PIC concerned about suggestions that it will bail out Eskom

The Public Investment Corporation (PIC) said on Thursday that it is concerned about not being consulted regarding a proposed R250bn bailout for ailing state electricity utility Eskom.

BusinessLIVE reported that on Thursday the PIC said it was willing to engage about a solution for ensuring that Eskom does not pose a systemic risk to SA’s economy, but that it is also obligated to prudently manage the money of its clients.

Union federation Cosatu has proposed a plan to use R250bn of pension money managed by the PIC to pay down Eskom’s debt in return for a range of undertakings by the government, which has been received favourably by President Cyril Ramaphosa, Business Day reported earlier in February.

Cosatu has suggested that about 7% of the R2.2-trillion managed by the PIC, together with contributions from the Industrial Development Corporation (IDC) and Development Bank of Southern Africa, be invested in a special-purpose vehicle that would take over R250bn of Eskom’s debt.

“Should the PIC receive a proposal to further invest in Eskom, the PIC will follow its governance process as outlined in the investment mandates to arrive at a decision,” the PIC said in a statement.

- Additional reporting by Claudi Mailovich