ESKOM’S MUNICIPAL DEBT HAS REACHED UNSUSTAINABLE LEVELS

CAPE TOWN- Eskom has admitted their municipal debt has reached levels that will threaten the utility’s sustainability.

Municipalities across the country owe Eskom about R30 Billion, with nearly half of that R14 Billion owed by Soweto.

The state utility has tried to collected the billions owed to it by including scheduled power cuts in some municipalities, which have done little, as a top level Eskom delegation told Parliament’s Standing Committee on Public Accounts (Scopa) on Tuesday night.

Acting CEO Phakamani Hadebe has said it is a problem too big for the state utility to deal on its own.

He said, “This is beyond Eskom. The different organs of the state and government have to deal with this.”

He warned that Eskom will likely face further downgrades but the larger risk will be investors who have underwritten the utility’s R367 billion debt and will refuse in all likelihood refuse to extend this.

Eskom is seeking to borrow an additional R72 billion by June.

Hadebe said, “The situation, honourable members is dire and we can’t hide that. And in fact it has reached an unsustainable level.”

He concluded that Eskom’s municipal debt has reached such high levels from R5.5 billion in September 2016 to R13,5 billion  by the end of January this year. It is an increase of 140%, it excludes the R14 billion owed by the Soweto municipality.

Photo Credit- Twitter Karyn Maughan

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