Zuma presses the ‘power switch’
Lephalale – On Friday Eskom took the first steps towards putting its new Medupi power station outside Lephalale into operation.
President Jacob Zuma pressed the button to test the pressure in the boiler of the first unit, heralding a new phase for the R51bn power station.
The boiler was built in South Africa, using 22 000 tonnes of steel and 700km of piping. It was completed mechanically. No-one will do any further cutting or welding on it. This is the first step in integrating everything. It's a step towards operation, said Eskom chief executive Brian Dames. Medupi will eventually comprise six units which will together deliver 4 800MW of electricity. Eskom’s current total generation capacity if 41 000MW.
The first unit is expected to deliver power to the network by the end of next year and the entire project will be completed by 2018. Medupi will then be the world’s fourth-largest coal-fired and largest dry-cooled power station. It will make a sizeable contribution to relieving the pressure on Eskom’s power grid and ensure a bigger buffer between demand and supply.
The entire country will benefit from the additional generation capacity, but the mining sector and manufacturers in particular will be able to head into a new growth path, said Dames.
Various ministers attended Friday’s function, including Public Enterprises Minister Malusi Gigaba and his deputy, Benedict Martins, as well as Economic Development Minister Ebrahim Patel.
Dames said the Medupi project has had a massive impact on the Lephalale environment. According to him, the project has enabled R700m worth of contracts to be awarded to businesses in the Lephalale and Waterberg surroundings.
Eskom envisages issuing foreign bonds next year to diversify the financing of its R500bn expansion programme.
Paul O’Flaherty, Eskom’s financial director, says the electricity giant is now positioned to allocate around R65bn a year to its capital expenditure programme.
The current programme extends to 2018.
The bonds envisaged for next year will be in US dollars, euros or yen, depending on market requirements. More or less $1.75bn will be issued, O’Flaherty said on the occasion of testing Medupi’s first boiler in Lephalale.
“Asian markets show continuous interest. Our problem is what is likely to happen in the South African bond market in light of the events related to Sanral and the e-toll tariffs debacle,” O’Flaherty told reporters. – Bloomberg
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