SOUTH AFRICA’S ESKOM NEEDS TO BORROW 72 BILLION RAND, SAYS CEO

CAPE TOWN– Eskom, South Africa’s State-owned power utility, has told Parliament that the appointment of a new board has resulted in it being viewed in a more positive light by investors and that in the past two months, it has been able to raise 43 billion Rand (about 3.69 billion US dollars).

It adds, however, that it still needs to borrow 72 billion Rand from the market to enable it to repay a 20-billion Rand loan and use the other 50 billion Rand for operational costs.

Eskom’s acting chief executive officer, Phakamani Hadebe, told the Parliamentary Committee on Energy here Tuesday that the willingness of markets to lend it the money is a positive step.

It indicates that the markets are beginning to welcome Eskom back into the financial markets. It also highlights that Eskom now can begin to diversify its funding because we are attracting various investors.

The power utility also told Parliament that the National Energy Regulator of South Africa (Nersa), had recently refused to grant Eskom’s request for a 19 per cent hike in power tariffs because of incorrect assumptions.

Hadebe told the Energy Committee that these included the assumption that Eskom would automatically close down two power stations and reduce its staff strength by 6,000 and cut its cost by 10 per cent.

The regulator also assumed that Eskom would have a cash flow of 32 billion Rand at the end of the 2018 and 19 financial years.

Hadebe said Eskom was, however, still hopeful that the misunderstandings with Nersa would soon be resolved. There’s a difference of opinion with the regulator on some of the numbers,” he added.

“Having raised the issues, we are comfortable that we will find a solution between us. It is important that at some point we find an equilibrium with the regulator so that we are able to plan a clear future going forward.

Source: NAM NEWS NETWORK