Power cuts are not part of Eskom’s current financial woes, it says

Following reports on Tuesday, Eskom has confirmed that it is currently facing a cash reserve crisis, saying it requires R20 billion to remain operational.

A subsequent letter published by Fin24 between Public Enterprises Minister Lynne Brown and the power utility showed that the company could have as little as R1.2 billion of liquidity reserves by the end of the month.

While Eskom outlined a number of ways that it plans to recuperate the costs  – including bond issuances and Chinese bank loans – a portion of this is likely to be recovered from South Africans, as the the parastatal plans to shut off power to municipalities and thousands of households to recover R11 billion it is owed, reported eNCA

However Eskom told BusinessTech that these power cuts would not be a result of the parastatal’s current liquidity issues.

“The process of disconnection is not as a result of the latest media reports on Eskom’s liquidity,” it said.

“As part of Eskom’s credit management policy, Eskom will disconnect supply to customers who fail to pay their bills in the normal course of business.

“Disconnection is part of our credit management policy which is an instrument we use for disconnecting supply to customers who fail to pay their bills.This is supported by the ERA and also a PFMA requirement that we collect all monies owed to Eskom for providing post-paid electricity.

“This is implemented on non-paying customers,” it said.

Eskom will present its budget review before Parliament on Wednesday morning where it is also expected to address allegations of state capture at the power utility.


Read: South Africa can’t afford nuclear: Gigaba

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