JOH-ESK010-20080520-JvW-P1

Jacob Maroga,

Chief Executive, Eskom Holdings Ltd

23 January 2009

Update on the Power System and the Build

Programme:

A Presentation to the Media

JOH-ESK010-20080520-JvW-P1

Power System - update

3

State of the Power System: Capacity (last 6 months)

• Camden Power Station fully operational (8 units)

• 2 units of Grootvlei power station now synchronised to the grid

• 1 unit of Komati power station now synchronised to the

grid• 2 more open cycle gas turbine units at Gourikwa

power station commissioned.• Based on last year’s peak demand reserve margin is

above 8%.

– 35, 959 MW on 14 July 2008 compared to 36, 513 MW on

5 July 2007

Eskom has just over 39 500MW of operational capacity with the aim of

adding close to 1 000 MW more from the return to service stations and

the open cycle gas turbines by the middle of the year.

4

CAPACITY OUTLOOK

0

1000

2000

3000

4000

5000

6000

7000

8000

01 J

an 0

816

Jan

08

31 J

an 0

815

Feb

08

01-M

ar-0

816

-Mar

-08

31-M

ar-0

815

-Apr

-08

30-A

pr-0

815

-May

-08

30-M

ay-0

814

-Jun-

0829

-Jun-

0814

-Jul-0

829

-Jul-0

813

-Aug

-08

28-A

ug-0

812

-Sep

-08

27-S

ep-0

812

-Oct

-08

27-O

ct-0

811

-Nov

-08

26-N

ov-0

811

-Dec

-08

26-D

ec-0

810

-Jan-

09

MW

's

LL Full LL Partial Target

Partial Load Losses within range.

Planned maintenance volume increasing for remainder of year.All plant being closely monitored.

State of the Power System: Plant performance, Jan 2008 to

Jan 2009

5

State of the Power System: Plant performance

• Significant maintenance work done in the holiday period in December and January

–between 6 000MW and 9 000MW of plant

• Impact of heavy rains managed and plant performance

has improved as compared to the January 2008 period.

• More work still requires to be done to enable sustainable plant performance in the next few years.

6

10111213141516171819202122232425262728293031323334353637383940

20-Jan 24-Feb 30-Mar 04-May 05-Jun 01-Jul 23-Jul 25-Aug 28-Oct 08-Dec 22-Jan

Weeks

Co

al

sto

ck

pil

e d

ay

s

38.7

days

• Average coal stockpile levels at 38.7 days with every power station having stockpile levels above 20 days.• Stations vulnerable to rain have stockpiles of about 5 days of coarse coal treated with chemicals to resist moisture ingress

State of the Power System – coal supply trend, Jan

2008 to Jan 2009

7

State of the Power System: Energy Savings

• Forecasting to have a 3% reduction in energy sales for

the financial year 2008/9 as compared to 2007/8• Impact of the economic downturn seen in the shutting

down of ferro-alloy and stainless steel smelters.

– At least 1500MW of demand reduced.

• Savings by remaining customer base through

efficiencies and price signals providing up to 1500MW of demand reductions.

– Some reduction due to the downturn but difficult to

quantify.

• Average of 3 to 5% savings. – Eskom is in continuous discussion with the mining

houses to ensure production is not lost.

JOH-ESK010-20080520-JvW-P1

Build Programme - update

JOH-ESK010-20080520-JvW-P1

Planned capacity expansion projects

3,182.4 MWTOTAL Generation MW Installed to date (Since Build Programme Inception)

1,335 KmPower Delivery ProjectsInstalled to date (Since Build Programme Inception)

No Capacity increaseMajuba Rail

No Capacity increaseMatla

7 New Transformer Substations

300 MW

3,645 MW

5,032 MW

9,564 MW

PORTFOLIO TOTAL

No Capacity increaseKriel

300 MW IncreaseArnot

Mpumalanga Refurbishment

1,170 MWGrootvlei

1,520 MWCamden

Duvha

Komati

Sere

Tubatse

OCGT

Ingula

Kusile

Medupi

PROJECT

TransformersInstalled to date (Since Build Programme Inception)

RTS

PEAKING

NEW COAL

PORTFOLIO CAPACITY

4,764 MW

4,800 MW

1,352 MW

2,080 MW

1,500 MW

100 MW

955 MW

No Capacity increase

3,182.4 MWTOTAL Generation MW Installed to date (Since Build Programme Inception)

