SOUTH African power utility, Eskom, has been allocated an additional R59bn over the next two years in order it can service debt, said Reuters citing a special appropriation bill that it had seen.
Eskom, which supplies more than 90% of the country’s electricity but was forced to implement power cuts this year, fails to generate sufficient profit to meet its debt servicing costs and has required state cash injections to stay afloat, said the newswire.
The latest allocation, sourced from the government’s National Revenue Fund, provides R26bn billion rand for the 2019/20 financial year and R33bn for 2020/21, said Reuters.
“For the purpose of promoting transparency and the effective management of the amount … the Minister of Finance, in writing, may impose conditions to be met by Eskom before any part of the amount is transferred,” the bill read.
Finance Minister Tito Mboweni is expected to discuss the bill in parliament on Tuesday (July 22), said Reuters.
Beyond the cash injections, South Africa is also weighing other support options for Eskom including swapping the firm’s debt for government bonds or ring-fencing it in a special account, a senior treasury official said earlier this month.
