Eskom is too big to fail and the government has little option but to restructure its debt, World Bank country director Paul Noumba Um said at the release of the bank’s economic update for SA on Tuesday. “This is a case of being too big to fail. The SA economy cannot afford to allow Eskom to fail. The way forward entails a debt-restructuring aspect and the company becoming more efficient,” said Noumba Um. Eskom has suggested that the government take over R100bn of its R419bn debt to reduce the burden of interest repayments and put its finances on a more sustainable footing. A task team set up by President Cyril Ramaphosa is considering the company's options and is to report soon to the cabinet on proposals. Included in the package will be proposals on debt, tariffs, cost savings and the restructuring of the energy sector. Noumba Um said the Eskom debate was going “in the right direction, because all aspects are being looked at, including the sector”. The update projected GDP growth f...

Subscribe now to unlock this article.

Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).

There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.

Cancel anytime.

Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.