HomeIndustry SectorsFinance and PolicyAnother R20 billion for Eskom

Another R20 billion for Eskom

Majuba power station
“’ part of the network
into which another R20
billion is being injected
by the government
Cape Town, South Africa — ESI-AFRICA.COM — 12 November 2010 – The government of South Africa is to provide another R20 billion in funding for state power utility Eskom.

Revealing this here, the cabinet said the government equity injection package would be used to solidify the parastatal’s balance sheet as it sought to obtain external loan funding for its much needed capital expansion programme.

It added that the government would also be extending its loan guarantee to Eskom as its generating capacity plans get underway. The loan guarantee had been doubled from R175 to R350 billion.

Cabinet spokesman Themba Maseko said: “We believe that we’re strengthening Eskom’s ability to go to the markets to raise additional capital so that it can continue with its build programme”.

He withdrew an earlier statement that the lifeline would be funded by selling off non-core state assets, saying this has not been approved by the ministerial cluster. The money would therefore have to be found as part of the regular budget process.

Maseko added that it was not excluded that in future state assets might be sold to fund the utility.