• Eskom will receive R184 billion in loans from National Treasury until 2025.
• In return, Eskom will need to hand over ordinary shares to Treasury.
• This Act has been signed as things at Eskom start to stabilise, or at least that’s what it looks like from the outside looking in.

Last week President Cyril Ramaphosa signed the Eskom Debt Relief Bill into law and it became the Eskom Debt Relief Act 7 of 2023.

As far as acts go, this one is rather short and succinct, but it gives Eskom access to a huge amount of money that is meant to be used to right the sinking ship.

The Act gives National Treasury the ability to give Eskom the following amounts from the National Revenue Fund, provided Eskom meet certain conditions.

Eskom will receive three loans as follows:

• R78 billion for the 2023/24 financial year,
• R66 billion for the 2024/25 financial year,
• R40 billion for the 2025/26 financial year.

That amounts to R184 billion over the course of three years. To pay these loans back, Eskom will need to give National Treasury ordinary shares in the company that are worth the loaned amount. However, the utility will also need to meet certain conditions both before and after the loans are issued.

With Eskom’s total assets and liabilities being worth R833 billion as of September 2022, and income for six months in that same period at R5.8 billion National Treasury will own a nice portion of Eskom if all the pieces fall into place as intended.

Meanwhile, things at Eskom appear to be getting better. The utility has managed to reach an energy availability factor of 70 percent and more and more capacity is coming online. Loadshedding during the day has been mostly suspended with blackouts now only happening between 16:00 and midnight to cope with increased demand.

With chilly weather hitting Gauteng this week, the utility is going to be put to the test as demand may just increase as folks turn on heaters and switch kettles on to fight the cold. With that having been said, a planned water outage in the city will have thousands of geysers switched off, demand should be lower than normal.

We’re just hopeful that Eskom can maintain this trend where the lights remain on, especially for business owners who have to install backup power solutions at great cost.