SOUTH Africa’s indebted power utility may need to borrow an extra R45-billion to purchase diesel and pay inflation-beating salaries to workers, according to S&P Global Ratings.
That’s a 50% increase from S&P’s borrowing forecast for Eskom Holdings in November, according to Omega Collocott, director of corporate ratings for South Africa at the company.
The utility had a funding plan of R24.4-billion for the year to March, according to a company presentation in November.
Africa’s most-industrialized nation had to endure hours of outages in the past few weeks as labor strife and breakdowns at coal-fired plants forced Eskom to resort to rolling blackouts. The elevated use of diesel-fed turbines, the wage deal and a tariff increase that didn’t meet the company’s requirement left the utility with a bigger hole in its finances.
“All in, net cash flows” at the lower end are R15-billion below S&P’s forecasts, Collocott said in an interview. “This obviously assumes no change to the planned quantum
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