Briefing on Eskom Portfolio Committee on Public Enterprises 18 February 2009 - Top Secret - 1.

Slides:



Advertisements
Similar presentations
® 1 Rudiments of Credit Analysis May 18, 2001 Credit for Bluffers – Part I.
Advertisements

Merchant Plant Finance Price Risk Management Products Kinder/Morgan Inc. April 5, 2000.
Optimal pricing for sustainability of regulated infrastructure industries South African Economic Regulators Conference of 2012 Deon Joubert 21 August 2012.
FIBI FIRST INTERNATIONAL BANK OF ISRAEL O verview
AGM Finance Update Derrick Sturge, Vice-President, Finance & CFO June 4, 2014.
Basic Accounting Principles
Portfolio Committee on Energy Securing financial sustainability (in response to lower tariff decision) May 2013.
TARIFF REGULATION IN THE NIGERIAN ELECTRICITY SUPPLY INDUSTRY
1 FINANCIAL STATEMENTS 1 st Quarter 2002 FINANCIAL STATEMENTS 1 st Quarter 2002 Cristiano Correa de BarrosCristiano Correa de Barros Chief Financial OfficerChief.
Developing a farm/ranch business plan Debt Repayment.
1 Combined Utility System Cost of Service Rate Study Presentation April 6, 2010.
Chapter 3: Budgetary Accounting for General and Special Revenue Funds
Chapter Fifteen Finance: Balancing Risk and Return to Increase Profitability © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin.
Business Portfolio Adding Value to Investors Luiz Fernando Rolla CFO October, 2008.
Financial Management and Securities Markets Chapter 16 *modified by other sources.
Accounting and Finance
Chapter 16 Financing. Learning Objectives  Identify the common methods of debt financing for firms.  Identify the common methods of equity financing.
Free Cash Flow Valuation
Finance Structures and Issues in the UAE Financial structure is a mixture of long–term debt and equity that a company uses to finance its operations, it’s.
Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 3 Budgetary Accounting for the General and Special Revenue Funds McGraw-Hill/Irwin.
1 Georgian National Energy and Water Supply Regulatory Commission Tariff Regulation Gocha Shonia Department of Methodology and informational provision.
Response to the Eskom Revenue Application for the Multi Year Price Determination for the period 2010/11 to 2012/13 (MYPD 2) Presentation by Business Unity.
Financial Ratio Analysis
Financial Statement Analysis
Housing Rents 2012/13 Housing Briefing - 19 January 2012.
1-1 What is Finance? The study of how people allocate scarce resources over time The study of how people allocate scarce resources over time Costs and.
(c) 2001 Contemporary Engineering Economics1 Discount Rate to be Used in Project Analysis ECON 320 Engineering Economics Mahmut.
Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Methods of Financing Lecture No.
DATE: 21 August 2012 Determining the Regulatory Asset Base Anthony Felet – Regulatory Finance Specialist 1.
1 27 March 2013 MYPD3 Briefing Session – Portfolio Committee on Energy.
1 Chapter 2: Project Cash Flows The definition, identification, and measurement of cash flows relevant to project evaluation.
The Statement of Cash Flows Chapter 4 The Statement of Cash Flows Answers u u How Much Cash Was Provided by Operations u u What Amount of Property and.
Chapter McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Review of Accounting 2.
Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Effects of Inflation on Project Cash.
Budget 2013/14 and Business Plan Town Hall March 7, 2013 ANNUAL BUDGET 2013/14.
CAUBO Winnipeg, June 17, 2008 Presentation by Lucie Mercier-Gauthier Debt Capacity.
ENERGY INTENSIVE USERS GROUP Ian Langridge Chairman January 2010 Eskom’s Revenue Application for Multi Year Price Determination MYPD (2)
Chapter 18 Capital & Capital Market Financial Management  It deals with raising of finance, and using and allocating financial resources of a company.
1 CDO: Collateralized Debt Obligation The New Choice in Global Reinsurance.
Annual Results Presentation 27 August 2009 Jacob Maroga – Chief Executive Empowering the South African dream.
Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 3: Budgetary Accounting for General and Special Revenue Funds.
The Multi- Year Price Determination MYPD Presented by: Thembani Bukula Regulator Member – Electricity Regulation.
Financial Management and Securities Markets
EQUITY AND NET WORTH ACCOUNTING IN THE NATIONAL BALANCE SHEETS Peter van de Ven Head of National Accounts, OECD NBS-OECD Workshop on National Accounts.
Chapter McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Review of Accounting 2.
1. 2 1st Quarter Financial Performance Revenue lower than budget by R11m (1%) and growing by 1.5% year-on-year. Expenses lower than budget by R4m (.3%)
1 Developing Project Cash Flow Statement Lecture No. 23 Chapter 9 Fundamentals of Engineering Economics Copyright © 2008.
1 PRESENTATION TO PPC ON ENERGY 24 MAY 2013 MUNICIPAL TARIFF DETERMINATION PROCESS.
Global Power Company of the Year 2001 Proudly South African Minerals and Energy Portfolio Committee 19 March 2003.
Central government in the planning of municipal revenues and controlling financial sustainability in municipalities Audit department 3, Vilnius division,
Presentation to Select Committee on Economic Development
Municipal involvement in the energy crisis Select Committee on Labour & Public Enterprises.
Understanding Financial Management
1 RORB Return on Rate Base. Legal Basis  Section 43, (f) of Republic Act No Section 43. Functions of the ERC – x x x (a) x x x (f) x x x “The rates.
Chapter 9 Project cash flow analysis 1.Understanding project cost elements 2.Why use cash flow in economic analysis 3.Income-tax rate to use in economic.
Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 4 Accounting for the General and Special Revenue Funds Copyright © 2015.
MYPD2 APPLICATION 15 OCTOBER 2009 Jacob Maroga – Chief Executive Empowering the South African dream.
Short-Term Finance and Planning
Annual report for the 2014/15 financial year
NERSA presentation at the PPC meeting held on 24 May 2006
Eskom presentation – Select Committee on Communications and Public Enterprises 14 June 2017 Briefing by Eskom on its tariff increase for and.
Eskom Holdings Limited Reg. No. 2002/015527/06
PEMPAL, Moscow, October 2016 Natalia Pilets Deputy Head,
WGFOA Spring Conference Egg Harbor, WI April 20, 2017
Electricity Price Increase 2008/9
Minerals & Energy Parliamentary Portfolio Committee
Introduction & Terminology
Accounting for Assets Cash Flows.
Presentation transcript:

