Eskom can become a beacon for a low-carbon transition
If the crisis at the power utility is controlled, SA can still have a brighter future
SA faces a pivotal moment as Eskom’s debt crisis and the recent bout of load-shedding threaten to trigger financial shocks that could end up on the state’s balance sheet. But the power utility’s plight is a just a ripple in a wider pattern of financial risks that are emerging in SA and beyond. In 2017 Standard & Poor’s and Fitch downgraded SA. Friday this week may yet prove to be another day of reckoning if Moody’s strips the country of its last investment grade rating. That downgrade would make borrowing more expensive, further reducing the Treasury’s options to balance the books just as the country starts to recover its confidence under President Cyril Ramaphosa. If a downgrade is avoided and the immediate emergency at Eskom can be brought under control, SA can look forward to a brighter future. Around the world there are many who argue that the low carbon transition is not compatible with economic development. SA, as a major exporter of coal, is no exception. But there is also a ...
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