Eskom needs more money for Kusile

Johannesburg - Eskom seeks financing, in addition to its existing loans, to complete a coal-fired plant necessary to ease power shortages, a senior manager at the utility told Reuters.

Eskom plans no new projects until it completes the Kusile plant, said Zaheer Khan, senior manager for energy planning and market development, in an interview on Wednesday.

Eskom has said it will be able to meet demand this year but will face tight supply in 2011 and 2012 without new capacity.

The utility said in December it had signed loans totalling $917.5m from German and Japanese banks as well as obtaining some funds from South African banks. The loans are repayable over 12 years, starting six months after units of the plant are commissioned, it added.

Khan said the utility was looking for more financing to complete the 4 800 megawatt Kusile plant, without saying how much was needed.

"Once the funding constraints are relieved, perhaps that will give us some options to either build other coal, nuclear, renewable energy or any other form of power stations," Khan said, adding that no new projects would be considered until the plant is built.

Eskom expects its annual coal requirements to rise to 140 million tonnes by 2018 from the current 130 million tonnes, he said.

The utility has been reluctant to build a plant in the coal-rich Waterberg area of South Africa due to poor water infrastructure there.

Waterberg, home to huge untapped coal reserves, is touted as the future of South Africa's coal mining industry.

South Africa's national grid nearly collapsed in early 2008, forcing some mines and smelters to shut down and costing Africa's biggest economy billions of dollars.

- Reuters