Eskom to look at Islamic bonds for funding

South African power utility Eskom will look at new funding opportunities such as Islamic bonds to finance its capacity expansion projects. A lower than hoped for rise in power rates has left state-owned Eskom with an expected revenue gap of 225 billion rand ($22 billion) over the next five years. The associated decrease in projected revenues will materially affect operations, including ability to obtain funding for future capacity expansión. Funding for the next 12 to 18 months would be sourced from issuance of domestic and international bonds, export credit agency-backed financing, development finance institutions and the domestic commercial paper market. New opportunities from alternative funding sources and products such as Islamic funding (sukuk), preference share-type funding and project-based funding will also be explored.

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