South Africa plans to create new generating firm to boost power security, what you need to know

PUBLISHED: Thu, 06 Feb 2020 15:21:23 GMT
Share

CAPE TOWN (Reuters) – South Africa is planning to create a new power generating company separate from struggling state-owned utility Eskom to boost energy security, senior officials said on Thursday.

Eskom, which generates more than 90% of the country’s electricity, is mired in financial crisis and suffers frequent breakdowns at its coal-fired power plants, forcing it to implement power cuts that have dented economic output.

Eskom’s problems have been a major concern among investors at industry conference the Mining Indaba this week.

“There is going to be a separate entity to Eskom, but the issue is not Eskom or no Eskom, the issue is security of energy supply,” Mineral Resources and Energy Minister Gwede Mantashe said on the sidelines of the conference in Cape Town.

Details surrounding the plan for the new generating company are still hazy.

Mantashe said he wanted industry to partner with the government on its formation, but it is not clear what that partnership would entail. It is also not clear which generating technologies it would employ.

Director-general in the Department of Mineral Resources, Thabo Mokoena, echoed Mantashe’s comment that the main aim of the new company would be to improve energy security but did not elaborate further.

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.