Ordinary South Africans to bare the weight of Eskom’s debt. Eskom which is a South African state-owned power utility wants the government to take over about half of its R400 billion debt so it can accept support pledged by rich nations to help reduce dependence on coal and cut emissions.
It is set to get loan and grants of up to $8.5 billion in pledges by nations including the US and UK at the COP26 climate talks. At the end of March its debt amounted to R402 billion.
However the Eskom Chief Financial Officer Calib Cassim was quoted saying “It makes no sense to add more debt to the current R400 billion,”. “Government must take over R200 billion of it. It’s just like in one’s personal finances, where one has to make substantial progress with the payment of one mortgage before taking out another one, otherwise you are risk of defaulting,” he said.
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These talks have been going for over two years and no progress or consensus has been reached between the department of public enterprises and National Treasury about taking over some of its debt, City Press reported. Also no provisions were made for Eskom in the medium-term budget policy statement on Thursday.
However a suggestion was made by Finance Minister Enoch Godongwana who said Eskom should sell some of its coal-fired power stations to put it in a better position to finance its planned shift to cleaner energy.