faces the task of incorporating a credible debt-relief plan for Eskom in the national budget while stabilising government finances as record blackouts weigh on the economy.
Reducing Eskom’s liabilities will allow the loss-making company to raise funds to carry out plant maintenance and strengthen the power grid. But it will also add to the state’s overall debt burden of almost R5-trillion and to its debt-service costs, the fastest-growing expenditure line item for about a decade.
Godongwana has previously said national treasury will make relief contingent on Eskom meeting performance targets and the transfer of funds will be staggered. He doesn’t envision the utility’s bondholders being asked to take haircuts, which would be tantamount to a default.