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Johannesburg - Eskom's CEO, Brian Molefe, says the cash-strapped utility will be cash positive by 2025, telling Reuters it would be "foolish" for any privatisation to be considered just as it grapples with a host of problems.
Eskom, which the opposition and Eskom's critics often suggest should be sold off, produces virtually all of the power in Africa's most industrialised economy, but faces power shortages, political pressures and a funding shortfall of about R200bn.
"Around 2025, we will become cash positive", Molefe said adding that planned new power stations would help the utility recover.
Tariff structure
The government has said it has no intention of selling the company, which made a net profit of R3.6bn in the financial year to March, half what it made the year before.
Eskom, which once offered some of the cheapest electricity rates in the world, is battling with tariffs that do not match the cost of producing power, Molefe said and the utility is working on a proposed new tariff structure that will be presented to the energy regulator.
"At the moment it is difficult to run an organisation with the uncertainty of tariffs," Molefe said. "I will say how much are you going to give me for the next 10 years...let's agree and lock that."
Tariff increases are currently determined over a three-year period based on public consultation, with an option for Eskom to reapply to the regulator to recoup unexpected costs.
Businesses in South Africa often complain that expensive and unreliable power supplies, coupled with poor economic conditions, are affecting their performance.
Molefe said the utility was looking to raise millions through an international bond, to fund power generation projects and improve its finances.
Cost of production
Meanwhile Eskom, which mostly relies on coal-fired power stations to produce electricity, is in a dispute with Glencore's Optimum mine over the cost of the fuel.
Molefe said Eskom will not pay more than R150 per tonne when a temporary contract with Optimum ends at the end of November. Optimum, which is under business rescue, supplies Eskom with 10 million tonnes a year and has said the price is less than the cost of production.
Molefe added that in its new contracts with coal providers, Eskom would not pay for the running of mines as this did not make financial sense.
"I would just like to buy coal to fire up my power station. I don't want to get involved in capital expenditure," he said.
Eskom's generation capacity stands at more than 45 000 megawatts (MW), which it plans to increase to more than 53 000 MW in the next decade through a mix of green, gas and coal-fired plants.
South Africa is also looking to procure an additional 9 00 MW by 2025, for which preferred bidders have been identified.
