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Nene unveils Eskom’s R23bn bailout strategy

The finance minister says money will be raised by selling what Treasury calls “non-core state assets”.

Finance Minister Nhlanhla Nene delivers his 2015 Budget Speech in Cape Town on 25 February 2015. Picture: GCIS.

JOHANNESBURG - Finance Minister Nhlanhla Nene on Wednesday revealed that plans to find the R23 billion cash injection which Eskom needs are well-advanced.

Nene said the money would be raised by the sale of what treasury is calling "non-core state assets" and the amounts would be paid in instalments.

He said when the cash-strapped power utility approached the regulator this year, it would ask for a tariff increase.

Delivering his budget speech in Parliament on Wednesday afternoon, Nene reiterated that floundering state-owned companies would be financed by selling off state assets.

Nene wouldn't elaborate over which state assets will be sold off to raise cash for Eskom because the information is market sensitive, but he said Eskom would receive the R23 billion to be raised, in stages.

The first R10 billion is set to be paid in June and the remaining R13 billion, sometime before the end of the year.

Nene's also announced that higher electricity costs were on the cards.

"To stabilise its financial position, Eskom will apply to the regulator this year for adjustments towards cost reflective tariffs."

The finance minister told journalists here earlier today, there are also plans to get municipalities and government departments to pay up the billions they owe the power utility.