Eskom wants to borrow R20 billion

Eskom plans to borrow more than R20 billion from the domestic market and international bonds, its chief executive said on Tuesday.

Brian Molefe also said at a presentation of the company's annual results that Eskom had managed to raise R49.5 billion in external funds, easing liquidity pressures.

The company's net profit was R3.6 billion for the financial year to end-March, half of the R7.1 billion it posted last year.

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Eskom is scrambling to keep the lights on in Africa's most advanced economy and Molefe said the poor quality of coal used in its plants was exacerbating the problem by damaging its equipment.

Eskom is seeking a R2 billion penalty from Glencore's Optimum Coal Mine because of the poor quality of its coal and "shoddy performance".

"It relates to legitimate penalties out of the contract we had with Optimum," Molefe said. "The quality of the coal that we get from the mines we are tied to has not been good."

Glencore was not immediately available to comment.

Eskom said last week it would renegotiate contracts with coal suppliers because it was paying too much given a recent drop in commodity prices.

Eskom has to impose rolling power cuts on a regular basis to prevent the grid from being overwhelmed, in part because of the maintenance required for its aging fleet of power plants.

- Reuters