advertisement
Facebook
X
LinkedIn
WhatsApp
Reddit

Eskom to receive R23 billion government bailout

A R23 billion bailout package for troubled energy supplier Eskom which was proposed by finance minister Nhlanhla Nene in February has been approved by Parliament, paving the way for money to be released for maintenance and diesel fuel for backup power stations.

The National Assembly on Wednesday passed two bills, the Eskom Special Appropriation Bill and the Eskom Subordinated Loan Special Appropriation Amendment Bill, in order to give Eskom part of the funds it says it needs to keep the lights on.

Where is this money going to come from? Well, the government is going to sell off some publicly-owned assets to raise the cash. The only remaining issue is that it hasn’t revealed which ones.

Finance minister Nhlanhla Nene yesterday said that the assets will be made known by the end of June.

“Before the end of June, you will know which assets. The process followed a market sounding exercise held and we confirm the decisions we’ve taken was the correct one,” he told delegates.

Concerns have been raised, however, that the first R10 billion will also be delivered to Eskom before the end of the month, before the sale of assets is disclosed. Another R10 billion will delivered before December and the remaining R3 billion will be paid to Eskom sometime next year.

The Democratic Alliance (DA) and the Economic Freedom Fighters opposed the bill, with the DA’s Malcolm Figg calling for an end to the secret sale of assets.

“Why all the secrecy? We simply cannot allow the ongoing secrecy surrounding the ongoing sale of assets to go on,” he said.

The second bill that was passed, the Eskom Subordinated Loan Special Appropriation Amendment Bill, will see the Eskom’s overall debt reduced by R24.4 billion.

The second bill effectively amounts to debt relief for the utility, as it writes off an R60 billion loan made by government during the height of loadshedding in 2008, in favour of increasing the number of shares issued and held by the State. The government is already the sole stakeholder in Eskom.

Earlier this week, Eskom’s Acting CEO Brain Molefe appeared before South Africa’s National Energy Regulator asking for an increase in the price of electricity in order to raise extra funds for maintenance and costs in an ongoing public hearing which is expected to authorise or decline Molefe’s request on Monday.

[Image – CC by 2.0/Brian J. Matis]

advertisement

About Author

advertisement

Related News

advertisement