January 22, 2015 / 12:52 PM / 6 years ago

South Africa plans $870 mln funding for Eskom by June -Treasury

Electricity pylons carry power from Cape Town's Koeberg nuclear power plant in a file photo. REUTERS/Mike Hutchings

JOHANNESBURG (Reuters) - South Africa plans to inject $870 million into cash-strapped state utility Eskom as early as around June, a finance ministry spokesman said on Thursday, as part of its strategy to raise funds for the power company.

Pretoria said in October it would sell “non-essential assets” to raise 20 billion rand ($1.7 billion) of funding for Eskom, which urgently needs about 250 billion rand to upgrade its ageing infrastructure.

“National Treasury has already identified a viable strategy to raise the required amount of funding that could be executed,” Treasury spokesman Jabulani Sikhakhane said, confirming a Bloomberg report based on an interview with Finance Minister Nhlanhla Nene in Davos.

“Due to the commercial sensitivities involved, we cannot provide details. However, the process is proceeding to plan,” Sikhakhane added.

Nene told Bloomberg TV at the World Economic Forum the government had identified assets to sell and the first cash injection of 10 billion rand ($870 million) was expected by about June.

The Treasury has said it will give details on the sales in the national budget review in February. Sources told Reuters in December the government was considering relinquishing shares of firms such as mobile operator Vodacom and fixed-line provider Telkom.

Eskom said last week it expected the power grid to remain constrained for the next two to three years, raising the likelihood of more rolling blackouts in Africa’s most developed, but ailing economy.

($1 = 11.4919 rand)

Reporting by Stella Mapenzauswa; editing by David Dolan

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