Date: Apr 08, 2019
Eskom is trapped in a “death spiral” as it is borrowing money just to pay off older debts, said energy expert Anton Eberhard at this week’s Eskom briefing.
“Something has to give,” he said.
Eberhard is a member of President Cyril Ramaphosa’s Eskom Sustainability Task Team, which is entirely separate from Eskom’s own technical team, and is focused on the longer-term prospects of the power monopoly.
Provisional findings include that Eskom will eventually have to receive some kind of “blended finance” – meaning more non-commercial loans from development lenders.
Eskom needs debt relief
Public Enterprises Minister Pravin Gordhan said that he could not speculate about what form alternative financing might take as it would be inappropriate to “put rumours in the market”.
Eskom’s debt servicing costs would escalate as time passes due to the firm’s deteriorating creditworthiness, said Eberhard.
A lot of the debt now being serviced is made up of relatively cheap loans Eskom received when it still had an investment-grade credit rating.
