“This would be a big negative for markets. But ultimately, we expect government to take over R200 billion to R300 billion of Eskom’s debt. Strict conditionality must be imposed on this, however,” says Els.In an affidavit filed at court in response to a DA application to have the 18.65% Eskom tariff increase due for implementation on 1 April reviewed and set aside, Eskom CFO Calib Cassim discloses that Eskom’s debt had grown to R422 billion by the end of December.
The minister promised during his Medium-term Budget Policy Statement in October last year that government will take over between a third and two thirds of Eskom’s debt, saying he would give further detail during his budget speech, scheduled for Wednesday . He said all the scenarios that were considered were based on the revenue determinations made by energy regulator Nersa for Eskom for 2023/24 and 2024/25, showing increases of 18.65% and 12.74% respectively.
Intellidex expects some detail on the conditions, which may include Treasury sending some of its own experts to Eskom power stations to establish what can be done to improve their current poor performance.
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