Investment body won't say no to nukes

The Public Investment Corporation would consider investing in the proposed nuclear build programme, if a sound business case was presented. (Gallo)

The Public Investment Corporation would consider investing in the proposed nuclear build programme, if a sound business case was presented. (Gallo)

The Public Investment Corporation chief executive Elias Masilela was speaking at a breakfast held by the Cape Town Press Club, on Friday.

The PIC manages R1.3-trillion in assets on behalf  state entities, and its largest client is the government employee pension fund (GEPF).

The PIC would not shy away from such a proposal, just because it was "complex", said Masilela. Although the corporation did not have the in-house ability to assess a nuclear project, it would source the necessary skills to make a decision, he said.

"We don't have expertise within the PIC to evaluate such a project," said Masilela "But if somebody puts a sound business plan in front of us, a business plan that shows good return, that shows good social benefit, that shows economic productivity going forward, we shall look at it."

Any decision would be a function of the proposal put before the PIC, and whether such a venture met with its investment mandate, he noted.

In a Cabinet statement last week the government confirmed power utility Eskom would be the owner and operator of the six nuclear power stations that will form part of the proposed nuclear roll out.

This is the strongest indication yet, that the state will go ahead with its intended fleet procurement of nuclear power, despite concerns that this could prove too expensive for the country.

The National Development Plan, the country's 30-year vision for the country, called for an in-depth investigation into the financial viability of nuclear as a future energy source for the country.

Alongside the nuclear procurement programme, which could cost between R400-billion and over R1-trillion, the government is rolling out an infrastructure programme that will require investment in the order of R4-trillion.

The PIC will play a major part in supporting this, Masilela said.

The PIC would  "likely support most, if not all of the government infrastructure programmes".

This was, however, not due to added pressure by government for the PIC to invest in its schemes, he said.

Instead it was by virtue of the fact that the company's investment mandate, through its developmental investment programme dovetailed with government plans.

"It so happens that there is a fortunate convergence of views between what the government wants to do and what the GEPF expects us to do, which is defined in the developmental investment programme," he said.

"[It is] not because of what government wants but because of what our mandate dictates."

The PIC's strategy includes funding developmental investments that promote economic efficiency, create jobs, and reduce poverty. Masilela said that roughly 10% of its book was already directed to what could be termed developmental investments.

Masilela also argued that the company needed a greater role in the formulation of government policy.
He cautioned that the company could not "invest the country out of trouble". There needed to be a better understanding of how government policy impacted its holdings.

The company needed to be able view policies in terms of how they would effected the economy in the both the short term and the long-term.

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