Eskom boost a promise kept

FRESH from a tongue lashing by the National Energy Regulator of South Africa (Nersa) this week, Eskom was given a shot in the arm with a R23 billion cash injection into its coffers.

The money came from the sale of government’s 13.91 percent stake in Vodacom to the Public Investment Corporation (PIC) to raise funds for the embattled Eskom.

In his budget speech in February, Finance Minister Nhlanhla Nene committed to sell non-strategic assets to raise R23bn for Eskom.

The ACDP said it supported the government’s decision on the sale as it had committed to dispose of non- strategic assets.

ACDP MP Steve Swart said the party did not want the government to go against its word as this would have impacted on the budget deficit.

“We had raised reservations where the money would come from, and we are pleased it would not come from the fiscus,” said Swart.

But Malcom Figg, of the DA, said there were more questions than answers on the sale of the Vodacom stake. Figg said he was going to write to Nene requesting details of the transaction.

The start of the week was not a good one for Eskom after Nersa rejected its application for a 25.3 percent tariff hike.

Nersa did not budge to Eskom’s assertion that its refusal to increase the tariffs would lead to more load shedding. But industry experts said this week they were pleased Nersa did not fall for Eskom’s threats.

The power utility

has been asked to submit a more detailed request for tariff hikes.

The sale of the 13.91 percent Vodacom stake to the PIC followed the approval of two laws in Parliament last week, injecting cash into the company.

Parliament first endorsed the Eskom Appropriation Bill, that allowed for the cash injection of R23bn to Eskom by government through the sale of non-core assets.

The second legislation was on the conversion of the R60bn loan into equity.

The government had granted Eskom the loan in 2008, but it decided to convert it into cash for the power utility to improve its financial situation.

Despite the billions thrown into Eskom, the power utility still has a funding gap of R280bn.

But the guarantee given to Eskom a few years ago still allows it to raise this money from the capital markets to fund its build programme.

The construction of the Medupi and Kusile power stations has been delayed for several months due to strikes and other problems on the ground.

But the government was still committed that the completion of the power stations would make the deadline of 2021.

The completion of the two power stations and Ingula are expected to add more generation capacity to the national grid.

We had raised reservations, and are pleased the money is not from the fiscus