SA’s neighbours owe Eskom R632m

Foreign governments owe Eskom R632m in outstanding payments, public enterprises minister Pravin Gordhan said in reply to a parliamentary question published on Thursday.

Foreign governments owe Eskom R632m in outstanding payments, public enterprises minister Pravin Gordhan said in a reply to a parliamentary question published on Thursday.

DA MP Natasha Mazzone, who asked the question, said Gordhan’s reply revealed that the Zimbabwe Electricity Supply Authority (Zesa) owes Eskom R322m; the Mozambican national utility owes R221m; and the Zambian utility R89m.

Gordhan said that due to Zimbabwe’s economic and political challenges it has been unable to honour its debt obligations. “Eskom and Zesa currently have a payment plan agreement for the settlement of the debt and Zesa is paying off the debt as per the agreement.”

In the case of the Electricidade de Moçambique (EDM), which Eskom supplies with standby power, Gordhan said: “The utility has financial constraints due to their generation mix, which includes independent power producers [IPPs] that are contracted on a take-orpay basis.”

A take-or-pay basis means that the utility must buy power from IPPs even when the grid does not require it.

In the case of Zambia, utility Zesco owes Eskom for power supplied during a drought, while Eskom owes Zesco “for an energy imbalance [arising] out of managing the regional system”. The parties are in negotiation over a payment plan.

Gordhan said “funds could assist minimally with Eskom’s cash flows” and that “Eskom will ensure future contracts are designed to avoid build-up of debt”. Mazzone disagrees that the collection of these debts would have “minimal impact”.

“The reality is that every cent counts when the power utility has a mountain of debt in the area of more than R420bn. Half a billion rand is an astonishing amount of money and could, in the long term, go a long way in stabilising the financial woes at Eskom,” she said.

Mazzone said she has written to Gordhan to request that the payment plans are made public.

EVERY CENT COUNTS WHEN THE POWER UTILITY HAS A MOUNTAIN OF DEBT OF MORE THAN R420BN