National Treasury reports R24 billion Eskom losses
The National Treasury has reported that Eskom has lost R24 billion in the past two years due to poor generating performance.
According to the National Treasury, Eskom generated a loss of R24 billion from 2022 to 2023. It says State-Owned Entities (SOE) continue to rely on government support and financial bailouts to pay debt.
Finance Minister Enoch Godongwana did not announce any new bailouts for SOE’s in his 2024 Budget Speech on Wednesday, saying they have failed to implement their turnaround plans, including power utility Eskom.
ESKOM POWER CUTS EXPECTED TO CONTINUE, SAYS NATIONAL TREASURY
The government acknowledged that the “financial sustainability of Eskom is compromised by poor generating performance, declining sales, the utility’s increasing primary energy costs, escalating municipal arrear debt, and high debt-service costs.”
“Eskom’s operational performance has deteriorated significantly over the years. The power system remains unpredictable and unreliable, with power cuts expected to continue until the capacity shortage of 4,000 MW to 6,000 MW is addressed,” Treasury added.
ALSO READ: 2024 Budget Speech: No new bailouts for failing SOE’s – Godongwana
‘LOAD SHEDDING DISRUPTS PRODUCTION AND LIVELYHOODS’
Finance Minister Enoch Godongwana, in his budget speech, said that “load shedding is a problem that confronts all South Africans. It disrupts production, operations, and livelihoods. Reforming the sector will result in long term energy security.”
“The electricity, gas, and water sector contracted by 5.4% in the first nine months of 2023 compared with the same period in 2022, mainly due to Eskom constraints,” Treasury said, according to the Independent Online.
ESKOM FINANCE COMPANY DEADLINE COMING SOON
Treasury says that if Eskom fails to dispose of the Eskom Finance Company by the agreed timeframe of 31 March, the government has proposed reducing the allocations of R78 billion in 2023/24 and R66 billion in 2024/25 by R2 billion each year.
Regarding private sector investment for Eskom, the Treasury said the government has been working in partnership with the International Finance Corporation to agree on short-term options to help secure investments.