In the recent 2019 budget speech, the minister of finance, Tito Mboweni wanted to make it clear that: the national government isn’t taking on Eskom’s debt. Eskom took on the debt. Mboweni also detailed the measures that government will undertake to assist Eskom to stabilise its finances.
The budget made provision for R69-billion in additional funds to Eskom over the next three years; Mboweni didn’t aid the utility with a debt swap, in which the state would’ve taken an estimated R100-billion of Eskom’s debt onto its own balance sheet, reported Mail & Guardian Online.
Also during his speech in Parliament to the response session to the debate on his State of the Nation address (Sona) 2019. President, Cyril Ramaphosa announced that Eskom would be divided into three separate state-owned entities – generation, transmission and distribution, all under Eskom Holdings.
While the announcement garnered a lot of attention from all quarters of society, Ramaphosa said it’s by no means the only or most significant measure that must be undertaken.
“There’s a no single solution to the problems at Eskom – neither restructuring, nor refinancing, nor cost cutting, nor tariff increases, nor better plant maintenance on their own will have the necessary effect.
“We need to pursue all of these measures and more, simultaneously, in a coordinated manner, and with purpose, to turn the utility around,” Ramaphosa said.
“It represents a significant commitment at a time when public finances are severely constrained. Ramaphosa says financial stability at Eskom is critical to the economy and undertaking to assist Eskom to stabilise its finances, doing so also means that we are stabilising the economy of our country.”