President Cyril Ramaphosa has signed the Eskom Debt Relief Act, 2023 into law to help Eskom with its dire finances.<\/p>\n\n\n\n
Although load shedding has improved in recent weeks (primarily due to lower demand), the state utility finances remain in dire straits.<\/p>\n\n\n\n
Over the 2023 financial year, Eskom saw a record loss of R24 billion due to criminality skyrocketing and wealthier clients transitioning to alternative power sources, mainly solar. For 2024, the utility is projecting another R20-billion-plus loss.<\/p>\n\n\n\n
Finance Minister Enoch Godongwana announced a R254 billion bailout for the utility during the 2023 budget. <\/p>\n\n\n\n
This was primarily done to ease pressure on the company’s finances and free it to invest in transmission and distribution infrastructure. <\/p>\n\n\n\n
Moreover, with R330 billion of Eskom’s debt being government-guaranteed, taking over the debt would reduce the nation’s fiscal risk. <\/p>\n\n\n\n
The debt, however, still had stringent conditions to ensure that funds were spent correctly. <\/p>\n\n\n\n
In the November 2023 Medium-Term Budget Policy Statement (MTBPS), Godongwana tabled the Eskom Debt Relief Amendment Bill, improving the enforceability of the conditions as part of the debt relief agreement.<\/p>\n\n\n\n
The amendment\u2014which President Cyril Rampahosa has now assented to\u2014provides for Eskom to pay interest on amounts advanced as part of the debt relief loans. <\/p>\n\n\n\n
It also provides for the reduction of the amount of debt relief available to SOE if it does not comply with the conditions set out by the National Treasury. <\/p>\n\n\n\n