Eskom Needs South Africans to Cough up r1 Billion a Week to Survive 2021

Eskom Needs South Africans to Cough up r1 Billion a Week to Survive 2021

- Eskom will need a cash injection of R1 billion a week to service through 2021

- This works out to R6 million an hour, which it needs to service its debts and be financially stable

- To make matters worse, Eskom is expecting a 7% drop in sales in 2021

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Eskom will need R1 billion a week to survive through 2021 based on financial projections. The power utility has a debt burden of R480 billion which it simply cannot afford unless it has a minimum income to cover its financial obligations and operate.

On Wednesday morning Parliament’s Standing Committee on Public Accounts (SCOPA) was presented with Eskom's 2020 financial results.

Lockdown had helped ease the burden of power generation a bit but 2021 is expected to be a difficult year financially for Eskom according to Business Insider.

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Eskom needs South Africans to cough up R1 billion a week to survive 2021
Eskom will need significant government bailouts to survive through 2021. Photo credit: @EskomSouthAfrica
Source: Facebook

Eskom was able to improve its debt collection from defaulting municipalities, brought the limping Kusile Unit 2 online and was able stabilise its coal stock. This was accomplished due to R48 billion in government bailouts.

This came at a cost to maintenance which resulted in 46 days if load shedding as the power utility grappled with unscheduled maintenance.

R7.5 billion was spent on diesel generators to maintain the grid, this is expected to be reduced by as much as 30% in 2021 as long as Eskom is able to keep up with critical maintenance.

Eskom will need an estimated R6 million an hour to operate which will prove to be difficult as the power utility expects a 7% drop in sales in 2021.

There is light at the end of the tunnel, if successful, Eskom will be profitable from 2023 bu in order to get there it will have to halve its debt and be in the green with a cash balance of R30 billion.

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Until then the power utility will require significant government bailouts at the expense of the taxpayer to the tune of R1 billion a week.

Earlier, Briefly.co.za reported that Deputy Chief Justice Raymond Zondo said he would not ignore the allegations levelled against President Cyril Ramaphosa by former Eskom CEO Brian Molefe.

Reports say that evidence leader advocate Pule Seleka omitted the accusations against Ramaphosa during his recap of Molefe's testimony in January when he appeared before the Zondo commission for the first time.

The former Eskom CEO made claims that Glencore had been trying to extort R8 billion from the power utility and made Ramaphosa a shareholder at Optimum Mine (the company that supplies Eskom's coal).

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Source: Briefly.co.za

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