President Cyril Ramaphosa has given the strongest indication yet that the savings of pension funds will be used to bail out Eskom’s debt obligations.
Briefing the South African National Editors’ Forum (Sanef) in Cape Town, Ramaphosa said South Africans "weren’t that good" at saving money and that pension funds were the main sources of money to save Eskom.
The national power utility has to repay over R450bn in debt.
"You have to go to the source of investments. Where can we get funding? We no longer have space to loan money [for Eskom]," Ramaphosa said in response to a question about discussions at the National Economic Development and Labour Council (Nedlac) on a social compact to bail out Eskom.
Cosatu has proposed that the Government Employees Pension Fund, through the Public Investment Corporation, should take over R250bn of Eskom’s debt obligations.
Many unions have since opposed the pension plan.
Ramaphosa said he understood why people were worried about their pensions being used to "go down a loss-making entity", but that Eskom is being rebuilt and that the investment would be into a "revitalised, revamped, non-corrupt" Eskom.
Ramaphosa referenced the apartheid-era policy of prescribed assets, through which private companies were forced to invest 10% of their funds in government projects, that was launched in 1958.
"That money went into building Eskom as we know it today, Sasol, the Industrial Development Corporation. It was stopped in 1989."
After 1994, private companies continued to make "alternative investments" in developmental projects and BEE, but this never topped 2% of the value of their investments.
"Where is the money in our country? In our pension funds. The Reserve Bank estimates there are over R8 trillion in pension funds. Imagine if 10% of that went into alternative investments - that’s R800 billion for Eskom and water projects."
Ramaphosa said a "revamped" Eskom that was split into three would be worth investing in.
"Pension funds shouldn’t be too fearful, we’ve got an Eskom journey ahead. We also want the private sector to put their money in Eskom, we need to build up confidence."