Treasury: Eskom Is Now a Going Concern After R254 Billion Bailout

The National Treasury has expressed growing confidence in Eskom’s financial turnaround, saying the state-owned power utility is no longer at risk of collapse. Following the approval of a R254 billion bailout package in 2023, Treasury officials believe the entity has made measurable progress in restoring its financial health.

Addressing Parliament’s Standing Committee on Appropriations this week, Treasury director Jeffrey Quvane confirmed that Eskom has ended the 2023/24 financial year in a “comfortable cash position.” This comes after the government released R140 billion in loans to help Eskom service its mounting debt and meet interest payments.

“Eskom is now a going concern,” Quvane told the committee. “It has closed the financial year ending the 31st of March on a strong footing, and we expect it to post a profit once its books are audited.”

The Treasury’s update also highlighted a R24 billion reduction in planned payouts, thanks to changes introduced in an amendment bill tabled with the national budget in March. These amendments are part of broader efforts to ensure greater fiscal discipline and accountability in the disbursement of bailout funds.

However, the committee was told that Eskom has fallen slightly short in reducing the loan book of its financing subsidiary, which led to a R4 billion shortfall in the anticipated payout schedule. Despite this, Treasury maintains that the utility has broadly complied with the conditions of the loan agreement.

According to the updated debt relief plan, the remaining R70 billion payout initially scheduled for this financial year has now been revised. Eskom will receive R40 billion in two installments during 2025, while the remaining R10 billion has been deferred to 2028.

The bailout has been a controversial but necessary intervention for a utility that plays a critical role in South Africa’s economy. Load shedding and debt spirals had previously threatened Eskom’s viability, but with renewed oversight and financial discipline, the government now says the utility is back on the path to sustainability.

For businesses, investors, and households alike, this shift could mark the beginning of a more reliable and predictable energy future.

{Source: EWN}

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