Principled stand: Dan Matjila, CEO of the Public Investment Corporation, has insisted on adhering to sound investment principles and standing up to looters. Rumour has it he is earmarked to be pushed out of office. Picture: SUNDAY TIMES
Principled stand: Dan Matjila, CEO of the Public Investment Corporation, has insisted on adhering to sound investment principles and standing up to looters. Rumour has it he is earmarked to be pushed out of office. Picture: SUNDAY TIMES

Eskom has repaid the R5bn loan — with R30m interest — facility advanced to it in February by the Government Employees Pension Fund (GEPF) and the Public Investment Corporation (PIC).

The funds reflected in their bank accounts on March 1, the organisations said on Monday.

Sources told Business Day Eskom had incurred R30m in interest, but neither the power utility nor the PIC would confirm the figure, citing a confidentiality clause in their agreement.

The PIC, which manages assets on behalf of the GEPF, agreed in February to advance a R5bn bridging facility to Eskom for one month. The loan was used to fund February operations, and the power utility had approached banks to raise R20bn in liquidity.

The PIC advanced the bridging facility shortly after the shake-up of the Eskom board and management, which resul-ted in Jabu Mabuza being appointed chairman and Phakamani Hadebe interim CEO.

The Public Service Association was angered by the PIC’s decision to loan money to the power utility, saying Eskom has been in the red as a result of corrupt activities.

The PIC’s CEO, Dan Matjila, was later forced to apologise for entering into the loan agreement with Eskom without having consulted unions that represent workers whose pensions are invested by the asset manager.

Association deputy GM Tahir Maepa told Business Day on Monday the PIC had informed the union in February Eskom intended to repay the loan.

The association welcomed the repayment.

The GEPF and the PIC said the investment was in the best interest of the fund, SA and the economy as "failure of Eskom to service its debt would have resulted in a cross-default, with catastrophic consequences".

Cosatu agreed, having said in February that while it was committed to protecting workers’ pensions, it also had a responsibility towards Eskom employees who would have been negatively affected had the power utility not received the loan.

Eskom spokesman Khulu Phasiwe said on Monday that, when the power utility made the request to the PIC, "things were almost severe".

He explained that Eskom was desperate for a cash injection to complete the company’s daily operations.

"It came in at the right time and helped us achieve our objective. This is why after that other lenders came forward. The PIC loan gave them some kind of assurance," he said.

Last week, Eskom announced it had signed a R20bn short-term credit facility with a consortium of local and international banks.

Phasiwe said the next step for the power utility was to raise R70bn when its executives go back to the market to seek funds for the next financial year.

A big portion of the funds would be used to complete construction at Medupi and Kusile, according to Phasiwe.

"Many investors take a wait-and-see approach, but once one takes bold action such as the PIC, others can follow suit."

mahlakoanat@businesslive.co.za

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