South Africa

South Africa's GDP grew by 3.9 per cent. in 2007 fuelling the demand for electricity. However, approximately 30 per cent. of South Africans do not have access to electricity at home, while peak demand already exceeds existing power capacity. There have been regular rolling black-outs on a national basis since 2007.

The Government is committed to increasing access for the country to reliable and affordable electricity. As a result, it is now Government policy that 30 per cent. of RSA's power capacity should be in private ownership by 2010 and that at least 30 per cent. of all new capacity constructed over the next five years should be met by IPPs. In order to facilitate this, the Government has embarked on a programme of structural reform in the regulation of the power industry.

IPSA believes that the Group is well positioned to take advantage of these
opportunities given the management's experience in power generation and the Group's existing presence and contacts in South Africa. We believe that there will be further opportunities to develop power plants both in South Africa and in neighbouring countries (such as Botswana, Lesotho, Mozambique, Namibia and Swaziland) that have traditionally relied upon South African exports of electricity.