Eskom Holdings SOC Ltd said it will give the transmission unit that it’s transforming into a separate entity a R39.9 billion ($2.6 billion) loan to make sure it can complete projects and be financially viable.
The loan will be guaranteed by the transmission unit’s assets with Eskom’s creditors able to call on them if the utility doesn’t pay them, it said in a presentation to creditors on Thursday. Government guarantees will remain in place. The company will be known as the National Transmission Company of South Africa, or NTCSA.
The South African state power utility, which is R396 billion in debt, is separating into transmission, generation and distribution units that will operate as separate entities in a bid to improve its operational and financial performance. The company has subjected South Africa to intermittent power outages since 2008.
The company is expected to buy 218,000 gigawatt hours of power annually, with 77% of that coming from Eskom power plants, 19% from independent generators and 4% from imports. In turn it will export 5% of the 212,000 gigawatt hours it expects to sell and the rest will be sold within South Africa. “The resulting specific transmission tariff should be sufficient to enable NTCSA to run its operations in a manner that is cost-efficient,” Eskom said in the presentation.
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