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South Africa Allocates Eskom Extra $4.2bn Over Two Years

By Bloomberg 22 July 2019
Caption
Steam rises at sunrise from the Lethabo Power Station, a coal-fired power station owned by state power utility ESKOM near Sasolburg, South Africa, March 2, 2016. Picture taken March 2, 2016. REUTERS/Siphiwe Sibeko/File Photo

(Bloomberg) --South Africa will give ailing state-owned power utility Eskom Holdings SOC Ltd. an additional 59 billion rand ($4.2 billion) spread over two years, according to a copy of a special appropriations bill seen by Bloomberg.

Eskom will get 26 billion rand of the money this financial year and 33 billion in 2020-21.

Key Insights
President Cyril Ramaphosa announced plans for additional funding for the struggling company last month, without providing details. Finance Minister Tito Mboweni was due to announce the proposal tomorrow.

The funds will come from the Revenue Fund, according to the bill. The government had already approved a 69 billion-rand, three-year bailout for the debt-laden company in February.
Eskom has debt of 440 billion rand and is regarded as the biggest risk to South Africa’s economy. The government has been under pressure to finalize plans to fix the business.

A spokesperson for National Treasury wasn’t immediately able to comment.

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