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Govt urged to give clarity on Eskom’s R69bn bailout

In the budget, Treasury announced that Eskom would be allocated R23 billion a year over the next three years.

FILE: Eskom chairperson Jabu Mabuza at a press briefing at Lethabo power station on 8 April. Picture: Abigail Javier/EWN.

JOHANNESBURG – The government has been called to give a directive to Eskom on what its R69 billion bailout should be used for after lower than expected tariff increases by energy regulator National Energy Regulator (Nersa).

In the budget, Treasury announced that Eskom would be allocated R23 billion a year over the next three years.

In March, Nersa announced a 9.41% increase for 2019/2020 and 8.10% and 5.22% respectively for the two years afterward.

Eskom has now raised concerns that it’s been put on a back foot by these tariffs and won’t be able to meet its obligations.

At Eskom’s briefing on the state of electricity supply, the utility’s board chair Jabu Mabuza said that one of the key assumptions the board made on revenue over the next three years was meant to come from tariff increases.

“One of the key assumptions that we’d made was that we’d get tariff increases of 17%, 15% and 15%. The gap between the two, what we’d hoped for and what we received, represents R102 billion.”

Energy expert Chris Yelland said that Nersa granted Eskom lower tariffs because in factored in the bailout from Treasury of R69 billion over three years.

“It’s a question of how this R23 billion is being treated on Eskom’s financial statement. Is it revenue or is it strengthening Eskom’s balance sheet?”

Yelland said that the only way for Eskom to reverse the decision by Nersa is for government to give clarity on the purpose of the bailout and for the power utility to take the matter to court.

The energy regulator is expected to give clarity on this matter soon.

(Edited by Zamangwane Shange)

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