council South Africa said in December that it wanted the licence requirement for self-generation lifted regardless of plant size. Unregulated generation is currently limited to 1MW plants. “Government should stop placing all its eggs in one basket called Eskom,” said Minerals Council CEO, Roger Baxter.

KUSILE

Fin24 also reported that Eskom had brought back a former senior manager to run the Kusile power station project.

Avin Maharaj was hired by Eskom on January 23 this year, the publication said citing an internal Eskom memo it had seen. Maharaj had left Eskom in 2017 to work at the Redondo Peninsula Energy company in the Philippines.

Like its twin station Medupi, Kusile is millions of rands over budget. It is hoped that it will be completed in 2023 – about eight years after its original completion date, said Fin24. Formerly known as the ‘Bravo’ project, just three of Kusile’s units have been synchronised to the national grid. Eventually, Kusile should consist of six units, it said.

Fin24 said scores of skilled and qualified engineers, technicians and other personnel had either been pushed out of Eskom, or jumped ship during the state capture years.

Public enterprises minister Pravin Gordhan told News24 in an interview last week, that over the years “… the quality of our operators and power station managers declined”.

In what could be interpreted as a nod to Maharaj, Gordhan continued: “… and many are overseas, running power stations in places like the Philippines,” he said.