Eskom asserts that addressing its debt issues is essential to its turnaround strategy.
In the Mid-Term Budget Policy Statement (MTBPS), Finance Minister Enoch Godongwana revealed that the government will assume a share of the power utility’s R400 billion debt.
As indicated in the MTBPS, a debt takeover by the government (together with other reforms at Eskom and in the South African energy sector) will assure Eskom’s long-term financial sustainability.
“The implementation of a debt relief solution and these reforms to the electricity sector will enable Eskom to undertake the much-needed capital and investment programmes to ensure the stability and security of the country’s electricity supply without relying on further government bailouts,” Eskom said.
The utility company stated that it will discuss with authorities and interested parties in due time.
“As noted by the Minister of Finance in the MTBPS, the government is working to finalize the details of the proposed solution, including the amount of proposed relief, the relevant debt instruments to be included, and the method for carrying out the transaction, and it plans to provide additional information in its 2023 budget,”
In the coming weeks, Eskom looks forward to working closely and productively with the government to establish a solution that would restore Eskom’s financial independence, transparency, and operational efficiency.
“Eskom really values the continuous support and collaboration of its investors and stakeholders and will engage and consult with them on the debt reduction option at the opportune time,” the electricity provider stated.
As part of its turnaround strategy, the business continues to unbundle its transmission segment, according to its most recent statement.
“The unbundling initiative envisioned in the Department of Public Enterprises’ Roadmap is crucial to the long-term viability of Eskom’s company and the nation’s energy production and distribution.
“[Therefore], Eskom will continue to work with the National Energy Regulator of South Africa and the applicable creditors in order to satisfy these suspensive criteria and implement the Transmission unbundling as soon as practicable,” Eskom said.