President Cyril Ramaphosa is considering whether to back a proposal to improve troubled Eskom’s debt terms by closing polluting coal plants early to make way for renewable energy.
A special purpose vehicle would lower interest rates paid by the state-owned utility by accelerating the closure of coal-fired stations, according to a person familiar with the matter who asked not to be named because the information isn’t public. The plan was submitted to Ramaphosa by a task team, which has suggested a range of options for rescuing Eskom, the person said.
The power company is struggling under R440-billion of debt and expected to report another loss for the financial year. Ramaphosa said last week that his government would soon give Eskom “a significant portion” of the R230-billion it needs over the next decade to remain solvent.
Development finance institutions are interested in the Eskom debt plan, which would unlock as much as R200-billion of climate change mitigation funding at discounted interest rates, City Press reported last month, citing Grove Steyn, a member of the task team. South Africa currently generates about 90% of its electricity from coal. — Reported by Paul Burkhardt, (c) 2019 Bloomberg LP