Acting Eskom CEO Phakamani Hadebe said on Tuesday that the State-owned enterprise had raised R43-billion from the market and that it would come up with a comprehensive, integrated strategy for the entity by September.
“As of today, I’m happy to announce that Eskom has been able to raise in gross terms R43-billion from the market…in net terms we have raised borrowing of R33-billion,” Hadebe told Parliament’s Portfolio Committee on Energy.
“This indicates that the market or fund managers and investors are beginning to welcome Eskom back into the financial market. It also highlights that Eskom can begin to diversify its funding because it is attracting various investors.”
The electricity group has asked the Minister of Energy to approve a one-year corporate plan. A longer-term plan will be ready only later in the year.
“We are expecting that by the end of September we will have a comprehensive, integrated strategy on how to manoeuvre Eskom going forward.”
He said that decisions on the strategy would also depend on “the tariff relationship” with the National Energy Regulator of South Africa (Nersa).
Hadebe was in Parliament to argue for a substantially higher tariff increase from Nersa. The regulator has decided on a 5.23% increase in electricity tariffs for the 2018/19 financial year.
Eskom has said it must be allowed electricity price increases that cover its costs, while also enabling it to migrate towards a fair return.
Hadebe said the Eskom board had been under a lot of pressure from investors to show that it was serious about cutting corruption and putting its house in order. It also had to raise R20-billion to ease cash flow problems.
“The board engaged with market participants to try to raise R20-billion. It became clear to all of us that the investors wanted to see commitment with regard to governance from Eskom and how we are dealing with those who are corrupt. That is why in the space of two weeks, the board exited six senior officials of Eskom who were implicated in corrupt activities.”
He said once this had been done, Eskom was able to generate more funding.
Eskom has to borrow a total of R72-billion in 2018/19.
Meanwhile, Hadebe said he was starting to see some movement from municipalities in paying their debts to Eskom, which would ultimately lead to an improvement in Eskom’s financial situation. Municipalities owe about R12-billion. Neighbouring countries were also paying back their debt.
“We have a small element of exports, and two countries have not been paying. We laid down the conditions, and they paid last week and the week before that. These decisions may be painful, but if we don’t take them, Eskom will continue to have the same problems.”