The investment portfolio target ranges are updated and discussed by the board on an annual basis and were revised in December 2007.

The approved generation energy mix is based on the current strategic drivers, the integrated strategic electricity plan (ISEP), and the results of portfolio modelling. The key assumptions and sensitivities under which these portfolios will change relate to the demand forecast and the fuel cost of the different baseload technologies. Should demand not grow at 4%, significantly less capacity will be required. Changes in any key assumptions will lead to a change in the portfolio targets.

Strategic drivers such as climate change mitigation, diversification and shareholder aspirations must be balanced and traded off against purely financial considerations. Eskom also faces environmental challenges and primary energy constraints in the face of global competitive markets and a shortage of skills.

Based on committed projects, new options and investment strategy drivers, we recommend a portfolio that moves away from the least-cost option to incorporate a more “clean” and diversified portfolio that still reflects a reasonable “value at risk” and includes replacing existing coal-fired generation with clean coal technologies.

We are ensuring that not only are we complying with South African environmental, social and legal requirements, but also the Equator Principles, IFC1 performance standards and taking into account the IFC Environmental Health and Safety (EHS) guidelines.

Click here for the strategic drivers taken into account when developing the portfolio.