Eskom’s debt burden set to balloon

Eskom’s financial situation will remain dire for the next few years, with a risk its debt burden would grow from R400 billion to about R550 billion, chief executive Phakamani Hadebe said yesterday.

Hadebe was briefing parliament’s portfolio committee on public enterprises on the utility’s financials and logistical woes.

Acting chief financial officer Calib Cassim said the problem was partly Eskom’s inability to service its debt from its earnings, forcing it to borrow more.

Cassim said Eskom hoped that its expenditure levels would stabilise within the next three years, once its new power plants were completed. But the picture was further clouded by the need for backlog maintenance.

Chief operating officer Jan Oberholzer said Eskom was implementing a nine-point strategy to deal with backlogs and declining energy availability, and that urgent maintenance work would see 59 planned outages. However, he said he didn’t foresee a need for load shedding in the near future.

Oberholzer said Eskom’s energy availability would dip to about 72% to 73% before the financial year was out and that it would continue to rely on diesel as an additional fuel source as coal levels remain critical.