Another Eskom bailout will have to be conditional, says Godongwana
Finance minister Enoch Godongwana said National Treasury is stuck between a “rock and a hard place” on whether to give Eskom another bailout.
CAPE TOWN - Finance minister Enoch Godongwana said National Treasury is stuck between a “rock and a hard place” on whether to give Eskom another bailout, which could bring the country down with it if not supported.
For this reason, he said, they will attach certain conditions to the future financial support for the struggling power utility.
The finance minister was addressing Members of Parliament (MPs) on Thursday, a day after tabling his Medium-Term Budget Policy Statement (MTBPS).
Tabling the MTBPS on Wednesday, Minister Enoch Godongwana said to ensure Eskom’s long-term financial viability, the government will take over a significant portion of the utility’s R400 billion debt.
Godongwana said on Thursday that failing to do this would expose the country.
"Do we have a choice? We are [stuck between] a rock and a hard place. If we don’t intervene, that’s why some people say it’s too big to fail, Eskom may default and in doing so drag the sovereign with them."
He told MPs that Eskom had received billions in support in the past.
"As we stand up to this financial year Eskom has been given R230 billion to date."
Godongwana said the government would have to manage trade-offs after spending most of its money on bailing out state-owned entities and on social grants.