Eskom seeks loan-to-equity option from climate funds

South Africa’s state power company is planning to propose that some of the funding the country secured to help tackle climate change take the form of loans to the government that could be converted to equity in the utility when needed. Picture: BLOOMBERG

‏The arrangement would enable the state-owned power utility to access the $8.5bn pledged by the US, UK, Germany, France and the EU without adding to its debt burden, a person familiar with the proposal said. Eskom wants to use the money to fund the closing of some coal-fired power plants and the construction of renewable-energy facilities to replace them.

Eskom’s ability to transition away from coal, which it uses to supply more than 80% of SA’s power, is key to meeting the country’s ambitions to slash its greenhouse gas emissions, the 13th-largest in the world.

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