The government of South Africa has sold its 14% stake in mobile operator Vodacom (65% owned by Vodafone) to the Public Investment Corporation (PIC) for about US$1.9bn to refinance national power utility Eskom. The PIC acts on behalf of the Government Employees Pension Fund (GEPF). The US$1.9bn cash injection in Eskom will enable to convert a US$5bn loan into equity.
Eskom is facing financial difficulties due to delays in its New Build Programme, forcing the company to purchase diesel for its generators and to implement load shedding. Eskom is seeking to increase power tariffs: in October 2014, South Africa's energy regulator NERSA allowed Eskom to increase electricity prices by 12.7% for the 2015-2016 financial year. In March 2013, NERSA had approved an average 8% annual increase for the next five years, while Eskom had requested a 16%/year increase. However, in June 2015, the NERSA rejected a further 9.58% increase in electricity tariffs.
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