South African Treasury Confident Eskom Has Turned Around its Financial Misfortunes

The committee has today received an update on the payouts, which have now been reduced by R24 billion through changes made in an amendment bill tabled by the finance minister as part of the national budget bills in March.

CAPE TOWN - The National Treasury has expressed confidence that power utility Eskom has turned around its financial misfortunes since it was granted a three-year R254-billion bailout in 2023.

It’s told the standing committee on appropriations that the advances made so far have been used effectively, and the National Treasury no longer fears its financial collapse.

On Wednesday, the committee received an update on the payouts, which have now been reduced by R24 billion through changes made in an amendment bill tabled by the finance minister as part of the national budget bills in March.

By the end of March, the government had released R140 billion to Eskom as loans to service debt and make interest payments.

The failure of the company to reduce the loan book of its financing company has, however, led to a R4 billion reduction in the amount expected to have been paid out by this time.

The National Treasury's director, Jeffrey Quvane, says Eskom has made good progress with its bailout and is mostly sticking to the loan agreement terms.  

"At this stage, we are seeing that the entity has been able to turn around. It is now a going concern. It has closed the financial year ending the 31st of March on a comfortable cash position."

Quvane says the National Treasury expects Eskom to profit once its books are audited for the 2024 financial year.

A R70 billion payout the National Treasury was still expected to be made in this financial year will, according to the Amended Debt Relief Bill, be reduced to two payments of 40 billion rand this year, and a further ten billion rand in 2028.