/ 23 February 2022

Budget 2022: Finance minister calls on Eskom to sell assets to solve its debt issues

The interest costs on Eskom’s debt amounted to R35.8-billion
Photo: (Dean Hutton/Bloomberg/Getty)

Finance Minister Enoch Godongwana said Eskom’s debt problem may require some “fiscal intervention” but only if certain conditions have been met by the state-owned entity led by André de Ruyter.

Eskom’s R392-billion debt, raised over the past decade, has hampered its ability to maintain some of its ageing coal-fired power stations and fed into 14 years of load-shedding in the country affecting the country’s growth rates.

Speaking at a press conference ahead of his inaugural budget speech, Godongwana said the ministry had “come to the conclusion some fiscal intervention is probably necessary, but let’s see some action from Eskom side. Let’s see them selling assets.”

According to a Bloomberg report, Eskom wants to sell distribution assets in major cities such as Johannesburg to municipalities. It also wants local authorities, which owe the utility about R41-billion, to pay their dues.

Godongwana said the country had spent more time fixing Eskom than fixing the electricity supply problem. “We have been focusing on fixing Eskom for 13 years, it can’t be right. They will have to sell assets.”

Eskom has been provided with R136-billion to pay off its debt with a further R88-billion until 2025-26. Godongwana said that he wouldn’t be changing his “tough love” approach to the country’s troubled state-owned enterprises (SOEs), because there was no provision made in the budget for any SOEs other than Eskom (bar a small quantum for Denel). 

The notion that people will be entitled to support from the state has to come to an end, the finance minister said, adding that companies such as Transnet and Eskom have to meet certain requirements. “People must move out of dependence on the state …There’s no blanket support: everybody will have to come to the queue and demonstrate that you are a good child.”