Pension money may fund Kusile

Cape Town - The government pension fund could be asked to become a shareholder-partner in Kusile, Eskom’s second new coal-fired power station.

This is only one of the "more than 50 options" currently being investigated to finance Eskom’s enormous R190bn budget deficit up to 2017.

All of these options will be presented to Eskom's board at the end of this month, explains the parastatal's financial director Paul O’Flaherty who, at the invitation of the portfolio committee on public enterprises, was required to present Eskom's long-awaited funding model to the committee.

The Public Investment Corporation (PIC), which manages some R800bn worth of assets for the Government Employees’ Pension Fund, is already the biggest investor in Eskom bonds.

Over the next three years Eskom’s budget funding deficit runs to R111bn. The utility's total projected capital expenditure up to 2017 will be more than R600bn.

O’Flaherty and Eskom chairperson Mpho Makwana admitted that no plan existed as yet for post-2017.

Draft solutions currently being investigated by global banker JP Morgan (regarding Eskom’s entire funding model) and Credit Suisse Standard Securities (regarding share partnerships in Kusile) include more domestic debt and shareholder loans, involving the government pension fund, the Industrial Development Corporation (IDC) and the Development Bank of Southern Africa (DBSA).

JP Morgan and Credit Suisse must inform Eskom of their findings before the end of May.

A further consideration is to engage partners in all of Eskom’s power stations – not only in Kusile as initially proposed.

The World Bank may be approached for additional finance to develop renewable energy.

These options are subject to board and Cabinet procedures.

- Sake24.com

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