JOHANNESBURG, Nov 13: South Africa’s beleaguered electricity supplier Eskom on Tuesday signed its biggest-ever combined contract, worth nearly $5 billion (3.4 billion euros), in a bid to ease its perennial power shortages.

The contracts with Hitachi of Japan and France’s Alstom are for the building of boilers and turbines at Medupi Power Station, the country’s first coal-fired plant to be built in over 20 years.

“Both contracts in total constitute the biggest contract signed in South Africa in the past 20 years and the largest that Eskom has signed in its 84-year history,” Eskom managing director for enterprises Brian Dames said.

While Eskom had made “a conscious decision to move away from coal” as it tries to diversify its energy sources, Dames said coal-fired power was the best short- to medium-term solution for South Africa.

A combination of an aging power infrastructure and a booming economy has seen electricity demand far outstrip supply in South Africa and power cuts, including planned outages known as load-shedding, have become more frequent.

While the country has committed to nuclear technology in the long run to fulfil its energy requirements, an abundance of coal will continue to make up the power shortfall in the interim, despite the effects of carbon emissions.

“Environmental consideration is the primary driver for us to diversify our energy sources,” Dames told AFP after the signing of the agreements, adding that the company had made a conscious decision to reduce its emissions.

The Medupi Power Station, valued at some 78 billion rand ($11 billion), will be Eskom’s fourth dry-cooled station, and will include a super-critical plant able to operate at higher temperatures and pressures than previous boilers.

The station will include six units with a total of 4,800MW capacity, and is scheduled for completion by 2015.—AFP