Eskom May Need R45bn in Financial Support for Diesel and Wages Hike, Says Global Rating Company

• S&P Global Ratings believes that Eskom could have to borrow R45 billion to pay its workers and buy diesel
• Director of corporate ratings for SA at S&P Global Ratings, Omega Collocott, said a 50% increase is on Escom's borrowing forecast
• Fitch Ratings is another source that expects Eskom to require additional financial support of around R150 billion

JOHANNESBURG - South Africa’s power utility could end up borrowing another R45 billion, according to experts, S&P Global Ratings. Eskom will need to use the funds to pay its workers and purchase additional diesel.

Director of corporate ratings for South Africa at S&P Global Ratings, Omega Collocott, predicts a 50% increase in Eskom’s borrowing plan. According to Fin24, government originally pledged R22 billion to facilitate net cash flow. This means that the total amount of money will be earned by Eskom through additional financial support from either the government or other ways of acquiring a loan.

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Collocott said the proposed flow of funds is based on the assumption that the government's planned financial assistance will not change. This follows the recent protest action that plunged the country into darkness.

According to Engineering News, Fitch Ratings said public enterprises’ poor finances posed considerable risks to public finances. The rating company expects Eskom to require the additional financial support of around R150 billion. However, it adds that the financial support is not factored into the debt forecast due to the uncertain timing and form of support.

South Africans outraged over the situation at Eskom

@pops_sa said:

“Citizens and private businesses are paying their Eskom bills, but dozens of municipalities and government owned companies are not paying! So basically, government is digging a very large financial grave for the citizens of SA, as they have to pay back the loan using our money.”

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@EvolSiLla commented:

“I honestly wish we could find solutions to this energy crisis. How hard can it be?”

@MazdaTrix posted:

“Keep borrowing cause privatisation isn’t going to happen.”

@Mbatho7 added:

“Not borrow but extort from taxpayers disguised as tariff increase.”

President Cyril Ramaphosa makes more promises to end loadshedding, citizens say they are tired

In a related matter, Briefly News also reported President Cyril Ramaphosa has once again made promises to end the country’s continuous battle with loadshedding. In his weekly newsletter, he said the government and utility’s management need to act boldly to make loadshedding a thing of the past.

The president said that while rolling blackouts appear to worsen, the reality is that the government has taken several important actions to address the shortfall in electricity supply.

Source: Briefly News