State-owned power utility Eskom’s approved capital investment programme, which includes the capacity expansion programme, of about R450-billion and R500-billion over the next six years is the largest individual stimulus to the South African economy.
Eskom acts as a leading indicator of investment and job creation for sectors such as mining and energy-intensive manufacturing, whose businesses depend on reliable energy supply.
The programme started in 2005 and the investment in new generation capacity is progressing according to plan, Eskom said on Monday.
To date, more than 5 000MW have been completed of the programme to add 17 000MW of new generation capacity by 2014.
Releasing its annual results for the year to March, Eskom said it would spend R60-billion, or R10-billion in each of the next six years, to strengthen, refurbish and expand its distribution network.
A further R13-billion would also be spent on transmission projects, bringing the total amount spent on this aspect of the business to R27.4-billion between 2005 and 2017/18.
This was in addition to the R385-billion build programme, which is aimed at increasing the country’s generation capacity.
“Our build programme is on track and will deliver a more robust power system for South Africa in future,” said Eskom chief executive Brian Dames.
The utility said its largest projects, Medupi, Kusile and Ingula, were all proceeding according to plan.
At Medupi, already 42.4% of the estimated total cost of R98.9-billion has been spent, while Kusile, which will cost R121-billion, has already had 20.6% of its costs committed.
Medupi’s first unit was scheduled to come on stream in 2012/13, with capacity being added through to 2015/16, while Kusile would be brought on stream from 2014 through to 2018.
Ingula has already spent 36.7% of the R21.4-billion that will be spent.
In the meantime, the return to service of the mothballed coal-fired power stations was progressing well and should be completed within a year.
“One of Eskom’s most significant achievements of 2010/11 has been to move from a funding gap to a funding plan,” said Dames.
“We are implementing this R300-billion funding plan and are confident that the financial building blocks in place will enable the capacity expansion programme to be completed over the next six years,” Dames said in Eskom’s annual report.
About 71% of this funding has already been secured and will support the construction of the three large new power stations — Medupi, Kusile and Ingula. — I-Net Bridge