South African state power firm Eskom has appointed JP Morgan Chase and Swiss bank Credit Suisse to help raise funds for expansion, Business Report said on Monday.
Eskom plans to raise more than $60-billion to address a chronic electricity shortage in Africa’s largest economy.
“JP Morgan Chase …was appointed on Thursday to come up with an overall fund plan for Eskom. Credit Suisse … was selected as transaction adviser for the sale of an equity stake in the Kusile coal-fired plant,” the paper said.
Business Report quoted Eskom’s finance director, Paul O’Flaherty, as saying JP Morgan would examine 50 proposals to help the power utility raise funds from the bond markets to refinance existing plants.
The World Bank on Thursday approved a controversial $3,75-billion loan for Eskom to develop a coal-fired power plant in South Africa.
Kusile and Medupi are both planned to have capacities of 4 800MW.
ANC plans to sell stake in Hitachi Power
Meanwhile, the ANC’s investment firm, Chancellor House, is planning to sell its 25% stake in Hitachi Power, which won a contract to supply boilers to power Eskom’s two new coal-fired power stations.
“We are planning to exit within the next six weeks — but no one must hold us to six weeks because you don’t know what will happen in a commercial transaction,” ANC treasurer Mathews Phosa said on Sunday.
The World Bank approved the controversial $3,75-billion loan to develop a coal-fired power plant in South Africa despite the lack of support from the United States, Netherlands and Britain.
Opposition parties had called for the World Bank to make the loan conditional on the ANC divesting its stake in Hitachi, a subsidiary of Japanese manufacturer Hitachi, so that the ruling party would not benefit from it.
Helen Zille, leader of the opposition party DA, opposed the loan, saying it would enrich the ANC. Zille lobbied the US, the UK as well as the World Bank itself not to support the loan request.
Chancellor House is owned by a Trust with no beneficiaries.
“The chairperson of the trust [Popo Molefe] has been briefed [about the planned sale] and there is consensus between us and him,” said Phosa.
The loan will finance the Medupi power station — Eskom’s first such plant in more than two decades — and the country’s first large wind and concentrated solar power projects.
Medupi is part of several new power stations planned to boost generation capacity to satisfy fast-rising power demand.
South Africa’s national grid suffered a near collapse in early 2008, costing South Africa billions of dollars in lost output across all sectors as Eskom enforced rolling blackouts. — Reuters