The government plans to provide Eskom with debt relief worth R254-billion to ease the utility’s worrying financial situation and provide it with the space to fund the maintenance of its power stations.
The government is already exposed to Eskom’s debt because it guarantees most of it . Lenders and banks have provided Eskom with debt on the basis that the government, or the taxpayer, would step in and pay for it if the power utility fails to do so. So, the government issues Eskom guarantees and would be on the hook for debt payments if the power utility enters a default scenario.
The Eskom debt relief measure will come at an extreme cost to the government as it will worsen its own debt profile. Over the past five years, the government has been on a mission to reduce and stablise its debt and expenditure. Its expenditure alone tends to go towards consumption measures such as paying SA’s 1.2 million public servants and paying down debt, instead of funding initiatives that can grow the economy and create jobs.
From 1 April 2023, Eskom will not be allowed to take on more or new debt from lenders and commercial banks because the intention of the relief measure is to ease its debt profile. Approval from Treasury needs to be sought if Eskom needs to borrow more money.
The debt hasn't gone away. It's just been transferred to the taxpayers.
Correction…the taxpayer takes over the debt
So we pay again. There had better be some results.
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BUDGET 2023 | Government takes up massive chunk of Eskom’s debtThe government has absorbed a massive chunk of Eskom’s R423bn debt, providing the ailing power utility with debt relief of R254bn in the next three years. When and how will this money lend to Eskom’s hands? I mean it should be there as in like yesterday… ffs we are in the dark already and economy of the country is getting worse by the day
Source: TimesLIVE - 🏆 28. / 59 Read more »
Budget 2023: Government takes up massive chunk of Eskom’s debtThe government has absorbed a massive chunk of Eskom’s R423bn debt, providing the ailing power utility with debt relief of R254bn in the next three years. Bazayifumana phi imali?
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