Eskom unable to service R450 billion debt

The power utility Eskom is unable to service its debt of about R450 billion and has to borrow to pay it. This was revealed by Eskom’s acting CEO and board chairperson Jabu Mabuza in Parliament.

Joint Appropriations and Public Enterprises Committees to discuss Special Appropriations Bill of #Eskom aiming to give the power utility R59bn over next two years. Minister Pravin Gordhan and Eskom boss Jabu Mabuza are also here. #sabcnews pic.twitter.com/AjzL0KXNni

— Bulelani Phillip (@BulelaniPhillip) September 10, 2019

Mabuza is briefing Parliament’s joint committee on Public Enterprises and Appropriations on the special appropriation of R59 billion for Eskom over two financial years.

He’s told the committee about Eskom’s liquidity challenges.

“Our debt situation is reaching R450 billion. The cash that we generate from business, we are not able to service the debt hence we find ourselves having to borrow to pay the debt. Our revenue over the past ten years has been flat to 1% a year and the tariffs have not been cost effective.”

Mabuza says there are some African countries who are interested in buying R128bn of electricity per week from #Eskom but he says they must probe whether there is capacity to do so. #sabcnews

— Bulelani Phillip (@BulelaniPhillip) September 10, 2019

Mabuza says the new #Eskom business model requires a “high performance culture” where people work according to targets and if not achieved there is consequences. He says for now let’s not waste time about wanting to know what caused the power utility to be where it is. #sabcnews

— Bulelani Phillip (@BulelaniPhillip) September 10, 2019