June 2 (Reuters) – South Africa’s power utility Eskom swung to a full year profit from a record loss last year due to higher electricity demand and power tariffs, and said on Wednesday it would close its funding gap soon.
State-owned Eskom [ESCJ.UL], which supplies 95 percent of electricity in Africa’s largest economy, said profit in the year to the end of March was 3.6 billion rand ($466 million) from a loss of 9.7 billion rand.
Cash-strapped Eskom has been struggling to raise the 461 billion rand ($59.62 billion) it needs to build new power plants to meet fast rising demand. Eskom’s Financial Director Paul O’Flaherty said the utility was not far from closing this gap.
“We are at very advanced stages of actually solving this particular issue,” he said.
Eskom said it was also confident of sufficient power supply during the World Cup later this month. [ID:nLDE64N1CX]
Acting Chairman Mpho Makwana said the utility was committed to adding 10 gigawatts of power to the national grid within a decade, which should temporarily relieve the tight supply in the world’s top platinum producer and a major supplier of gold.
While Eskom has had a monopoly on the country’s power supply, independent power producers are expected to join the generation business and be included in the government’s new energy plan currently under discussion.
“That should temporarily give comfort to the country while the debate gets completed around who else comes into the market,” Makwana said.
South Africa faced serious blackouts in early 2008 after the national grid nearly collapsed, forcing mines and smelters to shut for days and costing the economy billions of dollars. (Reporting by Agnieszka Flak)