Johannesburg - Eskom is to approach the US Bond Markets for funding in a bid to raise capital for its expansion programme which includes three of its coal-powered stations - Medupi, Kusile and Ingula.
The power utility had in the past received a R21 billion loan from the African Development Bank and R28 billion from the World Bank for Medupi, but still needs more to ensure all three power stations were up and running by 2017.
Speaking to journalists on Monday, Eskom Chief Executive Brian Dames said while it was expected to take substantial efforts from all stakeholders to overcome the country's rapidly growing electricity demands, Eskom needed to take a leading role to prevent another gloomy picture of load-shedding in the country.
Medupi is expected to be up and running by the end of 2012, while operations at Kusile may follow four years later.
"The next seven years will be very tight beginning next year and this will mean we have to maintain and maximise the efficiency of our existing assets as well as ensuring delivery of build programme," he said.
Funding and partnership with government, business and several stakeholders will be necessary to deal with the demand that will be further increased by South Africa's expected future economic growth.
South Africa's power reserve margins had dropped from 24 percent in 2000 to about 10 percent in 2008, increasing marginally to 15 percent this year.
Ideally, the country would like to keep its reserve margins between 15 and 19 percent, with officials saying below 12 percent margins posed a threat to the national grid.
Strong economic growth over the years had caused electricity demand to outstrip supply, while underinvestment in capacity resulted in low reserve margins.
More than 70 percent of South Africans had access to electricity as compared to only 30 percent in 1994. Earlier this year, the National Energy Regulator granted Eskom a tariff increase of 24.8 percent.
But on Monday, Dames said the tariffs were insufficient to build up reserves to fund the necessary capital expansion capital to meet the projected growth of the South African economy.
The sustainability of Eskom, as well as national security of electricity supply over the next seven years depended on effective management of the funding supply for the current and future build programme, he said.
"To this end, we have developed a cash flow, income statements and balance sheet forecast that considers the implication of the build programme and capacity additions to the business over the next seven years".
He said it was a relief that government, as a major shareholder, was also embarking on plans to address the challenges faced by the country's energy sector. This after President Jacob Zuma said on Sunday that government is to spend over R800 billion on energy infrastructure over the next few years.
Zuma said government was looking for funding solutions for Kusile power station and that part of the R800 billion covers Eskom's R385 billion for expansion. It is estimated that electricity demand is set to double in the next 20 years, hence the move to bring back out-of-commission power stations.
