- Public Enterprises Minister Pravin Gordhan reported to parliament yesterday that state owned energy utility, Eskom, has reduced its debt by R83-billion during the 2021 financial year.
- Eskom will continue to borrow from government to service debt.
- Eskom’s consumer debt continues to escalate which currently stands at R45.1 billion – of which 78% is owed by municipalities, 17% by Soweto.
- The legal separation of the transmission company would be completed by December 31, 2020.
- Komati Power Station to pioneer Just Energy Transition from coal to renewable energy sources.
Gordhan, speaking at the 2021 Public Enterprise Dept Budget Vote also announced that Eskom had made progress towards “functional restructuring”, with the divisionalisation of the utility into separate generation, transmission and distribution entities to be concluded by June 30.
“A total of 9 400 employees have been relinked with power stations with 6 773 employees moved from corporate functions to divisions in readiness for legal separation,” he reported. The legal unbundling of the transmission company would be completed by December 31, 2020, followed by distribution and generation companies, still under Eskom Holdings, by December 31, 2022.
“Eskom’s debt is one of the key priorities to return the entity onto a sustainable path. The entity is continuing to implement its cost reduction initiative, with a saving of R13,5 billion achieved in the 2021 financial year. Most notably was the R83 billion reduction in debt in the 2021 financial year, from R484 billion to R401 billion due to the repayment of the maturing debt and beneficial changes in the exchange rate.”
Eskom CFO Calib Cassim confirmed that the strategy to borrow from government to service debt remained in place which will be facilitated by maintaining a tight rein on capital expenditure over the period. “Within the borrowing plan we have also assumed government support to help us meet our maturity profiles in terms of our debt-service commitments.”
Gordhan expressed support for Eskom’s “Just Energy Transition” strategy and confirmed that the repurposing and repowering of the Komati power station was being prioritised as a pilot project under the strategy.
Link to full speech HERE
Author: Bryan Groenendaal