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AfrElec NEWS IN BRIEF AfrElec

ESKOM

Eskm court victory unlikely

to improve credit profile

Eskom’s recent victory in the South African
high Court over ZAR69mn in tariff increases
over three years is good news for its future
revenues, although Fitch Ratings has warned
this could mean lower government support in
future years.
more expensive electricity generated from in the electricity distribution franchise. However, the court decision is unlikely to
inefficient small-scale oil-fired and diesel resolve the country’s continued debt crisis,
generation and improve the reliability of especially the government’s propping up of
electricity services. state-owned companies. There, Fitch said this
“West Africa has huge potential for clean GENERATION week that Eskom’s credit profile is unlikely to
and green energy generation, which countries be affected.
can unlock and pool together to bring lower Nigeria records 5,377MW of Eskom can now recover ZAR69bn through
cost electricity to communities and help tariff increases over the three-year period.
create jobs,” Ousmane Diagana, the World generation This judgement follows previous judgements
Bank Vice-President for Western and Central in March 2020 and in June 2020, also in
Africa. “ The Transmission Company of Nigeria (TCN) favour of Eskom.
said the power sector had recorded an all-time Eskom receives various forms of
5,377MW peak generation. government support, including direct equity
In a statement, the electricity transmission injections (ZAR56bn agreed for FY21)
INVESTMENT agency said the new record was achieved on and support for debt issuance under the
August 1. Guaranteed Framework Agreement.
Nigeria finalises funding for recorded on the national grid in 2019, which any tariff increases implemented as a result of
Fitch Ratings said that it is possible that
This surpasses the previous 5,375MW
Siemens improvement deal shows an increase of 2.8MW. dispute settlements - resulting in stronger cash
flows for Eskom - could lead to an offsetting
“The Transmission Company of Nigeria
The Nigerian Electricity Improvement hereby states that it has recorded an enhanced decrease in government support in future
Scheme, which is led bySiemens and the all time peak generation of 5,377.8 MW on years, particularly in the current economic
Nigerian government, moved a step closer 01/08/2020 at 21:30hrs,” the TCN said. environment.
to being realised as the Federal Executive “The new peak, which surpasses the High contingent liabilities that are related
Council as approved the payment of NGN6bn previous one recorded on 07/02/2019 by to state-owned enterprises such as Eskom,
to the company. 2.8MW, was successfully transmitted to together with the absence of a clear medium-
A breakdown of the money shows that the distribution load centres nationwide.” term plan for government debt stabilisation,
sum of NGN6bn as offshore and NGN1.708bn Data from the country’s electricity system are weighing on South Africa’s rating.
onshore component represents Nigeria’s operator puts the grid generation installed This is unlikely to change, in Fitch’s view,
counterpart funding for the power deal capacity at 12,954MW, while the available even if support for Eskom can be reduced as a
with Siemens AG, which was signed by the generation capacity is 7,652MW. result of the tariff decisions.
Nigerian and German governments in 2019. The transmission wheeling capacity is put FITCH
Zainab Ahmed, the minister of finance, at 8,100MW. However, due to constraints, the
budget and national planning, told State TCN cannot wheel more than 6,000MW, as an
House correspondents at the end of the overload might lead to system collapse since HYDRO
meeting that the council ratified the the power distribution companies (DisC0s)
President’s anticipatory approval for the also do not have the capacity to take more Tanzania appoints
funding. than 5,000MW.
She said the ratification was done based on According to the latest quarterly report consultants for hydro
a memorandum she jointly presented with the of the Nigeria Electricity Regulatory
Minister of Power, Saleh Mamman. Commission (NERC), the regulator said projects
In July 2019, the Federal Government and it is working to address the DisCo-TCN
Siemens signed a Letter of Agreement on the interface bottlenecks to free up part of the Multiconsult Norge AS, a Norwegian
Nigeria Electrification Road Map after the stranded generation capacity by addressing consulting engineering firm has recently
President and the German Chancellor, Angela the technical constraints inhibiting the flow of been chosen by the Tanzania Electric
Merkel met on August 31, 2018, in Abuja. energy. Supply Company Limited (Tanesco) to
Ahmed said the council discussed the provide consulting services regarding the
first phase of the project which she said was hydroelectric projects of Rumakali and
designed to include 23 transmission initiatives Ruhudji in Tanzania. Multiconsult Norge AS
as well as 175 separate transformative projects léwill is working on this project with Norplan

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