Cape Town: In a desperate attempt to assist ailing Eskom, the government has extended R254 billion in debt relief to the struggling parastatal.
In his Budget speech for the 2023/4 fiscal year, Finance Minister Enoch Godongwana said the Eskom debt takeover would be spread over the next three years and was subjected to strict conditions.
The conditions include the requisite of Eskom to prioritise capital expenditure in transmission and distribution during the debt-relief period.
Eskom was also mandated to focus on maintenance of the generation fleet to improve availability of electricity. It must implement the recommendations emanating from an independent assessment of its operations, which has been commissioned by the National Treasury.
During this period, Eskom would be barred from borrowing money, in accordance with the guarantee framework.
“Eskom will not need further borrowing during the relief period. Government will finance the arrangement through the R66bn baseline provision announced in the 2019 budget, and R118bn in additional borrowings over the next three years,” said Godongwana.
The minister said that with the measures being put in place and planned investments, Eskom’ generation capacity was expected to add about 6 000MW to the national grid.
According to the National Treasury, the arrangement was purely a “balance sheet“ transaction and not a spending appropriation.
“The goal of the Eskom Debt Relief Bill is to strengthen the power utility’s balance sheet, enabling it to restructure.”
On Sunday, Eskom announced stage 6 load shedding until further notice, after the loss over 20 000MW in generation capacity due to breakdown in units and as well as those that are off-line due to planned maintenance.
Weekend Argus