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JOHANNESBURG (Reuters) - South Africa's ruling ANC party dismissed on Wednesday a furore over its investment wing's stake in a multi-billion rand government energy project, denying any conflict of interest.

The ANC's investment company Chancellor House owns a 25 percent stake in Hitachi Power Africa, a subsidiary of Japanese manufacturer Hitachi, which won a contract to supply boilers to two new coal-fired power stations, Kusile and Medupi.

But ANC Secretary-General Gwede Mantashe rejected opposition allegations of cronyism in the project, which is part of a drive to boost electricity output after the national grid almost collapsed two years ago.

"Hitachi won the contract because it is a global company (with the skills) ... not because it has a minority shareholder which is called the ANC," Mantashe told Reuters. Such deals between the ANC's investment wing and companies helped the party to "sustain" itself and fund its activities, he added.

"There is nothing wrong with investing in public companies and the Chancellor House has done nothing wrong," Mantashe said.

The deal was signed in 2008 but controversy has resurfaced due to a request by state-owned power utility Eskom for huge electricity price increases, angering consumers.

The National Energy Regulator of South Africa began a series of public hearings last week on the request by Eskom. The utility says power prices need to rise 35 percent a year for the next three years to help pay for the multi-billion dollar programme to expand generating capacity.

The ANC has defended its stake in Hitachi Power Africa, insisting that it was not illegal or corrupt. But opposition parties accused the ANC of cashing in on state deals.