Home South African Eskom’s debt increases to R488bn

Eskom’s debt increases to R488bn

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The power utility believes the electricity price needs to increase by around 25% in real terms.

Graphics Indy: Dieter Bertram

Power utility Eskom told Parliament on Tuesday that its gross debt stood at R488 billion as at March, up from R440bn recorded in March 2019.

In a presentation made to the appropriations committee meeting, Eskom said it paid R31.5bn towards principal debt and R39.1bn towards servicing interest.

“The bulk of these payments were made using the R49bn received from government. It should be noted that Eskom generated a positive operating cash flow of R36.2bn for the year,” read the report.

Chief financial officer Calib Cassim said the utility was appreciative of the total R188bn support it received from the government since 2008.

“We can meet our debt service commitment as and when it is due,” Cassim said.

He also said as per the cash flow statement, it was evident that without the government’s recapitalisation, Eskom would not have been in a position to meet its obligations.

“The R56 billion appropriated for the 2020/21 financial year will be used to assist in servicing the estimated R95 billion interest and capital repayments falling due in the 2020/21 financial year.”

Cassim also told MPs that in terms of requirements of appropriation for the last financial year, the cash flow statement was still a draft.

“What we highlight here is that from inflow cash from last year, Eskom generated R36billion from its operations. With government support of R49billion it used that to cover debt service commitments of R70.6billion with some balance from cash from our operations.”

He also said over the past financial year, Eskom raised a debt of R32bn to cover its investment in capital expenditure.

Cassim said Eskom believed the electricity price needed to increase by around 25% in real terms.

“We understand that it can’t go up in once-off adjustment and impact on the economy. However, we highlight the importance of the user-pay principle and for government to develop policies to protect vulnerable sectors and vulnerable communities together with policymakers and regulators.”

Political Bureau