Briefing on Eskom Portfolio Committee on Public Enterprises 18 February Top Secret - 1

Eskom Presentation Contents Multi-Year Price Determination (MYPD) Important MYPD Considerations Government Guarantees Government Subordinated Loan Capital Expenditure Programme Current Generation Build (Major) Net Energy Sent out (2008 vs. 2009) Indicative Generation Capacity Expansion Programme Status/Plan (Committed & Approved Projects) 2 - Top Secret -

Eskom: Multi-Year Price Determination Eskom applies to the National Energy Regulator of South Africa (Nersa) for its annual revenue allocation in 3 year tranches. The first 3 year price application (MYPD1) started on 1 April 2006 and ends on 31 March Eskom must now apply for its annual revenue allocations for the next 3 years beginning 1 April 2009 (MYPD2). The current regulatory model makes provision for Eskom to recover its cost of production (operational expenses, e.g. manpower, primary energy, cost of debt) as well as depreciation and a return on assets. 3 - Top Secret -

Eskom: Important MYPD Considerations The model assumes access to equity or borrowings to fund capital expenditure. The current regulatory model values Eskom’s assets on an indexed historic cost basis, which is not a true reflection of replacement cost. It is preferable that the Modern Equivalent Assets (MEA) valuation methodology is used. Indexation at CPI or CPIX is not a true reflection of capital cost inflation, which has been much higher. Current global financial market conditions have resulted in limited access to debt financing. Eskom’s credit rating was downgraded by Moody’s ratings agency in 2008, further reducing its access to debt from the capital markets. Other ratings agencies have put Eskom on a negative watch and adopted a “wait-and-see” approach. 4 - Top Secret -

Eskom: Government Guarantees In order to support Eskom’s borrowing programme, government has agreed to provide some R175.97bn of guarantees on existing and new debt over the next 5 years. R25.97bn of Eskom’s existing debt will be guaranteed to prevent existing bondholders from swapping out for new, guaranteed bonds. The rest of the R150bn of guarantees will be allocated over the next 5 years according to Eskom’s needs, with an annual limit to be set on the amount of debt that Eskom can issue. Government would either repay the debt in its entirety or step into the shoes of Eskom and continue to make payments on Eskom’s behalf. Guarantee fees are payable to the fiscus. This increases Eskom’s operating cost and is recovered though the tariff. 5 - Top Secret -

Eskom: Government Subordinated Loan The government guarantees are in addition to the R60 billion subordinated loan in support of Eskom’s capital expansion programme that has already been approved. The Eskom Subordinated Loan Special Appropriation Act provides for a multi-year appropriation as follows: R10 billion in 2008/9, R30 billion in 2009/10 and R20 billion in 2010/2011. Government’s rights will be subordinated to those of other un-guaranteed and commercial creditors. 6 - Top Secret -

Eskom: Capital Expenditure Programme Eskom’s Committed and Approved 5 year Capex Plan amounts to R385bn over 5 years from 2008/9 to 2012/13. In the region of R273.8bn of the expenditure is to be incurred over the 3 year MYPD period from 1 April 2009 to 31 March MYPD spend is roughly apportioned as follows, Generation (72%), Transmission (14%), Distribution (9%) and Corporate (5%). 7 - Top Secret -

Eskom: Current Generation Build (Major) Return to Service Stations (Camden, Grootvlei and Komati) Open Cycle Gas Turbines (Ankerlig & Gourikwa) and extension thereof Pumped Storage (Ingula) Coal-fired Baseload, “6-pack” (Medupi and Kusile) 8 - Top Secret -

Year-on-Year Net Energy Sent Out 9 - Top Secret -

Indicative Generation Capacity Expansion Programme Status/Plan – Committed Projects 2 899MW of new generation capacity has been added to the system since Top Secret -

THE END 11 - Top Secret -