Africa-Press. A senior official at the state-owned electricity company in South Africa has stated that the company is in exploratory talks with a global financial institution regarding funding for a nuclear program that could be launched within 12 months.
Eskom, which operates the only functioning nuclear power plant in Africa near Cape Town, is preparing to submit a request for information covering up to 5,200 megawatts of new capacity. South Africa is seeking to increase its base load energy as it transitions away from coal, which still provides most of its electricity needs.
“We are in exploratory discussions with most potential funders… (about) various ways to finance this project,” said the CEO of Eskom at an energy conference in Cape Town, adding, “We… are looking for anyone with ideas, as there are different options.”
He added that Eskom, which is facing financial distress, cannot finance new nuclear plants on its own and is seeking support from partners including commercial banks and institutions such as the African Development Bank.
Major City in South Africa Threatened by Power Supply Cuts Due to Debt
In a separate context, Eskom announced that Johannesburg, the largest city in South Africa, may face power supply cuts due to unpaid debts, adding that the city and its electricity provider, City Power, owe it overdue debts totaling $315 million. An additional amount of 1.58 billion rand is due on June 5.
The financial issues in Johannesburg have recently come under scrutiny after the national treasury raised “serious concerns” about its financial condition.
The company has also faced chronic financial problems but has begun to recover thanks to government bailouts and a sudden improvement in the performance of its coal-fired power generation fleet. The company reported its first full-year profit in eight years last year.
Inflation in South Africa Rises in April, Increasing Likelihood of Interest Rate Hike
In another context, inflation in South Africa accelerated sharply in April, increasing the likelihood that the central bank will raise interest rates when it meets to assess its monetary policy next week. The headline inflation rate reached 4.0% year-on-year, with data released by the statistics agency on Wednesday showing that the rate rose from 3.1% in March, reaching its highest level since August 2024.
Economists surveyed by a global news agency expect the annual inflation rate to rise to 3.9%. The central bank in South Africa targets an inflation rate of 3%, with a 1% margin on either side. The fuel price index reported by the statistics agency increased by 18.2% compared to March, and passenger transport service prices rose by 3.1%.
The central bank will announce its next interest rate decision on May 28, and even before Wednesday’s data, many economists expected an interest rate hike following two consecutive decisions to maintain rates in January and March.
Following the data release, the chief economist at a financial services firm stated that he expects a 25 basis point interest rate hike next week, as the central bank aims to demonstrate its commitment to achieving its target of 3%. He added that they may need to send a message in this regard.
It is noted that the core inflation rate was 0.5% month-on-month in April, slower than the previous month’s reading of 0.8%.
