Gordhan: Eskom will continue to need short-term bailouts until it's stabilised
Public Enterprises Minister Pravin Gordhan said that more extensive future plans for the utility will only become clearer in May.
JOHANNESBURG - Public Enterprises Minister Pravin Gordhan says that Eskom will not be able to manage financially on its own and will continue to rely on short-term cash injection until it is stabilised.
In February, the government promised the parastatal R23 billion a year bailout over the next three years. The first amount will start reflecting in its account from August.
However, Gordhan said that this will not be enough to keep Eskom afloat and that it will need more short-term cash injections.
In March, Eskom was forced to turn to the government for an emergency bailout after failing to secure an R7 billion loan from the China Development Bank.
Eskom is sitting with an R419 billion debt at the moment.
Gordhan said that more extensive future plans for the utility will only become clearer in May.
“There’s a lot of intensive technical work that’s been going on between Treasury, Public Enterprises Department and a number of external players. That technical work will be made public once the elections are over. When we have a new administration in place, we’ll then put forward a formula that’ll give more assurance on the medium and longer-term trajectory of Eskom.”