By: Natasha Archary
Finance Minister Enoch Godongwana says South Africa will be taking on part of Eskom’s $24 billion debt.
This comes after the Energy Crisis Committee assembled on Monday, 01 August to address the power utilities unsustainable debt and the power crisis.
Godongwana said Eskom’s debt has to be dealt with or it will pose a threat to the state.
“If it is unsustainable, it poses a risk to the sovereign. To avoid that sovereign risk, the sovereign has to step in. That principle is kind of agreed.”
How much of Eskom’s insurmountable debt government will take on will be discussed further at the Cabinet lekgotla in September.
The Minister says a total of R2 billion had already been allocated to the state-owned entity, however Eskom requires R8 billion to conduct maintenance it says is crucial to end loadshedding.
News of Eskom’s mounting debt comes after months of rolling blackouts which further crippled the South African economy.
Costing the country more than R4 billion a day of Stage 6 loadshedding, the failing power utility says it cannot afford to operate without another government bailout.
In 2019, Eskom received a multibillion dollar government bailout.
Godongwana says one way to reduce Eskom’s debt is to sell some of its coal-fired power plants.
More details about how government plans on absorbing Eskom’s $24 billion debt will be detailed subject to Cabinet approval.
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