Business Day

Eskom reserves boosted as Medupi and Kusile units plug in

- Sikonathi Mantshants­ha Deputy Editor Financial Mail

Half of Medupi power station is operationa­l and a third of Kusile station is adding electricit­y to Eskom’s total generating capacity, the utility says.

The five additional generating units at the power stations add to Eskom’s reserve margin of about 20%. The two power stations will deliver a combined 9,600MW of power when completed in 2022. The two coalfired power stations would cost an estimated R310bn when complete, Eskom said.

“Unit 1 of Kusile is now operating at full capacity, and we aim to bring it to commercial production soon,” Prish Govender, acting executive responsibl­e for new capital infrastruc­ture at Eskom, said on Thursday.

“Unit 2 of Kusile has also been synchronis­ed into the grid and will reach full production within the next few months,” Govender said.

The station near Emalahleni, Mpumalanga, is the latest in Eskom’s capital investment drive. It would cost about R165bn, Govender said.

At the Medupi facility under constructi­on outside Lephalale, Limpopo, two units have already reached commercial production, while the third unit has also been synchronis­ed into the national grid. Govender said the unit would also reach full commercial production during the current financial year.

This means half the R145bn facility under constructi­on since August 2007 is now contributi­ng to Eskom’s generation capacity, helping the utility to avoid power rationing.

Eskom also completed the constructi­on of the 1,332MW Ingula pumped storage facility in the Drakensber­g earlier in 2017. Like the other power stations, completion of the Ingula hydro power station was delayed and over budget.

The additional capacity means Eskom now has more than 5,000MW of excess electricit­y for sale.

The internatio­nal norm is to have 14% spare capacity.

In addition to hastening domestic connection­s of new consumers to the grid, the utility has had to accelerate electricit­y exports to find new markets for its power.

As part of its plan to increase sales to neighbouri­ng countries, Eskom signed an agreement to sell electricit­y to the Botswana Power Corporatio­n in April while NamPower, its Namibian counterpar­t, signed in March.

The utility is owed millions in unpaid bills by Zimbabwe.

Eskom still needs funds to complete the infrastruc­ture rollout. It signed a loan agreement with China Developmen­t Bank on Thursday.

According to this agreement, Eskom will borrow $1.5bn from the state-owned bank over the next five years.

The funds are earmarked for the Medupi power station.

Due to poor governance and allegation­s of corruption at its top leadership, Eskom has had to rely heavily on developmen­tal finance institutio­ns for funding.

More than half the funds it needs over the next five years will come from developmen­tal finance institutio­ns.

 ?? /File picture ?? Funding: Medupi power station in Limpopo will benefit from a $1.5bn China Developmen­t Bank loan.
/File picture Funding: Medupi power station in Limpopo will benefit from a $1.5bn China Developmen­t Bank loan.

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