This communication on Eskom’s progress in terms of the United Nation’s Global Compact is based on extracts from Eskom’s 2008 Annual Report.

Scope of report

The annual report for 1 April 2007 to 31 March 2008 is an integrated sustainability report as Eskom aligns itself with international sustainability best reporting practices, including the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines.

The report considers economic, environmental, social and technical performance. Additional sustainability information is disclosed in the internet report. When this is the case, the availability of extra web-based information is signalled in the printed report.

Nature of business, major products and services

Eskom generates, transmits and distributes electricity to industrial, mining, commercial, agricultural and residential customers and redistributors. Additional power stations and major power lines are being built to meet rising electricity demand in South Africa. Since the programme started in 2005, additional capacity of 2 582MW has been commissioned. The approved capacity expansion budget is R343 billion (in nominal terms) up to 2013.

Eskom buys electricity from and sells electricity to the countries of the Southern African Development Community (SADC). The future involvement in markets outside South Africa (that is SADC, African countries connected to the South African grid and the rest of Africa) is limited to those projects that have a direct impact on ensuring security of supply for South Africa.

Eskom is regulated under licences granted by the National Energy Regulator of South Africa (Nersa), originally under the Electricity Act (41 of 1987) – to be replaced by licences under the Electricity Regulation Act (4 of 2006) – and by the National Nuclear Regulator in terms of the National Nuclear Regulatory Act (47 of 1999).

The Eskom Enterprises (Pty) Limited group focuses mainly on activities that support its holding company and is also responsible for all non-core businesses. It supports Eskom by providing plant life-cycle support and plant maintenance, including return-toservice work, and supports the build programme for all the line divisions. It is also in the process of disposing of a number of non-core businesses, including its investment in arivia.kom. At the end of the past financial year, Eskom Enterprises disposed of Mountain Kingdom Communications (Pty) Limited (MKC), the telecommunications provider in Lesotho.

The core businesses of subsidiaries, Eskom Finance Company (Pty) Limited, Escap Limited and Gallium Insurance Company Limited include the granting of employee home loans and the management and insurance of business risk. R1,95 billion (82%) of the mortgage book of Eskom Finance Company has been securitised, (2007: R1,6 billion representing 68%). The planned disposal of this company is expected to be finalised in the 2009 financial year. Eskom’s corporate social investment is channelled principally through the Eskom Development Foundation, a section 21 company.