Cape Town - South Africa will inject R20billion cash into Eskom, and may also convert its existing R60billion subordinated loan to equity, the National Treasury said on Wednesday.
The moves highlight the gravity of the situation facing Eskom, which provides virtually all of the power to Africa's most advanced economy but has massive funding issues as its costs are running way ahead of its revenues.
Finance Minister Nhlanhla Nene, who tabled the Treasury's three-year economic outlook in parliament, also said that no new financial guarantees will be given to Eskom as South Africa moves to stabilise its debt load.
“Government will closely monitor Eskom's financial position and, if necessary, could consider providing additional support to the utility by converting its existing subordinated loan to equity,” Treasury said.
The R20billion injection will be raised through the sale of non-strategic state assets, such as property, direct and indirect shareholding in listed firms and surplus cash balances in public entities, the Treasury said.