Despite some claims to the contrary, Eskom’s financial problems are far from resolved. Its woes with the construction of Medupi, Kusile and Ingula are well documented. Medupi and Kusile coal-fired power stations are highly complex megaprojects and have their fair share of large-cost overrun and delay problems that typically bedevil such projects. While Eskom is adding vast amounts of new capacity to the system, demand for its product is down, with a completely unforeseen and unprecedented reduction in electricity demand over the past 10 years (maximum demand and energy supplied). This is undoubtedly the combined result of charging the highest real electricity tariffs in recorded history (since 1950) and a period of chronic load shedding that dealt a blow to investor confidence in SA’s power system. Global ratings agencies agree. Standard & Poor’s, for one, recently cut Eskom’s credit rating a further notch into the subinvestment or "junk" territory. Given the government’s large guar...

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