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Eskom options on the table
SOUTH AFRICA
THE South African government has said it is considering how it will rescue Eskom a er Pres- ident Cyril Ramaphosa con rmed last month that the government would bail it out to the tune of at least $16bn.
Options include a debt for-for-bond swap and moving the debt to a special purpose vehicle.
“We are looking at which option is best both in terms of scal costs and support for the reform process,” said Ian Stuart, acting deputy director general for the National Treasury’s budget o ce.
“A switch to South African government bonds will be looked at, but we have to con rm the legalities of each option and implications for ratings agencies.”
is would involve taking some of Eskom’s debt o its balance sheet – a welcome move for the debt-crippled utility – and moving it onto the government’s books or into a special purpose vehicle, Stuart said.
His reference to the rating agencies is cru- cial, as the country’s last investment grade credit rating, from Moody’s, is far from secure. Other agencies have already consigned South Africa to
junk status.
Ramaphosa said last month that the state’s
plans to bail out Eskom, which would involve at least bringing some of the 10-year, $16bn spend- ing allocations forward to shore up the com- pany, would not endanger the country’s public nances or economy as a whole.
As well as supplying power, Eskom says it must make considerable new investment to cope with an expected 50% rise in coal prices, inad- equate tari s, the $21bn cost of reducing emis- sions and a 17% rise in maintenance costs over the next ve years.
Meanwhile, there is some good new for Eskom as Zimbabwe con rmed this week that it had paid $10mn to Eskom for power imports, although there is still $20mn outstanding.
The Zimbabwean government announced the payment a er Eskom said at the end of June that it had not received any money. Zimbabwe currently imports around 50 MW from South Africa. State-owned utility Zesa Holdings, cur- rently now owes a combined $73mn to South Africa and Mozambique for power imports.™
RENEWABLES
$18bn finance for Kenyan pay as you go
KENYA
KENYA’S solar products manufacturer and pay as you go power provider d.light solar has secured $18mn of debt nancing from a group of ethical green energy lenders.
e money will be used to expand the com- pany’s o er of o -grid solar technology and dig- ital and pay as you go nancing solutions.
Kenya aims to achieve universal access to power by 2022, and solar mini-grid and domes- tic power systems, the type of products that d.light provides, form a crucial part of this policy in rural and urban areas.
e funding consortium includes Swiss pri- vate equity investor responsAbility Investments, SunFunder, DWM and SIMA. e loan builds on d.light’s existing debt nancing of $50mn.
To date, d.light solar technology has brought electricity to 100 million people, the vast major- ity of who are o -grid and would otherwise have not access to power.
Its solar and battery technology has also gen- erated 171 GWh of power since 2007.
e money would allow d.light solar to intro- duce new products, enter new markets and reach even more customers.
“The investment underpins the catalytic role of the company in making available clean, reliable solar energy solutions through the pay as you go business model that enables o -grid
customers to pay for solar lighting products in a ordable instalments using various mobile pay- ment options,” said CEO Ned Tozun.
Africa’s booming pay as you go power sector has attracted considerable sums from ethical investors looking to back both communi- ty-based social enterprise and more commercial, urban-based solar providers.
“Financing d.light’s innovative pay as you go solar business, particularly in Africa, allows our funds to ensure people gain access to energy in a way that safeguards our climate. As an exist- ing lender, responsAbility is excited to be part of d.light’s further expansion,” said responsAbility Investments’ Antonia Schaeli.
Avi Jacobson, senior investment officer at SunFunder, added: “SunFunder is proud to deepen its long-term relationship with d.light. It is inspiring to work with an industry leader that positively impacts so many lives globally.”
SunFunder is an experienced player in Kenya, and in June announced it would manage a $30mn solar debt fund, part of the Kenyan gov- ernment’s Kenya O -Grid Solar Access Project (KOSAP).
is aims to form a crucial part of the coun- try’s National Electrification Strategy, which aims to ensure universal access to electricity by 2022.™
Week 26 03•July•2019 w w w . N E W S B A S E . c o m P7