President Cyril Ramaphosa (far right) addresses members of the Eskom board on reforms at a meeting in Genadendal Residence, Cape Town, on June 18 2019. Picture: GCIS/JAIRUS MMUTLE
President Cyril Ramaphosa (far right) addresses members of the Eskom board on reforms at a meeting in Genadendal Residence, Cape Town, on June 18 2019. Picture: GCIS/JAIRUS MMUTLE

President Cyril Ramaphosa met with the Eskom board in Cape Town on Tuesday to discuss reforms, raising expectations that there will be a major announcement on the power utility in his state of the nation address (Sona) later this week.  

Eskom, which is in crisis, financially unsustainable and unable to service its debt from its revenue, is in a classic debt trap:  borrowing to finance interest payments. 

The power utility has now turned to the government to pay its debt redemptions for 2019/2020 — about R45bn.

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Eskom is one of the state-owned entities (SOEs) embroiled in the state-capture claims. Last month its CEO Phakamani Hadebe resigned and will be stepping down at the end of July. A replacement has not yet been announced.  

During his last Sona in February, Ramaphosa announced that Eskom would be remodeled and split into three entities dealing with generation, transmission and distribution. The three entities would exist under Eskom Holdings, with each allocated its share of the costs of the business. 

The announcement received backlash from unions. However, nothing has happened since the announcement. 

Presidency spokesperson Khusela Diko said the board presented a report at the meeting on the implementation of the nine-point plan, focusing on its key priorities, which are to ensure an uninterrupted power supply, to cut costs, to drive efficiencies and to increase revenue through, among other things, higher collection rates.

The nine-point turnaround plan was announced in November 2018.

Tuesday’s meeting with the Eskom board was also attended by finance minister Tito Mboweni, mineral resources and energy minister Gwede Mantashe, and public enterprises minister Pravin Gordhan. 

The meeting also called to “establish alignment across government on the actions to be undertaken to stabilise the energy utility in light of its financial and operational challenges”, Diko said. 

“The president has reiterated to the board that the energy utility, Africa’s largest producer of electricity and one of our nation’s most strategic assets, is critical to SA’s growth and development.” 

She said Ramaphosa would announce further measures to support Eskom’s efforts at recovery, as well as financial and operational sustainability.

quintalg@businesslive.co.za