eskomReuters reports that Eskom urgently needs more cash to stabilise its ballooning debt pile with the funds coming from either a rise in tariffs or new equity, new CE Andre de Ruyter told MPs on Tuesday.  

The power utility had a bid for a big electricity tariff increase rejected by a court earlier this month.  Eskom's urgent application to the court for a tariff increase involved hiking rates by 16.6% from April 2020 and a further 16.7% from April 2021.  "The issue of Eskom debt has to be addressed to make Eskom sustainable," de Ruyter told Parliament's Standing Committee on Public Accounts.  The utility has debt of about R450 billion, mostly backed by the government, and is struggling to service the interest on its borrowing due to falling revenues.  Its access to capital markets has also been constrained by years of mismanagement.  "The money is going to have to come from somewhere.  Either it comes from a tariff increase or it comes from an equity injection.  It (the debt) doesn't just disappear.  In fact it creates a very significant risk to the sovereign," said de Ruyter.  In July, the government allocated Eskom R59 billion over two years to service its debt, on top of the 10-year, R230 billion injection it provided months before that.


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