Eskom to borrow R55bn to boost power output | Fin24
 
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Eskom to borrow R55bn to boost power output

Jun 12 2015 12:41

Cape Town - Power utility Eskom said on Friday it aims to borrow a further R55bn and turn its government debt into equity as it looks to boost generating capacity amid chronic power cuts.

The country is enduring its worst electricity blackouts since 2008, as cash-strapped Eskom cuts power daily to households and companies in a bid to cope with demand and prevent the national grid from collapsing.

The conversion of the state's subordinated loan to equity is part of a government financial package for Eskom, and includes a R23bn injection that will help the utility plug an estimated funding gap to 2018 of R200bn.

"We are quite confident that we will be able to raise the R55bn during this financial year," acting chief executive Brian Molefe told parliament.

It was not clear how Eskom would raise the funds.

Eskom and government also said a R60bn loan from the state would be converted into equity to improve the utility's liquidity and expand its borrowing capacity.

Standard & Poor's in March cut its credit ratings for the cash-strapped Eskom to junk following the suspension of the utility's former CEO and three other senior executives while an investigation on the firm's operations was being conducted.

READ: S&P downgrades Eskom to junk

Molefe also said South Africa has enough electricity supplies and is not suffering from systemic constraints.

"It is not because we do not have enough electricity as a country, we do, but not all of it is available at all times and that is a temporary problem and not a systemic problem," he said.

He said the installed electricity capacity stands at around 43 500 megawatts, and the country has enough power but ageing infrastructure and a huge maintenance backlog hinder output.

eskom  |  energy crisis  |  power supply  |  economy
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