By Ron Derby and Carli Lourens Dec. 5 (Bloomberg) -- South Africa, suffering a power crisis that’s limiting supplies to gold and platinum mines, canceled a plan to build a nuclear plant for about 120 billion rand ($12 billion) as a global credit freeze cuts financing. “It’s too big, we can’t do it,” Fani Zulu, a spokesman for state-run power utility Eskom Holdings Ltd., said in Johannesburg. “The bidders were informed after we took the decision at a board meeting yesterday.” Groups led by Areva SA, the world’s largest supplier of nuclear reactors, and Toshiba Corp.’s Westinghouse Electric Co. were vying for the order. Producers of generating equipment around the world are losing orders as slowing economies weaken demand for power and spending is slashed on projects from Canada to the Middle East and Africa. “We’re disappointed because we put a lot of work into the process, but we’re hopeful the South African government will remain committed to developing nuclear power,” Jacques-Emmanuel Saulnier, spokesman for Areva in Paris, said by phone. “If South Africa comes back to us, we’ll be there.” Westinghouse remains committed to Eskom and South Africa, Rita Bowser, regional vice president, said in an e-mailed statement today. The decision to cancel the plant won’t undermine national power supply because slowing growth will curb electricity consumption and other generators will be built, the government said in an e-mailed statement today. ‘Not a Train Smash’ “It’s not a train smash that they’ve canceled the nuclear plan,” said Jac Laubscher, group economist at Sanlam Ltd., the biggest South African-owned life insurer. The economy will probably grow at a slower pace than Eskom has forecast for the next five years, reducing demand, he said. The worldwide slowdown and rising interest rates in South Africa have reduced government growth projections to 3 percent next year and 4 percent in 2010. Eskom failed to keep pace with electricity demand in Africa’s biggest economy in recent years, forcing it to curb supply to companies such as Anglo American Plc and Xstrata Plc after rolling power outages across the nation. Power usage has risen by 50 percent since apartheid ended in 1994. The utility, seeking about 150 billion rand to fund expansion and meet demand, is in talks with the World Bank for a loan of as much as $5 billion. Eskom had its credit rating cut by Moody’s Investors Services this year after regulators turned down a request to raise electricity charges 61 percent to pay for new capacity. Demand Increase South Africa had planned to generate 20,000 megawatts from nuclear reactors by 2025, more than 10 times the current output. Areva’s Saulnier said the delay was specific to South Africa and didn’t reflect the state of the industry, as shown by efforts by utilities in the U.K. and the U.S. to build nuclear plants. Areva proposed two 1,650-megawatt reactors, while Westinghouse offered to build three 1,140-megawatt reactors. South African construction groups Aveng Ltd. and Murray & Roberts Ltd. formed part of the groups bidding for the contract. Electricite de France SA, the world’s biggest operator of atomic reactors, has South Africa among its priorities for nuclear expansion. The utility wants to operate about 10 so- called Evolutionary Power Reactors by 2020 and yesterday at an investor day in London included two in South Africa. South Africa remains “committed to nuclear power,” to lessen the nation’s carbon footprint, Department of Public Enterprises Director General Portia Molefe said today. To contact the reporters on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net; Carli Lourens in Johannesburg at clourens@bloomberg.net.

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