Finance Minister Enoch Godongwana’s 2022 Medium-Term Budget Policy Statement

W

walterl

Expert Member
Joined
Oct 19, 2006
Messages
1,582
Some things never change, I watched a bit of the speech and at one stage they showed the people listening to it and quite a few were sleeping
 
The_Right_Honourable_Brit

The_Right_Honourable_Brit

High Tory
Joined
Mar 6, 2004
Messages
41,689
daveza said:
So govt takes 2/3 of Eskom's debt.

And so ?
Click to expand...

Basically allows Eskom to borrow for capex and proper (not on the cheap) maintenance.

More broadly, the government plans to take over a portion of Eskom’s debt, National Treasury unveiled in the Medium-Term Budget Policy Statement on Wednesday. In practical ways, a portion of Eskom’s debt will be moved from the power utility’s financial books or balance sheet to that of the government.

A solution to Eskom’s debt problem was first promised in late 2019 by former finance minister Tito Mboweni. But for many years a credible debt solution was never announced while Eskom’s financial and operational problems worsened.

Eskom’s debt stood at R356.8-billion in 2021, according to its last published annual financial statements.

Taking over a portion of Eskom’s debt will give the utility the space and opportunity for it to be financially sustainable, Treasury has argued. Eskom doesn’t generate enough revenue from electricity sales to cover its debt and interest payments.

Its large debt load also makes it difficult for the utility to raise money from investors to fund its operations, including paying for the maintenance of its old and creaking power stations. Investors in debt capital markets are also wary of lending Eskom money because its debt problems make the utility likely to default on repayments, heightening its risk profile.

But with a portion of its debt transferred to the government’s financial books, Eskom’s risk profile might improve. “[It] will allow Eskom to implement planned capital investment and critical maintenance and ensure that the company no longer relies on government bailouts,” Treasury said.

The debt transfer will allow Eskom to raise money in capital markets to fund the shutdown of coal-fired power stations that have reached their end-of-life cycle and explore refurbishing them into renewable energy projects.
Click to expand...

www.dailymaverick.co.za

MTBPS: Mini budget – The government plans to take over a portion of Eskom’s debt to ease the burden

Eskom’s debt stood at R356.8-billion in 2021, according to the power utility’s last published annual financial statements. The government plans to take over a portion of Eskom’s debt and transfer it to its financial books. But this plan still has many holes in it.
www.dailymaverick.co.za www.dailymaverick.co.za
 
Mike Hoxbig

Mike Hoxbig

Honorary Master
Joined
Apr 25, 2010
Messages
43,328
When was the last time we had a budget that focused on the country instead of SOEs?
 
Zophos

Zophos

Expert Member
Joined
Jun 3, 2017
Messages
2,113
Creag said:
If there weren't already, taxpayers are doomed. Poverty awaits.
Click to expand...
Yup, a whole generation, cooking on gas stoves and by candle light, paying tax for the previous generation's electricity use...:unsure:

Edit: Ok, I sound like some doom prophets. My apologies...
 
Benedict A55h0le

Benedict A55h0le

Executive Member
Joined
Oct 21, 2020
Messages
6,199
Zophos said:
Yup, a whole generation, cooking on gas stoves and by candle light, paying tax for the previous generation's electricity use...:unsure:

Edit: Ok, I sound like some doom prophets. My apologies...
Click to expand...
You don`t sound like a doom prophet. Just a realist.
 
You must log in or register to reply here.
Top