Budget 2023
Share

Treasury: If Eskom's turnaround plan is 'credible' SA can maintain its credit rating

accreditation

SA's ability to maintain its credit rating depends on the credibility of Eskom's turnaround plan, members of Parliament heard.

The Standing Committee on Finance on Friday was briefed by a team from Treasury about queries raised by the public on the National Budget.

Acting deputy director general for the Budget Office Ian Stuart spoke specifically to the challenges posed by Eskom. Treasury had to revise the expenditure ceiling upwards to make provision for the R69bn financial support to the power utility over the next three years.

Responding to a question about how credit rating agencies would view this move, Stuart said that the outcomes would rely heavily on the reform of Eskom. Stuart explained that ratings agencies would want to see the reform take place credibly, and transparently as this would address the biggest risk to the economy and public finances.

"If the plan is credible then we will be able to maintain the credit rating," Stuart said.

Moody's is the only ratings agency which has SA rated at investment grade.

Stuart also responded to questions about the total value of the financial support Eskom needs.

"There is uncertainty of the support Eskom requires," Stuart said. This mainly hinges on the tariffs Eskom will be able to charge. Treasury has assumed tariffs of 10% in its projections.

Eskom has requested the energy regulator to grant it tariff hikes of 17.1%, 15.4% and 15.5% over the next three years respectively. The energy regulator will on Thursday, March 7, announce the outcomes of Eskom's tariff application.

Last year, Eskom had approached Treasury for a debt takeover of R100bn. But having discussed the matter with the presidential task team, it was determined that Eskom requires balance sheet support of R150bn amortised over 10 years.

Stuart said it is possible to do things differently and different options are being considered.

Eskom has R419bn in debt it has to settle, and the financial support from government will go towards helping Eskom service its debt, Stuart said.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.02
-0.6%
Rand - Pound
24.00
-0.4%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.6%
Platinum
901.20
+0.5%
Palladium
997.97
-0.4%
Gold
2,210.69
+0.7%
Silver
24.71
+0.3%
Brent Crude
86.09
-0.2%
Top 40
68,075
+0.6%
All Share
74,269
+0.5%
Resource 10
56,834
+2.1%
Industrial 25
103,553
+0.3%
Financial 15
16,490
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders