Key South African government ministers have reached a broad agreement to sell some of the state power utility\u2019s coal-fired power plants to help reduce its debt burden, finance minister Enoch Godongwana said.<\/p>\n
The accord comes two years after the plan was\u00a0first ra<\/a>ised<\/a> in a National Treasury policy paper, which suggested the facilities could bring in as much as R450 billion rand ($29.5 billion). Eskom Holdings’s total debt stood at 402 billion rand at the end of March.<\/p>\n \u201cThere\u2019s general agreement to sell some of the coal plants,\u201d Godongwana said in an interview in Cape Town on Thursday after presenting the medium-term budget policy statement. \u201cBroadly we\u2019re agreed in government on that strategy.\u201d<\/p>\n Eskom supplies almost all of South Africa\u2019s electricity, most of it from coal-fired plants that make it the world\u2019s biggest emitter of the pollutant sulfur dioxide.<\/p>\n Disposing of the facilities will require buy-in from Eskom management, which may resist the planned sale because of the impact it would have on the utility\u2019s balance sheet, Godongwana said.<\/p>\n \u201cThey\u2019ve got their own agenda as opposed to us,\u201d he said. How long this will take \u201cwill depend on to what extent we\u2019re getting resistance. But it\u2019s not going to be open resistance. People know we can fire them so they will find silly arguments to go around the problem because if you want to do this, you can do it tomorrow.\u201d<\/p>\n Eskom declined to comment.<\/p>\n Godongwana suggested that selling the plants would put Eskom in a better position to finance its planned shift to cleaner energy. Eskom chief executive Andre de Ruyter last week estimated that as much as $35 billion will be needed over the next 15 years for the transition.<\/p>\n \u201cThey want to take on additional debt,\u201d Godongwana said. \u201cI said to them: \u2018for God\u2019s sake, even if it\u2019s clean, it\u2019s still debt\u2019. So for me, what is going to help you out of the problem is to sell some of your plants. I don\u2019t want the money from that. All I want is for you to go and service your debt and reduce it, then you can start encroaching into bringing new green debt.\u201d<\/p>\n The South African government has said in the past that it\u2019s been approached by investors interested in buying its coal-fired plants, without identifying them.<\/p>\n
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