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Eskom raises R5.2bln through loan drawdowns

The struggling utility, which supplies more than 90% of the electricity in the country, said liquidity position stood at R7.7 billion on 30 April 2019.

FILE: Picture: EWN.

JOHANNESBURG - Power utility Eskom said on Friday it had raised R5.2 billion through drawdowns against a portion of committed loans, R4 billion of which was received from China Development Bank (CDB), and the issuance of domestic bonds.

The struggling utility, which supplies more than 90% of the electricity in the country, said liquidity position stood at R7.7 billion on 30 April 2019.

President Cyril Ramaphosa said on Wednesday that he would use a new five-year term to speed up economic reforms and fix ailing state power firm Eskom, a week after his African National Congress (ANC) party was re-elected with a reduced majority.

Analysts have said reforms, like cutting red tape and overhauling Eskom, should be post-election priorities for the ANC, after a decade of slow growth and rising joblessness.

“We are in an economy that has not been growing... in an appreciable way. That troubles us,” Ramaphosa told investors at a conference in Johannesburg, acknowledging that South Africa’s regulatory framework had discouraged investment.

“We have to embark on the reforms, speed up,” he added. “We are going to ensure that the certainty that investors want to see is there.”

The government has pledged an R23 billion-a-year bailout for Eskom over the next three years. The utility had around R420 billion of debt last year.

“We have to address the issue of Eskom’s debt, which is precisely what we are doing now with our Treasury, with our lenders, because (Eskom) is too big to fail,” Ramaphosa said.

The president also reassured investors that the government’s land reform policies would not result in “land grabs”.

“There is no way we can invite foreign investors to come to our country - we say 'come and invest' - and tomorrow we take your land away, that is not going to happen. That is not sensible,” Ramaphosa said.

South Africa faces a long-term problem of boosting growth due to bottlenecks within state-owned companies. The biggest is in power utility Eskom, which might take longer to bring much-needed power generation on stream than previously anticipated.