Parliament passes R254bn Eskom Debt Relief Bill

Cape Town — The Standing Committee on Appropriations has welcomed briefings from the Department of Public Enterprises and from Eskom on the Eskom Debt Relief arrangement which guarantees that government will provide Eskom with recapitalisation amounting to R254 billion.

Despite reported pushback from the DA who rejected the bill and the EFF who did not partake in the voting, the government will provide Eskom with R78 billion for the financial year 2023/24, R66 billion for the 2024/25 financial year, and R40 billion for 2025/26 to address its debt obligations, a statement said.

However, the relief comes with conditions. The utility is required to prove compliance with conditions to National Treasury on a quarterly basis.

“Conditions accompanying the debt relief are that funds must only be used to settle debt and interest payments under pre-identified instruments.

ALSO READ | Use electricity sparingly, Cabinet tells South Africans

“Other conditions are that Eskom may not use proceeds from the sale of non-core assets for capital and operating needs or implement remuneration adjustments that can adversely affect its overall financial sustainability,” read the statement.

The committee raised concerns about whether the power utility will be able to meet the conditions of the debt relief interventions after failing to meet the previous government bail-outs in the past five years. In response, Eskom said under the condition of the new debt relief, Eskom will be allowed to convert National Treasury loans to equity.

The committee expressed concern about the utility’s ability to meet the conditions of the debt relief interventions after failing to meet the previous government bail-outs in the past five years.

Eskom, however, said under the condition of the new debt relief, it will be allowed to convert National Treasury loans to equity.

The committee recommended that there must be clear measurable targets emanating from Eskom on how it will meet the conditions such as reduced load-shedding stages.