Eskom needs R20 billion to keep the lights on

Eskom needs R20 billion to ensure it can continue operating beyond March, according to the Rapport newspaper.

The utility said it will rely on government bonds that have already been issued, but not used, to raise the money.

It has government bonds of R350 billion, of which R211 billion was used by December to back loans for construction projects.

The Treasury has said the government bonds are only for capital projects, however, and it will not allow Eskom to use them for running costs.

Data from the JSE shows that Eskom will have to pay significant amounts to cover the interest of its securities:

  • R971,967,172 between 25-31 January
  • R594,309,122 in February
  • R1,870,543,405 in March
  • R1,703,880,518 in April
  • R130,746,832 in May

Further exacerbating the problem is that the National Energy Regulator of South Africa approved a 5.23% increase in electricity tariffs with effect from 1 April, while Eskom asked for 19.9%.

Finance Minister Malusi Gigaba has also said there is “absolutely no way” the government is going to come up with the money to capitalise Eskom.

“Obviously what they are doing is to wreck the company with the expectation that government, as the shareholder, is going to come to the party,” said Gigaba.

The Department of Public Works said it is working with Eskom and the Treasury to formulate a plan to rescue Eskom from its liquidity crisis.

Now read: Eskom chair quits “in the good interest” of South Africa

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Eskom needs R20 billion to keep the lights on