Treasury announces a 2 year timeline for the Eskom unbundling

Treasury announces a 2 year timeline for the Eskom unbundling

- Treasury director-general Dondo Mogajane has briefed investors in London regarding Eskom

- He says the power utility will be unbundled in two years

- Mogajane also said that a task team would develop a plan to deal with Eskom's debt

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The National Treasury has reportedly provided a time-frame by which they will restructure Eskom.

The Treasury is also said to have told Eskom's creditors said they will not suffer losses, despite the massive financial strain the power utility is under.

This comes as Treasury director-general Dondo Mogajane briefed several investors in London regarding the state-owned enterprise.

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Mogajane said that Eskom will be unbundled into three separate entities - each with its own focus and responsibilities - in two years, according to Business Live.

Until then, the power utility will be kept afloat by the government bailout announced by President Ramaphosa in his State of the Nation Address. This will be helped by an appropriation bill that government will table soon and hopes to pass by the end of July.

Additionally, Mogajane says that a team has been hand-picked to handle the restructuring of Eskom. He says the team will be announced next month. 

This team will be tasked with producing a plan to deal with Eskom's debt within the next 18 months, Briefly.co.za has gathered. This will be no small feat, however. Eskom's debt sits at more than R440 billion and, at this stage, the utility is not bringing in nearly money to pay it off any time soon.

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The major bailout needed to keep Eskom functional has spooked some investors, who worry that it will lead to the downgrading of South Africa's credit rating.

Mogajane says he believes this is unlikely, but says that government will accept such a downgrading if necessary.

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Source: Briefly.co.za

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