With government financial exposure to the power utility at R368.5 billion, this is serious for the country With news of state capture making headlines across South Africa, and the unexpected resignation of the state power utility’s CEO Brian Molefe, it was easy to overlook an annexure in the Finance Minister’s medium term budget statement dealing with government’s exposure to state owned enterprises, and some of the finer points of Eskom’s interim financial results.A closer look suggests that South Africa’s largest state owned enterprise may not be in as strong financial shape as generally thought.The power utility’s interim results show increasing costs and a decline in profits for the first half of the year. The relatively modest level of profits that were achieved provide little comfort when looking at a set of high probability risk factors unfolding over the next few years.These include the fact that about R40 billion of under-recovered costs that had been expected to be decide...

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