South African state power utility Eskom aims to slash debt to 200 billion rand ($11.2 billion) from about 450 billion rand now, it said in a presentation on Thursday, as it struggles to recover from a deep financial crisis.
Eskom generates more than 90% of the electricity in Africa’s most industrialised economy but has battled to keep the lights on, a factor that helped push South Africa into recession even before the coronavirus crisis struck.
Eskom’s problems are among the biggest challenges for President Cyril Ramaphosa, who has been trying to rebuild investor confidence after a decade of scandals and policy missteps under his predecessor, Jacob Zuma.
Eskom did not say in the presentation how long it would take to halve its debt or how it aimed to achieve it.
The company listed among its objectives reaching a 35% earnings before interest, taxes, depreciation and amortisation (EBITDA) margin, without specifying a time frame.
Chief Executive Andre de Ruyter told a news conference the utility would start a “renegotiation process” with independent power producers to try to lower electricity costs for South African consumers.
Power demand had fallen by an average of 6,000 megawatts because of the economic impact of the coronavirus crisis, Chief Operating Officer Jan Oberholzer said.
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