Eskom coal-fired plants to be resuscitated and concessioned to private sector

A corporate vehicle outside the Kusile coal-fired power station, operated by Eskom.

A CONSORTIUM consisting of international energy experts will review which of Eskom’s coal-fired power stations can be resuscitated ahead of their concessioning to the private sector, said Bloomberg News.

This is one of the measures unveiled in South African finance minister Enoch Godongwana’s National Budget in Parliament today as Government sought to lean on business in its efforts to bail out power utility, Eskom.

Eskom will receive R254bn in debt relief from the government over the next three years, provided it brings in private partners to help operate its plants and the electricity transmission network, said Bloomberg News.

The cash injection will enable Eskom to accelerate plant maintenance and improve and expand its transmission and distribution network. But the plan hinges on Eskom implementing a tariff hike approved this year of 18.7%. President Cyril Ramaphosa had previously asked Eskom to delay the implementation of the new tariff.

The debt relief is dependent on Eskom meeting performance standards which is where private sector involvement comes in. In terms of the concessioning plans, certain coal-fired plants will be maintained and operated by private sector firms.

Eskom’s debt burden stands at R423bn almost 80% of which is guaranteed by the government. The guarantee framework expires at the end of next month, after which the company will no longer be able to draw down on guarantees, said Bloomberg.