1. Municipal involvement in the energy crisis Select Committee on Labour & Public Enterprises

2. IMC ESKOMFEE ESKOM Recovery Team Industry NERT Industry Task Team StreamsWork Groups National Response to South Africa’s Electricity Situation NERSA (Regulator) SACC Other Bodies Energy Supply Committee TreasuryDME DPEDEAT DTIDPLG President The current response effort is being managed at various interfaces, these are:

3. There is municipal representation at key forums NERT Industry Task Team BUSADEAT NEDLAC City of JHB COSATU DME DPE DPWDoL DoT CSIR DPLGESKOM FEDUSA GCIS EDI Holdings JHB City Power Gauteng Gov. NEEA Indalo Yethu National Treasury Presidency RTMC NERSA DTI ESKOM EIUG AMEU SALGA Chamber of Mines DPE National Treasury Labour Unions DME Specialist Groups Co-generation & Market DSM Implementation Co-ordination Legal & Tariffs Economic Impact Financing Comms Strategic Steering Committee Development of Communication Protocols Power Management Implementation of Power Conservation Regulatory & Intergovernmental Support Monitoring & Evaluation NERT = National Energy Response Team

4. 4 The primary levers to recover security of supply are demand and supply management. These options are however impacted by a number of other factors. Extraneous Factors Security of Supply Levers Security of Supply Demand-Side Options Supply-Side Options Load Shedding Load Reduction DSMPCP Pricing Public Awareness OCGT / CCGT Primary Energy Existing UCLFGo-generation Municipal Gen. New-Build Import Export Energy Efficiency Economic Factors Financial Constraints Regulatory Framework Legislative Environment Availability of Skills Market Forces (Procurement) The overarching role that municipalites are playing in the enery crises is the implementation of demand side options to reduce energy consumption

5. Eskom/ Municipal Task team Objective: To drive rapid energy reductions to avoid load shedding Members of Task Team  Eskom  City of Tshwane  City of Johannesburg (City Power)  Ekurhuleni  City of Cape Town  Nelson Mandela Metro  Emfuleni Local Municipality  Rustenburg Local Municipality  Msunduzi Municipality  Mangaung Municipality (Centlec)  Buffalo city Municipality  eThekwini Municipality Meeting frequency is every 2 weeks Eskom created a national task team with the metros and large municipalities to deal with the energy crisis 5 Demand-Side Options Load Shedding Load Reduction DSMPCP Pricing Public Awareness Energy Efficiency

6. Capital Expenditure and Funding

7. 7 Build Major infrastructure investments to deliver an additional 40 000MW by 2025 Two key extensions to OCGTs at Atlantis and Mossel Bay will add further 1000MW by end 2009 First unit at Medupi scheduled to come on stream in 2012 Return to service stations: Camden, Grootvlei and Komati projects proceeding to schedule. –Last unit from Camden on line by the second quarter of 2008 (Total of 1600MW). –First unit from Grootvlei commercial (31 March) (± 200 MW)

8. Capital Expenditure 2009~2013

9. All projects

10. Funding considerations Credit Rating maintenance critical –Access to funding –Cost of funding –Access to reputable equipment suppliers Maximisation of available funding options Long term financial market access via relationship management and credit rating Active portfolio management necessary

11. Funding principles No one source of financing can ensure a sustainable balance sheet hence a balance of the following sources is critical: –Revenue – tariff increases, –Local and international debt markets and –Committed equity like financial support available from the Shareholder The level of price increases awarded will impact directly on the quantum of shareholder support needed

12. How Eskom will spend R60bn Shareholder support will be used for funding the capital expansion R343bn programme Build programme will ensure the capacity is added to improve the reserve margins Included in our funding pool of funds Not allocated to any specific capital project Utilised according to the cash inflows received from government over next 5 years Not utilised for operating costs or primary energy costs Terms and conditions of R60bn not yet finalised

13. Thank You