‘If Eskom’s finances weaken, government’s risk exposure increases’
Any deterioration in Eskom’s financial position would increase the government’s "contingent liability" exposure by about R200bn, Finance Minister Pravin Gordhan cautioned on Tuesday. He said power-purchase agreements between Eskom and independent power producers (IPPs) were now categorised as contingent liabilities. The government’s total guarantees to state owned companies as at the end of June amounted to R469bn, Gordhan said in a written reply to a parliamentary question by DA finance spokesman David Maynier. This excludes the additional R4.4bn granted subsequently to SAA, bringing the national airline’s total state guarantee to R19bn. Gordhan noted that 67% of the total of R469bn had been issued to Eskom and 13% to the South African National Roads Agency Limited (Sanral). He explained that only the portion of the guarantees that these companies had borrowed against — known as the exposure amount — was a contingent liability to government. "Creditors can call on government to ser...
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