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By Richard Lapper in London
South Africa is seeking Britain's support for a potentially controversial $3.75bn World Bank loan for its hard-pressed electricity industry.
The facility has been raised by South African ministers and officials who are in London this week for the state visit of Jacob Zuma, the president. It would assist in funding a new coal-fired generating plant, helping to prevent future power shortages, but also increasing the country's relatively high carbon emissions.
The state power company, Eskom, has been granted permission for a 25 per cent price increase but the industry regulator turned down its request for a 35 per cent rise. This has increased the need for the World Bank loan to fund the planned expansion of generating capacity.
"We really have to go hunting and borrow much more than we would have had to [had the 35 per cent rise been approved]," said Mpho Makwana, the acting chairman and chief executive of Eskom.
Eskom is preparing to build two big coal-fired plants. Some $3.1bn (€2.27bn, £2.05bn) of the World Bank money is needed for one of the power stations - a 4,800MW plant at Medupi while the rest would be spent on renewables and energy efficiency projects.
South Africa seeks UK backing for power plant loan
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