Eskom reportedly has exorbitant debt that amounts to R419 billion. The power utility is not selling enough power to cover its costs.
It has been reported that the struggling power utility wants government to take on about R100 billion of its debt as part of a rescue plan.
Minister of Finance Tito Mboweni has recently said that Eskom should go to the bond markets for funds instead of seeking bailouts from the State.
Speaking on Morning Live, Economist Xhanti Payi says this is not a solution as the reason Eskom is asking government to take on some of the debt is because they are finding it difficult to borrow in the bond markets.
He says: “In any case, if you borrow and are unable to pay the back the money, that puts you in a worse position.”
He says Eskom needs to get a strategic partner that can give the company a cash injection.
He says unfortunately this is not something government is open to doing.
Morning Live extended an invitation to Eskom to talk about the report but they declined saying they are currently in discussion with critical stakeholders.
For more on the interview watch below
