Investment experts have cautiously welcomed a proposal by the head of the ANC economic transformation committee, Enoch Godongwana, that the Public Investment Corporation - which administers government pensions and is the country's largest pension fund manager - and private funds buy into the cash-starved power utility.
But they warn that the deals would need to be structured to ensure the absolute protection of investors.
Professor Christo Auret, professor of finance at the Wits School of Economic and Business Sciences, said the proposal would be viable if it could be demonstrated with a return to profitability that Eskom was properly managed.
"Key to getting private investment would be that the government does not have the majority controlling stake in Eskom," he said.
"It should have a large stake, but not a controlling one. The reason being is if we want to privatise it we need to have it on a sound footing in terms of know-how and management. With the government in control, it can appoint the management, board and CEO. In essence it calls the shots."
Auret said that, before private pension funds invested in Eskom, it would have to demonstrate that issues such as maintenance and construction, which had led to overruns of time and money - serious red flags for investors - had been resolved. ''If these could be addressed I would say it would be an interesting investment proposition, especially if there were proposals around privatisation."
Eskom's funding gap was last estimated at R225-billion, caused mainly by continued delays in the construction of power stations Medupi and Kusile, and a hefty diesel bill to run back-up generators. South Africa's retirement industry is worth about R3-trillion.
In terms of Godongwana's proposal, investment from private- sector pension funds would also be sought but "they would not be forced to invest".
"We are talking about a funding model where Eskom presents different forms of funding models that are attractive for investors in the form of returns. As to what form this will take depends on how these models are structured," Godongwana said
The returns would be the incentive for investors, he said.
That the government stood as a guarantor should be sufficient security for anyone who wanted to put money into Eskom, said Godongwana.
"South Africans should invest as Eskom is an asset."
He said the focus for pension investment was the electricity-generation side of Eskom. Transmission should remain in state hands.
ANC secretary-general Gwede Mantashe said last night that pension funds should invest in infrastructure and not just shares.
"This is beyond just what we call prescribed assets. Retirement funds by their nature invest in infrastructure," he said, adding that it could be Eskom, road or rail.
"This is not throwing one's money down a hole. These are high-return investments," Mantashe said.
Andrew Canter, the chief investment officer of Futuregrowth investment company, said pension funds, including the PIC, existed to look after their members' interests and, accordingly, all investments must earn risk-adjusted returns.
He said as long as investment was voluntary and not forced through threats "it should be fine".
But if the government were to tell pension funds that they had to invest in power plants on a non-commercial basis, the savings rate in South Africa would be reduced as investors would feel the government was interfering in the management of their savings, Canter said.
"Pension funds exist to serve members and the government cannot tap into them at will when it has a funding need."
The government is struggling to shore up the parastatal by systematically increasing tariffs, injecting equity and allowing Eskom to borrow domestically with state support.
"Though a lot has been done to restore confidence, it would help if the lights stopped going out," Canter said.