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Mboweni: 'Support for Eskom could reach R230bn over 10 years'

This amount is far higher than the R69 billion over the next three years that the Finance Minister announced in his Budget speech yesterday.

Finance Minister Tito Mboweni addressing the media prior to his annual Budget speech taking place on 20 February 2018 in Cape Town. Pictures: Cindy Archillies/EWN

CAPE TOWN - Finance Minister Tito Mboweni has told Parliament’s finance committees that financial support for Eskom could amount to R230 billion over the next 10 years.

A Treasury official later clarified the matter, saying Eskom needs financial support to the tune of around R150 billion. Amortised over 10 years, this amounts to R23 billion a year.

This amount is far higher than the R69 billion over the next three years that Mboweni announced in his Budget speech on Wednesday.

Mboweni has confirmed that Eskom’s likely to need financial support over the next decade.

“We are not going to wait for the restructuring to be done. Eskom needs assistance now. That’s why we are providing the R23 billion per annum over the next three years, which we are sure about – but that will continue for the next 10 years which will come to around R230 billion, but we wrote in the book (Treasury’s Budget Review) R69 billion.”

A look a the big numbers coming out of the 2019 Budget speech.

The acting head of Treasury’s Budget Office Ian Stuart clarified: “Eskom needs balance sheet support of around R150 billion – if you amortise that over 10 years, you get R23 billion per annum and that’s what we’ve pencilled into the framework."

Stuart says much depends on Eskom’s restructuring, long-term tariffs, economic growth and energy demand with a lot still to be worked out.
WATCH: 2019 Budget in 60 seconds with Bruce Whitfield

(Edited by Mihlali Ntsabo)

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