South Africa needs dollar finance to drive down costs for gas IPPs

South Africa wants to fund its LNG-to-power projects in its own currency, but switching to dollars would reduce costs and give more flexibility, industry players say South Africa wants to fund its LNG-to-power projects in its own currency, but switching to dollars would reduce costs and give more flexibility, industry players say.
By Leigh Elston 11 October 2017 0 27927
South African electricity pylons Electricity pylons in South Africa. (John Hogg, World Bank)

South Africa’s independent power producer (IPP) office may need to open planned LNG-to-power projects to dollar financing to increase competition and reduce prices rather than pushing for rand denomination, industry figures have said.

The proposed infrastructure is estimated to cost at least $5 billion. “I think there’s the view that, on a pure rand basis, there probably isn’t going to be capacity in the South African market to totally fund those infrastructure requirements,” Vuyo Ntoi, investment director for Southern and Central Africa at AIIM, told delegates...

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