Investing in modernising Eskom fleet a “thankless task” for investors, says Futuregrowth

INVESTING in the modernisation of South Africa’s ageing coal fired power stations would be “a thankless task”, said Andrew Canter, chief investment officer of asset manager Futuregrowth.

“You’ll end up as the majority holder of a very defunct power plant in need of major capital expenditure, or in some sort of partnership with Eskom where they remain as the shareholder,” Canter was quoted as saying in an article over the weekend in Business Times. “To wade into that as a private equity investor would be a thankless task.”

South Africa’s electricity minister Kgosientsho Ramokgopa has called for “bold and decisive” private investment in Eskom’s ageing plants to alleviate the electricity crisis.

Ramokgopa and energy minister Gwede Mantashe are also pushing to reopen Komati coal power station in Mpumalanga, which they say was decommissioned prematurely and has another three to five years’ life in it, said Business Times.

“In an environment where you do not have alignment, where there are agendas for political aspirations such as job preservation or patronage networks, it’s a non-starter. Why would you do that? Be in partnership with a failing or sick SOE, and a political football?,” Canter said.

Business Times said that pumping fresh capital into the refurbishment of coal-fired plants would be just as problematic for institutional investors, with end investors such as retail unit trusts and pension funds telling them.

“We need to stop channelling money into the old stuff and start channelling money into the new stuff, wind, solar, hydro, even nuclear,” the paper quoted Canter as saying. “That’s where money wants to go. Towards clean, not towards dirty.”

In 2016, Futuregrowth announced they would not fund any new coal-fired plants after government proposed procuring two of them as part of a broad energy strategy. Others in the private sector, including the banks, have since taken the same position, said Business Times.


  1. So here’s an idea Andrew… investors should repurpose the old coal-fired stations as biomass stations.

    1) The EU has declared biomass to be green so SA power consumers will avoid the EU CBAM tariffs.
    2) In youth, trees sequester more carbon to the rhizosphere (soil) than to the wood, so growing and cutting down trees quickly sequesters relatively more carbon than is released when burning i.e., done properly you can actually see carbon drawdown.
    3) While waiting for their forests to grow, SA coal miners can harvest alien vegetation (black wattle) on their lands. Also while waiting, Transnet can earn a backhaul rate on the RBCT line by bringing up excess biomass from KZN.
    4) Trees are great at filtering out nasty AMD water and transpiring it as pure fresh water. Plus, mini-forests in Mpumalanga will act as a biotic pump to bring rain inland from the lowveld to the highveld i.e. they will bring more rain than the underground water they soak up. The mielie farmers will love it.
    5) Eskom’s low grade coal is almost an exact match for the calorific value of many indigenous Mpumalanga trees. Plus, wood ash = “pot ash” = potassium, which farmers will realise as the ‘K’ in the ‘NPK’ of all fertilizers. So we can deal with the residues of biomass far more easily than we can with coal. And since biomass is mainly from wood chips and other sawmill residues, we can further avoid carbon emissions by using the entire tree, and also composting the smaller residues.

    There are huge new revenues streams for coal miners in this thing called the “Just Transition” that everyone seems to be talking about, but no-one seems to be doing anything about.

    Lastly, it’s so bizarre that we have all been brainwashed into treating carbon dioxide as the breathe of Satan. Nature has co-evolved symbiotically with CO2 for millennia and knows how to deal with it. What she doesn’t know how to deal with is microplastics and toxic chemicals. But hey, dealing with those things means making actual lifestyle changes so….. nothing to see here, carry on regardles…. and remember to offset your carbon (and pay those who have monetised the air) like a good little boy.


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