Government says the R254 billion Eskom Debt Relief Bill will go a long way in helping the power utility to return to its former glory by supplying enough electricity to the country.
Last week, the National Assembly passed the draft Bill with 198 votes in favour of it and 23 votes against its approval.
The main aim of the Bill is to provide funding for debt relief for Eskom from the National Revenue Fund.
When the Bill was passed, Acting Finance Minister Mondli Gungubele said it is the government’s belief that this debt relief arrangement for Eskom, will help in alleviating the current energy crises.
He said the money will be phased out in stages over the period of three years.
“It remains our view, now that an optimally designed debt relief arrangement with the right conditions can be leveraged to support the structural reform of the electricity sector, that will enhance South Africa’s long growth prospects. Following extensive technical work and consultation in 2023 budget speech, the minister of finance proposed a total debt relief arrangement for Eskom of about R254 billion.”
“This proposed arrangement consists of two components. One is the amount of R1.84 billion, which represents Eskom’s full debt settlement requirement, in three trenches over the medium term. Secondly, as the direct take over of up to R70 billion of Eskom’s loan portfolio in 2025/2026,” adds Gungubele.
Government says it will impose strict conditions on Eskom to comply with the envisaged financial injection.
“Honourable chair, again there are several elements of the Eskom debt relief bill. And it is worth highlighting some of these here. Firstly, the bill proposes that the National Treasury advance the amount envisaged, as a loan to Eskom on the date determined by the minister. Secondly, the bill enables the minister to impose conditions for the conversion of portions or portions of the amount of the loan for each financial year into shares issued by Eskom to the state.”
“Thirdly, the bill requires that National Treasury in its quarterly report to the relevant parliamentary committee report on Eskom’s compliance with the conditions and disclose the amount of the conversion.”