PRETORIA (Reuters) – South Africa said on Wednesday that it would reduce its debt relief package for state power utility Eskom by a further 20 billion rand ($1.1 billion) and would give some of its support in loans rather than taking on the company’s debt.
“Eskom is now in a much better financial position than in 2023 when the debt relief was originally announced. As a result of these improvements, we have decided to simplify the final phase of the debt relief package,” the National Treasury said in a revised annual budget.
Instead of taking on 70 billion rand of debt, the National Treasury will give Eskom 50 billion rand in loans.
The government previously reduced its support package by 4 billion rand after the utility failed to meet a deadline to dispose of its Eskom Finance Company.
Eskom said in December that it expected to turn profitable in 2025, its first profit in eight years.
“In summary, over the five-year period, government will have provided Eskom with loans to the value of 230 billion rand to assist the utility in repaying its debt. This is about 24 billion rand less than projected at the outset,” the Treasury said on Wednesday.
South Africa has struggled for years to overhaul Eskom, which is reliant on bailouts and has implemented rolling power cuts for more than decade that have curbed economic growth.
($1 = 18.3816 rand)
(Reporting by Tannur Anders and Sfundo Parakozov. Writing by Olivia Kumwenda-Mtambo. Editing by Alexander Winning and Mark Potter)
