Yesterday, South Africa's Treasury has stated it will take over more than half of Eskom's multi-billion-dollar debt. This is an attempt to ensure the energy utility's viability and curb the energy crisis that has put a break on national growth. Eskom, which provides almost all of South Africa's electricity, is faced with a 400-billion-rand debt.
In a mini budget statement, Finance Minister Enoch Godongwana said government has decided to give Eskom 225 billion rand ($12.4 billion) towards its debts for the period 2019 to 2026. "The program will allow Eskom to focus on plant performance and capital investment," the minister said before parliament, adding the debt takeover will ensure the company no longer relies on government bailouts.
"The debt takeover, once finalized, together with other reforms will ensure that Eskom is financially sustainable," he added. Recurring power outages, caused by failures at ageing and poorly maintained Eskom infrastructure have worsened in recent months. South Africa’s projected economic growth for this year is 1.9 percent, down from 4.9 percent in 2021.
"The intensity of load shedding is having a disastrous effect on our economy," said the minister. Economists have welcomed the government's move on Eskom, but said more needs to be done.
Source: news.yahoo.com