TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      Signs Eskom crisis is creating diesel shortages

      30 June 2022

      Management shake-up at Absa

      30 June 2022

      Eskom ramps up load shedding as crisis deepens

      30 June 2022

      Alviva shares leap higher on R3-billion take-private offer

      30 June 2022

      Huawei, MTN to help build 5G-powered ‘smart mine’

      30 June 2022
    • World

      Graphics card prices plummet as crypto demand dries up

      30 June 2022

      Bitcoin just had its worst quarter in a decade

      30 June 2022

      The NFT party is over

      30 June 2022

      Samsung beats TSMC to 3nm chip production

      30 June 2022

      Napster plots crypto comeback

      29 June 2022
    • In-depth

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022

      Everything Apple announced at WWDC – in less than 500 words

      7 June 2022

      Sheryl Sandberg’s ad empire leaves a complicated legacy

      2 June 2022
    • Podcasts

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022

      Everything PC S01E04 – ‘The story of Intel – part 2’

      1 June 2022
    • Opinion

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022

      How AI is being deployed in the fight against cybercriminals

      8 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Sections»Energy»Eskom gets an emergency bailout

    Eskom gets an emergency bailout

    Energy By Agency Staff19 April 2019
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    Finance minister Tito Mboweni. Image: GCIS

    Less than a week after the CEO of Eskom declared “the days of surprises are over”, documents show the government was forced to pay R5-billion in emergency funds so the state-based utility could meet obligations.

    The payment on 2 April was intended to let Eskom to pay bills due at the end of March, and avoid a call on its existing guarantees after a loan expected from the China Development Bank failed to come through in time. The amount repaid a R3-billion bridge loan from Absa Group, according to a letter to parliament from finance minister Tito Mboweni and released by the Democratic Alliance.

    “The key here is that this news has been buried in parliament, though in the public domain it is exceptionally hard to find out, and not communicated openly with Eskom creditors,” said Peter Attard Montalto, head of capital-markets research at Intellidex. “Eskom is operating much closer to the edge than most investors realise. Given the blanket national treasury guarantee this is not an issue for Eskom, per se, but it is for the sovereign.”

    Given the blanket national treasury guarantee this is not an issue for Eskom, per se, but it is for the sovereign

    The government announced a record R69-billion bailout for Eskom in February to be paid over three years. Of that, R23-billion is pledged for the current financial year. Based on the 2% limit of the appropriated national budget, only R17.7-billion can be transferred. The remaining balance will have to be subjected to the normal appropriation process when parliament is constituted after the 8 May election.

    The R23-billion required a special bill that didn’t come up before parliament completed it business before the election. The national treasury had targeted disbursement between August and October 2019.

    “Because we are in recess for the election period we cannot process any new bills which have to go through a proper procedure of consideration and engagement with stakeholders,” Pinky Phosa, chairwoman of the national assembly appropriations committee, said by phone from Johannesburg. “The new parliament will have to consider these reports once it takes over.”

    Under pressure

    President Cyril Ramaphosa is under pressure to chart a new strategy for the money-losing utility while retaining the support of trade unions ahead of the vote. He also needs to preserve South Africa’s sole investment-grade credit rating with Moody’s Investors Service. Rating companies have cited Eskom as one of the biggest risks to the sovereign.

    Mboweni warned that Eskom doesn’t expect to be able to generate enough internal cash to meet its obligations over the next five years. The government and Eskom are in talks on how to secure the company’s “long-term financial sustainability”.

    “Even after accounting for funds raised, cash flow is not adequate to fund its capital expenditure programme,” he said.

    Adrian Lackay, spokesman for public enterprises minister Pravin Gordhan, said the ministry was “confident” that the China Development Bank would carry out its commitment to help capitalise Eskom.  — Reported by Colleen Goko and Paul Vecchiatto, with assistance from Antony Sguazzin, (c) 2019 Bloomberg LP

    Cyril Ramaphosa Eskom Peter Attard Montalto Phakamani Hadebe Pravin Gordhan Tito Mboweni top
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleScientists complete ‘extraordinary aquatic adventure’ in Indian Ocean
    Next Article It’s the end of the line for BBM as licensee pulls plug

    Related Posts

    Billetterie simplifies interactions between law firms and clients

    30 June 2022

    Graphics card prices plummet as crypto demand dries up

    30 June 2022

    Signs Eskom crisis is creating diesel shortages

    30 June 2022
    Add A Comment

    Comments are closed.

    Promoted

    Billetterie simplifies interactions between law firms and clients

    30 June 2022

    Think herding cats is tricky? Try herding a cloud

    29 June 2022

    How your business can help hybrid workers effectively

    28 June 2022
    Opinion

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    A proposed solution to crypto’s stablecoin problem

    19 May 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.