Carol Paton Writer at Large

Public enterprises minister Pravin Gordhan and Eskom’s top leadership on Thursday declared that Eskom is in crisis with an unprecedented breakdown of old plants due to neglect and exceptionally poor performance of new units due to poor quality work by contractors. But although Gordhan gave an extensive briefing on Eskom’s operational difficulties, he did not provide answers on Eskom’s bigger problem, its financial crisis. The omission spooked bond holders, whose concerns are mounting as they may have to take losses on their holdings. The yield on its $1.25bn of eurobonds maturing in 2025 jumped an enormous 46 basis points to 9.35%. Yields on the benchmark government bond due 2026 rose 10 basis points as SA assets were hit by a broader global market sell-off. Eskom faces difficulties on all fronts. In the past three weeks it has been unable to meet the demand for electricity, leading to the return of load-shedding for the first time since 2016. The utility is also in the grip of a fi...

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