Share

Nuclear still on track, despite S&P warning on Eskom

Pretoria – Plans for a nuclear build programme are still on track and the question of affordability is yet to be determined, said new Finance Minister Malusi Gigaba.

He was speaking at a press briefing following Standard & Poor’s decision to downgrade South Africa’s sovereign rating to junk status.

Among the concerns raised by S&P was the country’s contingent liabilities. State-owned enterprises will continue to need government support, S&P said in its review. Eskom, the procurer of the nuclear build programme, is expected to require guarantees of R350bn. This is 7% of the country's gross domestic product for 2017.

“We estimate Eskom will have used up to R300bn of this framework by 2020.”

Gigaba in turn explained that the nuclear build programme will be implemented at a scale and pace the country can afford. He also said the programme is part of government’s attempts to diversify the energy mix and make it environmentally friendly in the light of climate change.

He added that the economy is unable to rely on energy produced by renewables like wind and solar.

The Integrated Resources Plan 2010 has made room for government to model different scenarios for the energy mix. “At present, no firm decision has been taken except that 9.6 GW generating capacity is required. No firm decision has been taken on whether the country can afford nuclear, that is premature and we will answer at the right time when all work is done," said Gigaba.

Cost of nuclear

At a press briefing on Saturday, Treasury director general Lungisa Fuzile said that even though Eskom is the procurer of the nuclear build programme, if the power utility defaults on its debt it will still be Treasury’s responsibility to foot the bill.

READ: Treasury still crunching numbers for nuclear

“If theoretically, they were to over commit themselves and be unable to service the debt, it becomes government’s business.” How Eskom borrows and how it finances that debt is still very much government’s concern, Fuzile explained.

Read Fin24's top stories trending on Twitter:


We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.5%
Rand - Pound
23.95
-0.3%
Rand - Euro
20.51
-0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.5%
Platinum
895.30
-0.2%
Palladium
991.47
-1.0%
Gold
2,196.11
+0.1%
Silver
24.46
-0.8%
Brent Crude
86.09
-0.2%
Top 40
67,818
+0.2%
All Share
74,028
+0.2%
Resource 10
56,225
+1.0%
Industrial 25
103,464
+0.2%
Financial 15
16,455
-0.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders