Eskom fails to meet conditions attached to R59bn bailout

Eskom CEO Andre de Ruyter. The power utility is dragging its feet on meeting some of the conditions attached to it receiving R59bn from the government last year.
Image: REUTERS/Sumaya Hisham

Eskom has failed to meet some of the conditions attached to the R59bn it received from the government last year to service its debt through the special appropriation bill.

This has been disclosed to parliament by the National Treasury’s chief director of state-owned enterprises oversight, Ravesh Rajlal, during a meeting with Eskom and the standing committee on appropriations.

Rajlal said the cash-strapped power utility has now postponed the deadline to dispose of the Eskom Finance Company (condition six) from the end of March this year to end of March 2021.

Finance minister Tito Mboweni imposed the disposal of the Eskom Finance Company as one of the condition attached to the R59bn, saying it was not core to the utility’s operations.

Eskom Finance Company provides financial services to the energy firm’s employees, such as home loans, vehicle insurances and other related products.

Rajlal said the power utility was still struggling to find a suitable buyer of Eskom Finance Company.

“They were not able to dispose with that. They are now in a new bidding process and we understand that that target date is now moved to the end of March 2021,” he said.

Rajlal said Eskom had also not complied with condition 16, which was about the implementation of “remuneration standards”, with the delay being the awaited approval from the department of public enterprises.

He also reported “partial compliance” by Eskom on the conditions attached to cost containment and construction completion plans for the Medupi and Kusile power plants.

The department of mineral resources & energy has started the process to procure 2,000MW of “emergency power” and R40bn in investment. The department said it is an “emergency power procurement programme”, but in the finer details the power is set to only kick in from about June 2022. Here’s what you need to about SA’s ’emergency power’ procurement. 

By Thabo Mokone

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