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Bloomberg News reports that indebted power utility Eskom may need to borrow an extra R45bn to purchase diesel and pay inflation-beating salaries to workers, according to S&P Global Ratings.
That would be a 50% increase from S&P’s borrowing forecast for Eskom in November, said Omega Collocott, director of corporate ratings for SA at the company. The utility had a funding plan of R24.4bn for the year to March, according to a company presentation in November. SA has had to endure hours of outages in the past few weeks as labour strife and breakdowns at coal-fired plants forced Eskom to resort to rolling blackouts. The elevated use of diesel-fed turbines, the wage deal and a tariff increase that didn’t meet the company’s requirement left the utility with a bigger-than-anticipated hole in its finances. The utility has about R396bn in debt. Fitch Ratings last week said that the poor finances of many public enterprises posed considerable risks to public finances. Without giving a time frame, Fitch said indicated that Eskom was expected to require additional financial support of about R150bn, “which is not factored into our debt forecast due to the uncertain timing and form of support”.
- Read the full original of the report in the above regard by Colleen Goko & Prinesha Naidoo at BusinessLive
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