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Mboweni: Eskom not currently financially sustainable, needs extra R59bn

Finance Minister Tito Mboweni warned the money for Eskom would come at significant cost to the fiscus and taxpayers alike, especially as preliminary indications show tax revenue would be less than budgeted for in February.

FILE: 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 said Eskom was currently not financially sustainable and needed an extra R59 billion over the rest of this financial year and next year.

Mboweni told Parliament that Eskom would require R26 billion for the rest of this year and R33 billion for the 2020/2021 financial year.

Mboweni introduced his Special Appropriations Bill for Eskom financial aid in the National Assembly on Tuesday morning. He said the appointment of a chief restructuring officer for Eskom could be announced later in the day.

A somber Mboweni warned the money for Eskom would come at significant cost to the fiscus and taxpayers alike, especially as preliminary indications show tax revenue would be less than budgeted for in February.

“This could substantially increase the government borrowing requirement for 2019/2020, which will require government to revise its funding strategy and current weekly bond issuance levels before the MTBPS in October,” Mboweni said.

“What I am trying to indicate here, colleagues is that we’re facing a very serious financial situation,” he added.

The R59 billion for Eskom is a significant portion of the R230bn over the next decade that the government has committed to giving the ailing power utility but Mboweni said that Eskom needed to raise more money and for that, it must be a going concern.

“Therefore, this Special Appropriation Bill requests approval for additional financial support for Eskom as follows: an additional R26 billion in 2019/20 financial year and R33 billion in the 2020/21 financial year,” he said.

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