R230bn for Eskom over the next 10 years, Mboweni says in MTBPS
JOHANNESBURG - Finance Minister Tito Mboweni said that government will be supporting the struggling state owned energy supplier, Eskom, with R230bn over the next 10 years.
Mboweni delivered his Medium Term Budget Policy Statement to South Africa in Parliament on Wednesday.
Mboweni said: "Government has announced a comprehensive set of structural reforms for Eskom and the energy sector, which we are supporting with R230 billion over the next 10 years. Very difficult budget adjustments have been made."
The finance minister said that to meet unanticipated cash needs, they have brought forward R26 billion in 2019/20, R33 billion in 2020/21 and R10 billion in 2021/20.
"Further delays in operational reforms could mean additional support is required. We cannot continue to throw money at Eskom. For the sizeable support required, it cannot be business as usual," Mboweni said.
Mboweni said that Eskom must do the following:
1. Run their current plant and equipment better
2. Achieve other operational efficiencies, including much better cash management
3. Fast track the separation of the utility into three parts as endorsed by the political principals.
"There should be no doubt about the policy decisions in this regard The Minister of Public Enterprises has further elaborated on this in the paper released yesterday. Going forward, new cash flow support will no longer be equity but will be in the form of loans."
Mboweni said that once he is convinced that the Eskom Board and Management has made an irrevocable commitment to implement government’s decisions and there is enough progress, they will negotiate the appropriate size of debt relief.
"Eskom is a business and should be run that way."