Govt to ease Eskom's financial woes

A cash injection or loan guarantee could ease the cash-strapped power utility’s problems.

Eskom's Arnot Power Station in Mpumalanga. Picture: Supplied.

CAPE TOWN - Public Enterprises Minister Lynne Brown says Eskom should know by September how the government plans to ease its financial problems.

Brown says the options include a cash injection or a loan guarantee that will allow the cash-strapped power utility to borrow on the markets.

The minister was speaking to Members of Parliament (MPs) after Eskom officials briefed Parliament's energy and public enterprises committees on Tuesday.

The government is racing against time, to come up with a plan to shore up Eskom's bottom line.

Brown says a decision is needed before September.

"September is when the credits rating agencies will come along and they'll either be downgrading Eskom and the country or it will be saying we're okay."

She says among the options are giving Eskom a cash injection or a loan guarantee so that it's able to borrow the money it needs to finance its build programme

Eskom says a major problem is that the price consumers pay for electricity is less than it costs to produce.

It wants tariffs to reflect that.