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According to Finance Minister Enoch Godongwana, key South African government ministers have struck a wide agreement to sell several of the state power utility’s coal-fired power units to help decrease its debt burden.
The agreement comes two years after the concept was initially mentioned in a National Treasury policy paper, which projected that the facilities might bring in up to R450 billion. At the end of March, Eskom’s overall debt was at R402 billion.
“There’s general agreement to sell some of the coal plants,” Godongwana said in an interview in Cape Town on Thursday after presenting the medium-term budget policy statement.
“Broadly we’re agreed in government on that strategy.” Eskom provides almost all of South Africa’s energy, the majority of which is generated by coal-fired plants, making it the world’s largest emitter of the pollutant Sulphur dioxide.
The disposal of the facilities will necessitate buy-in from Eskom management, who may oppose the planned sale due to the impact on the utility’s balance sheet, according to Godongwana.
“They’ve got their own agenda as opposed to us,” he said. How long this will take “will depend on to what extent we’re getting resistance.
But it’s 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.”
Story by : Norvisi Mawunyegah