$11 B green energy plan to save Eskom

South Africa: A plan to establish the world’s largest green-energy financing initiative is being threshed out in South Africa, which needs to reduce its environmental footprint and find innovative ways to fund debt-stricken state power utility Eskom Holdings SOC Ltd.

The plan envisions the establishment of an $11 B facility backed by development finance institutions and private funders. The new entity would lend money to Eskom at slightly below commercial rates on condition it accelerates the closure of polluting coal plants to make way for renewable energy.

Eskom supplies about 95 % of South Africa’s power and has turned to the government for aid to remain solvent after amassing $31 B (450 B rand) of debt. Under the plan, it would secure loans in tranches from the new facility over five years and have to repay them over 20 years. The money would be used to wean Eskom off bailouts and cover its future financing needs, rather than fund new and already self-sustaining green energy projects.

Implementation of the plan would be contingent on the government following through on a commitment to break up Eskom into generation, transmission and distribution units under a state holding company and reorganizing its debt to place it on a more sustainable footing.

Source: My Broad Band