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Nov 22, 2010
Eskom generates approximately 95% of the electricity used in South Africa and approximately 45% of the electricity used in Africa. Eskom generates, transmits and distributes electricity to industrial, mining, commercial, agricultural and residential customers and redistributors. Additional power stations and major power lines are being built to meet rising electricity demand in South Africa. Eskom will continue to focus on improving and strengthening its core business of electricity generation, transmission, trading and distribution.

Eskom buys electricity from and sells electricity to the countries of the Southern African Development Community (SADC). The future involvement in African markets outside South Africa (that is the SADC countries connected to the South African grid and the rest of Africa) is limited to those projects that have a direct impact on ensuring security of supply for South Africa.

Eskom is regulated under subject licences granted by the National Energy Regulator of South Africa (Nersa), originally under the Electricity Act (41 of 1987) – and lately under the Electricity Regulation Act (4 of 2006) – and by the National Nuclear Regulator in terms of the National Nuclear Regulatory Act (47 of 1999).

In an effort to meet the rising demand for electricity, Eskom has embarked on a massive build programme of R385 billion (in nominal terms) over the five years to 2013. Since the build programme started in 2005, additional capacity of 4 454MW has been commissioned up to 30 April 2009.

The Eskom Enterprises (Pty) Limited group, a wholly owned subsidiary of Eskom Holdings, provides lifecycle support and plant maintenance, network protection and support for the build programme for all Eskom divisions.

The core businesses of the Eskom Finance Company (Pty) Limited, Escap Limited and Gallium Insurance Company Limited subsidiaries include the granting of employee home loans and the management and insurance of business risk.

Eskom's corporate social investment is channelled principally through the Eskom Development Foundation, a section 21 company.

Role in South Africa

Eskom, as a state-owned enterprise, has a greater role to play in addition to the supply of electricity. We also support South Africa’s growth and development aspirations. Eskom’s value proposition to the country can be summarised as follows:

* Providing electricity to all South Africans. Electricity is a necessary and important input to all economic activity, and in particular is important for realising national socio-economic objectives. The consequences of operating a power system with a limited reserve margin became apparent in January 2008 when Eskom was forced to introduce emergency load shedding. Investment in electricity generation infrastructure is a necessary precondition for sustained economic growth. Fundamentally, new investments in other sectors can only proceed if the future supply of electricity is secure.
* Supporting other industries. Over and above supplying electricity, the size of the organisation’s current operations and expansion makes Eskom an important economic stimulant. For example, as electricity generation uses approximately 50% of the country’s coal production, the continued operation of Eskom is therefore an integral part in ensuring sustainability of the coal mining sector and related industries – sectors that provide substantial employment.
* Driving transformation. Eskom’s affirmative procurement strategy has a direct bearing on redistributing wealth and income in society. Eskom continues to support procurement with BEE and BWO suppliers, thereby channelling significant amounts of money into these sectors.
* Creating jobs and new industries. Over the next five years (to March 2013) Eskom plans to spend R385 billion on capital expenditure. This is the biggest build programme in the country and will have large spin-offs through the awarding of contracts, investment by suppliers and the purchasing of goods and services sourced from South Africa. This will help to create approximately 40 000 direct and indirect new jobs, with the related skills development benefits.
* Providing a reliable electricity infrastructure. For direct foreign investment, a secure and reliable electricity supply is a prerequisite. Eskom must ensure that South Africa remains an attractive investment destination.

Countries in which operations are located

Eskom's head office is in Johannesburg and its operations spread throughout the country. In December 2008 we also opened a small office in London in the United Kingdom, primarily to exercise quality control for the equipment being manufactured for our build programme.

Eskom Enterprises operates primarily in South Africa. It has two subsidiaries that operate electricity generation concessions in the African countries of Mali and Uganda.

Regional sales breakdown

The majority of sales are in South Africa. Other countries of Southern Africa account for a small percentage of sales.