Eskom under pressure ahead of the national budget
A viable turnaround strategy, helped by the newly appointed task-team, is essential before the February budget
The government is pushing Eskom, which is R419bn in debt, to present a credible turnaround strategy before the February 20 budget presentation, a person familiar with the situation said. While the state-owned enterprise (SOE) has asked the national energy regulator for permission to raise power prices by 15% a year for three years, that amount would still leave the utility needing R100bn, the person said. The turnaround plan, initially scheduled for September, has been repeatedly delayed by management, and President Cyril Ramaphosa has appointed an independent panel to come up with solutions for the company. “That task-team is working vigorously to ensure it comes up with proposals,” Ramaphosa told reporters in Johannesburg on Wednesday. “Eskom has huge funding challenges.” Eskom is seen as critical to SA’s creditworthiness with two major credit ratings companies assessing the country’s debt as junk. A third, Moody’s Investors Service, still rates the country as investment grade.
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