State to shed load of Eskom bailout on taxpayers?

2014-09-15 15:36

The Democratic Alliance is demanding answers from government on what its bailout plan for Eskom will entail. Responding to yesterday’s announcement by Cabinet that it had approved a funding package to help Eskom with its R225 billion shortfall, DA MP Natasha Michael said she would write to Public Enterprises Minister Lynne Brown and Finance Minister Nhlanhla Nene to request documents relating to the bailout.

“Reports suggest that businesses and consumers are to carry a large portion of the load through increased electricity tariffs,” said Michael.

“We need absolute clarity on these tariff increases, the process followed in making this decision and the proportion of the debt to be absorbed directly by taxpayers through increased tariffs.”

The government said it would support Eskom’s application to the National Energy Regulator of South Africa for tariff adjustments in line with the regulatory process.

In addition, Eskom would receive funding, from leveraging nonstrategic state assets, to relieve the effect on consumers and to strengthen the utility’s balance sheet.

Nene would provide details in his budget announcements.

Eskom would raise additional debt in the region of R50 billion, over and above its original plan of R200 billion during the third multiyear determination period.

The debt raising would be supported by the “substantial guarantee facility” from the government.

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