Eskom teetering on brink of debt trap, Hadebe says
Eskom CEO Phakamani Hadebe says that if the price of electricity is not increased over the next three years, the institution will struggle to improve its financial position.
CAPE TOWN – Eskom CEO Phakamani Hadebe says the power utility is teetering on the brink of a debt trap.
He says that if the price of electricity is not increased over the next three years, the institution will struggle to improve its financial position.
The company wants to hike the price of electricity by 15% in each of the next three years.
Hadebe told energy regulator Nersa at the start of nationwide public hearings in Cape Town on Monday, that all South Africans have a role to play in getting the company back on its feet.
He says the power utility has initiated a number of cost-cutting measures, but they are not enough to turn the institution around.
Hadebe's acknowledged 15% hike in the electricity price will be steep for many South Africans and has apologised for load shedding and other problems.
But he says, Eskom's debt continues to grow from R380 billion at the beginning of last year to currently R419 billion.
“And we are very close to a debt trap. What does this mean to South Africans? It means everyone has a role to play to ensure the sustainability of this glorious institution.”
Hadebe has told the public hearing that despite fierce opposition to another electricity price hike, power in South Africa is still among the cheapest in sub-Saharan Africa.
(Edited by Leeto M Khoza)