1,335 KmPower Delivery ProjectsInstalled to date (Since Build Programme Inception)

No Capacity increaseMajuba Rail

No Capacity increaseMatla

7 New Transformer Substations

300 MW

3,645 MW

5,032 MW

9,564 MW

PORTFOLIO TOTAL

No Capacity increaseKriel

300 MW IncreaseArnot

Mpumalanga Refurbishment

1,170 MWGrootvlei

1,520 MWCamden

Duvha

Komati

Sere

Tubatse

OCGT

Ingula

Kusile

Medupi

PROJECT

TransformersInstalled to date (Since Build Programme Inception)

RTS

PEAKING

NEW COAL

PORTFOLIO CAPACITY

4,764 MW

4,800 MW

1,352 MW

2,080 MW

1,500 MW *

100 MW

955 MW

No Capacity increase

* Tubatse has

JOH-ESK010-20080520-JvW-P1

Planned power delivery projects

085km275KV Tarbor-Spencer

0218km765KV Majuba-Umfolozi

233km1450km765KV Zeus-Omega Western Cape

Complete408kmSouthern Cape Strengthening (Beta/Delphi)

Assure availabilty of the Cahora Bassa – Apollo line

205km

56km

111km

PLANNED CAPACITY INSTALLED TO DATEPROJECT

Apollo Refurbishment

400KV Duvha-Lesideng

Cape Strengthening Western Grid

Platinum Basin Complete

Complete

82km

Complete

085km275KV Tarbor-Spencer

0218km765KV Majuba-Umfolozi

233km1450km765KV Zeus-Omega Western Cape

Complete408kmSouthern Cape Strengthening (Beta/Delphi)

Assure availabilty of the Cahora Bassa – Apollo line

205km

56km

111km

PLANNED CAPACITY INSTALLED TO DATEPROJECT

Apollo Refurbishment

400KV Duvha-Lesideng

Cape Strengthening Western Grid

Platinum Basin Complete

Complete

82km

Complete

5 Year plan for Transmission Lines:

765Kv: 8,122km

400Kv: 7,768km

275Kv: 310km

132kv: 293km

11

The benefits to South Africa go far beyond

increased generation capacity

Regional development

International competitive-

ness

Infrastructure

GDP impact

Skills development

Reserve margin

Local Spend

New industries

•GDP growth:Medupi 0.34% /yrKusile 0.34% /yrIngula 0.04% /yrTotal 0.72% /yr

• 40% of total spend

(~R227bn) to be spent

locally (~R90bn)

• More than 3,000 skills to be

developed through

partnerships with suppliers

and educational institutions

• At least 54km of new roads to be

built

• Local infrastructure improvements

• Implementation of CSDP will improve competitiveness of

SA electricity components manufacturing industry

• Additional capacity will result in meeting 10% reserve margin target in 2015

• Creation of a boiler and

turbinecomponent

manufacturingindustries in SA

12

Medupi Power Station“rain that soaks parched lands,

giving economic relief”Project update

Unit 1

Unit 2Unit 3

Unit 4

Unit 5

Unit 6

13

Medupi is SA’s largest construction project by far!!

Medupi

4X larger than Gautrain

Capex cost (Rand)

14

Medupi - construction in commenced 2007 and is due to go

online in 2012

Medupi construction activities started

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

6 5 4 3 2 1

First unit commissioned in 2012

Fully commissioned in 2015

Execution partner: Coal supply

Boiler

Turbine

Enabling Civils

Main Civils

Generator transformers

2006

Board approval March 2007

NERSA licence granted

15

Medupi Power Station will have a significant impact on SA

Inc.

HEADLINE FIGURES

• Funding required: R100bn (local & offshore)

• Capacity as % of Eskom’s installed base: 11% (4,794 MW)

• Will be the 22nd largest power plant, 4th largest coal plant in the world

• Direct construction employment: 8,000

(at peak)

• Current construction employment: 2,700

(Dec ‘08)

• Indirect employment: ~1,500

• Ongoing direct employment: 750

• People directly impacted by Medupi ~80,000

…… plus keeping the lights on for all of South Africa!

16

Medupi Power Station’s potential impact on SA Inc.

