Page 12 - AfrElec Week 26

AfrElec NEWS IN BRIEF AfrElec

INVESTMENT TARIFFS To this regard, the DisCos reportedly
admitted that they were not well prepared for
Eskom turns to sukuk Nigeria stalls tariff July 1 the planned hike in tariffs even though they so
much desired the increase.
market hike going to be any increase in the tariffs on
“The agreement here is that there is not
South Africa’s Eskom plans to issue a ZAR1bn Electricity distribution companies in Nigeria July 1st. The Speaker and I, we are going to
($58mn) sukuk bond as it tries to diversify (DisCos) have agreed to suspend the planned take appropriate action and meet with the
funding sources to reduce borrowing costs. increase in electricity tariff after a meeting president.
Eskom has appointed a lead arranger “to with the National Assembly leadership.
work towards establishing time lines for the The DisCos reportedly agreed to suspend
issue,” spokesman Sikonathi Mantshantsha the increase till the first quarter of next year
said, Bloomberg reported. while the leadership of the National Assembly INVESTMENT
The utility has about ZAR450bn in debt has promised to meet with President
and no current plans to ask the government Muhammadu Buhari on the issue. EU, EBRD launch North
for additional cash injections. The DisCos, however, said if the planned
The company’s funding plan “requires hike is eventually deferred till next year, the Africa green finance
sizable funding that can provide government should continue to bear the
diversification and longer tenors at reduced difference in the present tariff and what was initiative
finance costs,” Eskom said in a request for considered as the appropriate tariff.
proposals posted on the National Treasury Details of the meeting were made known The EU and the European Bank for
website. “Eskom has assessed the viability in a statement by Ola Awoniyi, the media aide Reconstruction and Development (EBRD) are
of an innovative local-currency South to Senate President Ahmad Lawan. increasing support for renewables and other
African-based Sukuk funding solution that According to the statement, Mr Lawan; green investments in Egypt, Morocco and
would enable Eskom to further develop its Speaker of the House of Representatives, Femi Eastern Partnership countries of Armenia,
borrowing plan.” Gbajabiamila and other principal officers Azerbaijan, Belarus, Georgia, Moldova and
Shariah-compliant bonds have been of the two chambers met at the National Ukraine.
considered as a funding source by Eskom Assembly with the chief executives of the The EU will provide EUR61.3mn in grants
since at least 2012. It said two years later that it government’s electricity regulatory body and to support three EBRD programmes to help
would watch the South African government’s those of the DisCos across the country and businesses in these markets invest in energy
debut sukuk issuance as a barometer for future succeeded in convincing the DisCos to defer efficiency, cut emissions, introduce green
funding plans. While the government has sold the planned hike. technologies, support the circular economy
one dollar-denominated sukuk, it hasn’t issued lso in attendance were the chairmen of the as well as improve legal frameworks for clean
one in the rand market. committees on power from the Senate and energy investments.
South Africa sold $500mn of Shariah- House of Representatives. In Egypt, a EUR24.8mn grant from the
compliant bonds in 2014 at a 3.9% profit rate, The lawmakers noted that the timing of EU will support the EBRD’s Green Energy
at the time its lowest-cost dollar bond yet, the planned hike was wrong even though they Financing Facility.
according to data compiled by Bloomberg. had not much issue with the need to introduce The facility focuses on supporting energy-
Investors bid for $2.2bn of the debt, which a cost reflective tariff for the power sector to efficient and renewable energy investments
matured this month. attract the much needed investment. through local financial institutions that will
lend to private companies.
In Morocco, the partnership will provide
EUR21.1mn for the GEFF to enable local
businesses to invest in renewable generation
and other green technologies.
EBRD policy and partnerships vice
president Pierre Heilbronn said: “Our strong
cooperation with the EU will bring concrete
benefits for the environment in the countries
where we jointly provide climate finance and
support.
“On top of our investments, we will also
focus on improving the regulatory framework
for such green investments to develop a
sustainable market for climate technology in
the region.”
EU commissioner Oliver Varhelyi added:
“Our longstanding cooperation with the
EBRD is extremely valuable, including in the
domain of green finance where the bank has
important experience.
“In Egypt and Morocco as well as in

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