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Johannesburg - Electricity parastatal Eskom foresees a R63.3bn gap in its finances, even if the National Energy Regulator of SA (Nersa) grants it a requested 45% increase in fees per year for the next three years.
Eskom announced on Tuesday that it has requested Nersa to raise electricity prices by 45% per year from 2010 to 2012. The parastatal also proposes increases of 12% in 2013, 10% in 2014 and 7% in 2015.
The power utility said government had endorsed this approach, which was based on the smoothing of price increases.
"It's a painful but unavoidable adjustment for ensuring security of supply in the future," said CEO Jacob Maroga.
An alternative option, not recommended by Eskom, was an increase of 146% in the first year of the period.
Eskom has embarked on a capital expansion programme of about R400bn. Even if its requested increases are granted, it will still have a funding shortfall of R2.1bn in 2010, R32.7bn in 2011 and R28.5bn in 2012.
It said it would look for other funding sources, including government guarantees, to cover this shortfall.
Maroga expects Nersa to make a decision by early 2010, after which the hikes would be implemented from April.
- Fin24.com