MEDUPI

National Infrastructure

Main components

(expanded on following pages)

Roads

Freight forwarding

Ongoing roads maintenance

Richards Bay to

Lephalale road

Lephalale bypass

R1bn, 500 jobs

R50-100m

Richards Bay facility

R90m, 150 jobs

Hotels

Local transport

Local business

Catering and workforce

supply

Vehicle

maintenance

Hotels to expand

100%-150%

30-35 buses at peak

Increased taxis

~100 jobs

Food, laundry,

maintenance, security

supplied to workforce

R1bn, 500 jobs

500+ extra vehicles

maintained locally

20 jobs

Skills (current & legacy)

Artisans

Engineers

Semi-skilled

Unskilled

R&D

Proj Mgt, Admin

200 required

2,400 required

2,750 required

1,000 required

70 required

1,500 required

Transmission

Lines

Substations

2500 km lines built

~R5bn

2200 jobs

1 large substations

Upgrade to 1 other substation

~R1bn

450 jobs

Gypsum

Coal, Water, Limestone

Waste (Ash, Gypsum,

General)

Ash

General

Coal

Limestone

Water

300kt/yr

R60m / yr

15Mt / yr

~R1.8bn / yr

2000 jobs for mine

expansion

Needs 14Mm3/yr vs

current allocation of

2.9Mm3/yr. Crocodile

River diversion

R50m / yr

3Mt / yr

20 jobs

Potential to sell to

cement manufacturers

Low environmental

impact

Setting up local waste

dump

Up to 50 jobs

R100m

Trains

38 wagon train per day

for limestone

12 tank carriers per

year of oil

Maintenance of rail

lines

50 jobs

Local Infrastructure

Housing

Water

Sanitation

Social facilities

1850 houses (320

being purchased and

900 being built)

R2.0bn

Sewerage plant

upgrade

R50m

2x schools, increased

policing, recruitment

centre, fire, social club,

ICT centre

R50m planned spend

Benefit from Crocodile

River diversion

• Training to upskill local workforce (eg MPS-JV

local training facility targeting 3000 in multiple skills

categories)

• Training to reskill/upskill Eskom employees with

on-the-job training for 500 people

Ongoing operations and maintenance

250 jobs permanent

250 contracted

R450m / yrPlant permanent

~130 jobsT&D

FundingR100bn funding required from multiple

sources:

•Government

•Local banks

•Foreign banks

17

Kusile Power Station“The Dawn has come.”

Project update

Kusile

18

Kusile construction in commenced 2007 and is

due to go online in 2012

Kusile construction

activities started(01 April 2008)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

1 2 3 4 5 6

First unit commissioned in2013

Fully

commissioned by2017

Coal Supply

Boiler

Turbine

Enabling Civils

Main Civils

2006

Board approvalMarch 2007

NERSA licence

granted(15 March 2008)

Generator Transformers

Execution Partner

19

Kusile Power Station will have a significant impact on SA Inc.

HEADLINE FIGURES

• Funding required: R111billion (local & offshore)

• Capacity as % of Eskom’s installed base: 11% (4,800 MW)

• Will be the 22nd largest power plant, 4th largest coal plant in the world

• Direct construction employment (at peak) : 8,500

• Current construction employment: 1100

• Current local employment (Dec ‘08) 448

• Indirect employment: ~5,000

• Ongoing direct employment: 12,750

• People directly impacted by Kusile ~71,000

…… plus keeping the lights on for all of South Africa!

20

Medupi, Kusile

and Ingula

21

Medupi, Kusile, Ingula … together represent the most

ambitious infrastructure investment SA has ever undertaken

HEADLINE FIGURES

• Funding required:

• Capacity increase as % of Eskom’s installed base:

– Base load increases from Medupi and Kusile

– Peaking capacity increase from Ingula

• Will be 4th and 5th largest coal plants in the world and 19th

largest pumped storage scheme

• Direct construction employment:

• People directly impacted by Medupi, Kusile and Ingula

• Pace of build of Medupi and Kusile is 30% faster than

previous Eskom coal builds

…… plus they will keep the lights on for all of South Africa!

R227bn (local & offshore)

25% (+9,564 MW)

30% (+1,332 MW)

20,000

~ 155,000

22

The three projects will require about 85% of one year’s artisans and 105% of one year’s higher education graduates

Opportunity for SA to grow its skills base

Artisans

R&D

Project management and admin

IngulaKusile

Medupi

Engineers

8 700 skilled

people required

8 700 skilled

people required

Demand for skills on projects

5,200

150

500

2,840

23

Thank You