PIC treads warily over bailout suggestions

The Public Investment Corporation (PIC) is concerned about not being consulted regarding a proposed R250bn bailout for Eskom, it said yesterday.

The PIC said it was willing to engage about a solution for ensuring that Eskom did not pose a systemic risk to SA’s economy, but was 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 this month.

Cosatu has suggested that about 7% of the R2.2-trillion managed by the PIC, 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. — BusinessLIVE