South Africa
Eskom on the verge of collape

Finance Minister Malusi Gigaba warned on Thursday (18/01/2018) that if Eskom is not dealt with urgently, South Africa’s whole economy could collapse, reports Fin24.

Gigaba said that the fiscus simply does not have the funds to bail out Eskom. He hinted that a major shake-up is on the cards for the power utility in the next few days.

The finance minister also said there are problems at Eskom’s board and senior management, who simply don’t seem to grasp the seriousness of the situation.

Eskom is yet to publish its interim results, and could face severe penalties if it these are not made public before the end of the month, including lenders calling in loans.

The JSE has already threatened to suspend the utility’s bonds because it had failed to publish its six-month interim results by the December 2017 deadline.

Eskom’s debt due to its new build programme is hefty. Treasury has issued R350bn of government guarantees to Eskom, of which R275bn has already been used.

It needs to borrow about R60bn per year for the next four years to finish the new build programme, consisting out of Medupi and Kusile.

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