Eskom – No bailouts from 1923 to 2008, now it needs R49 billion in 1 year

For nearly a century, Eskom was a world-class power producer. The power utility was so successful that by the end of 1990 it was supplying more than half the electricity in Africa.

It was also highly efficient. In 1994, Eskom promoted the fact that it was the world’s lowest-cost producer of electricity.

This well-run company did not need any financial support from the government from 1923 when it was started to 2008.

Things started to change in 2007/2008, which coincided with the introduction of load-shedding because of chronic power shortages.

Corruption, incompetence, and political meddling started to crush this once-proud institution and brought it to the brink of collapse.

Professor Anton Eberhard, an energy policy and investment specialist from the Power Futures Lab at the University of Cape Town, highlighted how Eskom deteriorated:

  • Eskom received no financial support between 1923 to 2008.
  • Over the last decade, Eskom received R83 billion.
  • This year, Eskom received R49 billion.
  • Eskom will receive another R112 billion over the next three years.

Unsustainable bailouts

Eberhard said the situation is completely unsustainable and expressed surprise at how quickly bailouts for companies like Eskom and the SAA have become part of the national budget.

He added that Eskom and the SAA were historically financed by capital markets with cost recovery from consumers, as with any other company.

The table below shows the Eskom bailouts and re-capitalizations since the company was formed in 1923.

Eskom Bailouts and Re-Capitalizations
Year Bailouts
1923 to 2008 No bailouts
2008/2009 R10 billion
2009/2010 R30 billion
2010/2011 R20 billion
2012/2013 R0.7 billion
2015/2016 R23 billion
2019/2020 R49 billion
2020/2021 R56 billion
2021/2022 R33 billion
2022/2023 R23 billion
Total R244.7 billion

Now read: Eskom CEOs from 1985 to 2020 – The problem is clear

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Eskom – No bailouts from 1923 to 2008, now it needs R49 billion in 1 year