VENTURES AFRICA – South Africa’s power utility company Eskom is seeking government approval to increase electricity rates by 14.6 percent per year over 5 years.
In a confidential document obtained by Reuters on Friday, the company is also stated that the annual increment could be as high as 19 percent depending on certain government decisions.
“But this could climb to 19 percent if the government brings in a carbon tax or builds new plants beyond those currently under construction,” Brian Dames, Eskom’s CEO said in the document marked “strictly confidential”.
The increase is required for Eskom to fund its expansion project and construction of new power plants to sustain power supply to power Africa’s largest economy.
Eskom is one of the world’s lowest-cost electricity producers, it generates 95 percent of South Africa’s power and in 2010, it was granted three years of 25 percent power tariff hikes.