Funder Says Eskom’s $8.7 Billion Power Plant Won’t Make Money
- Medupi may close early due to climate change concerns
- Power plant has been hit by construction delays, cost overruns
Eskom Holdings SOC Ltd. Medupi coal-fired power station in Lephalale, South Africa.
Photographer: Waldo Swiegers/BloombergAn $8.7 billion power plant in South Africa won’t ever make a profit because of delays, design defects and increasing opposition to coal-fired electricity generation, one of its funders said.
Cost overruns at the 4,764 megawatt Medupi coal-fired plant, owned by Eskom Holdings SOC Ltd., along with the even larger Kusile facility are seen as key reasons for the state utility’s 396 billion rand ($25.5 billion) debt burden. The project will not meet anticipated returns over its life and is unlikely to stay open that long as pressure grows to reduce greenhouse gas emissions, said the African Development Bank, which approved a 930 million euro loan ($992 million) loan for its construction in 2009.