Eskom finances a 'matter of grave concern' - Cyril Ramaphosa

Eskom’s financial position remained “a matter of grave concern” President Cyril Ramaphosa said at the State of the Nation Address on Thursday night.

Ramaphosa said the state of Eskom, load-shedding earlier this year and the uncertainty about the supply of electricity was one of the reasons for the lacklustre economic performance.

“Eskom is facing serious financial, operational and structural problems,” Ramaphosa said.

“Since the load-shedding earlier this year, Eskom has made much progress in implementing its nine-point plan, ensuring better maintenance of its generation fleet, reducing costs and ensuring adequate reserves of coal.

“In line with the recommendations of both the Eskom Sustainability Task Team and the Technical Review Team, Eskom is deploying its most skilled and experienced personnel to where they are needed most.

“With the current committed funding from government, outlined in the 2019 Budget, Eskom has sufficient cash to meet its obligations until the end of October 2019.

“For Eskom to default on its loans will cause a cross-default on its remaining debt and would have a huge impact on the already constrained fiscus.

“We will therefore table a Special Appropriation Bill on an urgent basis to allocate a significant portion of the R230 billion fiscal support that Eskom will require over the next 10 years in the early years.

“This we must do because Eskom is too vital to our economy to be allowed to fail. Further details will be provided by the Minister of Finance in due course.”

Ramaphosa said a new CEO would be announced following the resignation of Phakamani Hadebe in May.

A Chief Restructuring Officer, who will be expected to reposition Eskom financially with careful attention to the mix between revenue, debt and cost structure of the company, will also be appointed.

Ramaphosa said Eskom was working with government and other stakeholders to address its overall debt as well the debt owed by municipalities and individual users.

“As a country, we must assert the principle that those who use electricity must pay for it. Failure to pay endangers our entire electricity supply, our economy and our efforts to create jobs,” he said.

“The days of boycotting payment are over. This is now the time to build it is the time for all of us to make our own contribution.”