April 15, 2004
Johannesburg - Eskom, the state-owned electricity firm, has expressed an interest in bidding for a stake in the Lesotho Electricity Company (LEC).
"We are looking at the asset," said Eskom spokesperson Fanie Zulu.
"Once we have completed our due diligence we will decide on the way forward."
Lesotho's government said this week that it would sell 70 percent of its electricity company by the end of the year in an effort to connect more households to the national grid.
"We are looking for opportunities outside the South African market and the tender falls into the market that we are looking at entering," said Zulu.
Lesotho's privatisation unit has placed advertisements in South African newspapers inviting companies to submit prequalification bids for a majority stake in the LEC, which is in charge of that country's electricity transmission and distribution.
The sale will be one of the biggest privatisations in Lesotho since it started the programme in 1995. So far, about 30 state-owned enterprises have been privatised, including telecommunications firms and an airline.
"We decided to privatise [the LEC] because the government does not have the capacity to finance household connections," an official said.
"The LEC was established in 1969 and, after 30 years of existence, only 7 percent of households had been connected to the national grid."
"We hope to complete the sale of the stake by the end of 2004," he said.
Lesotho has a population of 2 million people.
According to the advertisements, the price of the stake will be fixed and the selection of the successful bidder will be based mainly on the number of new electricity connections it can deliver over 10 years.
The LEC owns a number of small hydroelectric generation plants. Lesotho has just finished construction of the first phase of the multimillion-rand Lesotho Highlands Water Project, and now sells water to South Africa.
Publisher: Business Report
Source: Business Report