CHARLES MOLELE
GOVERNMENT has proposed to offer R254 billion to Eskom in debt relief over the next three years to help strengthen the power utility’s balance sheet and enable it to restructure, Finance Minister Enoch Godongwana announced during the 2023 Budget Speech at the Cape Town City Hall.
Treasury said about 168 billion rand of Eskom’s debt relief will be in capital and 86 billion rand in interest payments over the next three years.
Of this, R66 billion will be funded through the budget while R118 billion will be additional borrowing over the period, with government directly taking over up to R70 billion of Eskom’s loan portfolio in 2025/26.
“This consists of two components. One is R184 billion. This represents Eskom’s full debt settlement requirement in three tranches over the medium term. Second is a direct take-over of up to R70 billion of Eskom’s loan portfolio in 2025/26,” said Godongwana.
“Because of the structure of the debt relief, Eskom will not need further borrowing during the relief period … Our economy is facing significant risks. Uncertainty is on the rise. It
requires us to do bold things. To put the fear of failure aside and execute the difficult
trade-offs needed to get from where we are now, to where we want to be in the
future.”
He said the proposed debt-relief arrangement is accompanied by strict conditions to safeguard public funds.
“These conditions include: requiring Eskom to prioritise capital expenditure in transmission and distribution during the debt-relief period; for the company to focus on maintenance of the existing generation fleet to improve availability of electricity … and that Eskom implement the recommendations emanating from an independent assessment of its operations, which has been commissioned by the National Treasury,” said Godongwana.
Eskom said in a statement it was grateful for the financial relief by the government and would study the details of the plan before making any comment.
INSIDE POLITICS
