Eskom gets advance on loan, allowing it to keep going till end-February
Eskom has received an "advance" of R5bn from the Public Investment Corporation (PIC) and the Government Employees Pension Fund (GEPF)‚ the two bodies announced on Monday.
In a statement‚ the PIC and GEPF said they had agreed to advance Eskom the money as a "bridging facility" that would "fund the company’s operations during the month of February 2018".
"The PIC was approached by Eskom‚ which indicated that it was experiencing enormous liquidity constraints‚ which were threatening the company’s going concern status. Following the request‚ the PIC conducted its own due diligence and obtained approval in line with its mandate and corporate governance requirements. The GEPF and PIC boards take comfort from the fact that the bridging facility is fully backed by a government guarantee and that the pricing for this transaction is favourable to GEPF‚" the joint statement said.
But this is just a fraction of the funding the power utility needs.
"In addition to the bridging facility‚ Eskom has approached other lenders as the utility needs a total funding of R20bn. Three commercial banks have indicated that they are willing to further extend credit facilities to Eskom subject to the outcome of their respective due diligence processes‚ which are currently under way. The GEPF and the PIC will continue to closely monitor developments at Eskom‚" they said in the statement.
They added that the bodies were encouraged by recent changes at Eskom‚ including the installing of a new board.