Eskom hopes to tap local market

Financial director Bongani Nqwababa told Sake24 that the global credit crunch is far from over.

"Eskom's main source of funding during this period will therefore have to be in the domestic market, in the form of Eskom bonds and the R60bn government shareholder equity."

Nqwababa explains that Eskom has three major risks to cope with: "A rise in the cost of equipment, the impact that the Moody's downgrade had on Eskom's access to capital markets, and appropriate future tariff increases."

Nqwababa is not too concerned about Eskom's liquidity. He reckons Eskom should not have a cash-flow problem in the current financial year which ends on 31 March 2009.

Liquidity

"Until financial year-end we'll have sufficient liquidity to meet our obligations. That is chiefly thanks to our present cash resources, local bonds that have been issued, export credits, and funds made available to Eskom by global development financiers."

Neither would it appear that developments in the national cabinet give Eskom any sleepless nights.

Public Enterprises Minister Brigitte Mabandla was appointed to the post only last week, replacing Alec Erwin. Her ministry is one of Eskom's most important role-players, and media speculation has been that Eskom's infrastructure projects could get behind as a result of the ministerial change.

But Eskom spokesperson Fani Zulu says there is no reason why Eskom's projects should be affected.

"The technical teams seeing to Eskom's interests have not changed. These individuals have been involved from the start and are still involved.

"The biggest challenge will be getting the new minister up to speed. No delays are expected in any of Eskom's projects because of the appointment of a new minister."

Zulu also says that Eskom will make an announcement about its nuclear power generation plans before the end of the year.

- Sake24