Debt squeezes Eskom finances

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Eskom’s financial sustainability is under pressure, which has forced the power utility to approach the National Energy Regulatory of SA to increase tariffs and approach the government for more funding. Its debt stands at R255 billion. Last month’s rating downgrade by Standard & Poor’s also has negative implications for the state-owned enterprise. Tsholofelo Molefe, the finance director, said on Friday that Eskom’s credit rating remained at “the lowest end of the investment grade” and was at “risk of a further downgrade in the next 90 days if the stand-alone financial profile weakens materially”. Despite the high debt, Eskom posted a net profit of R7.1bn for the year to March. Molefe said the “surplus will be reinvested to support Eskom’s capacity expansion programme and to service its debt”. Public Enterprises Minister Lynne Brown expressed concern at the delay on Medupi, saying the project must be completed by the end of the year. – Ayanda Mdluli

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