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Eskom’s quandary – load shedding or crippling charges?

Electricity Towers

Source: Ruan Jooste, Business Maverick, 1 November 2020, photo credit: ESI Africa

It’s difficult to see how Eskom will continue as a going concern without enormous tariff increases despite the government’s huge capital-injection optimism being sold to us by Minister Pravin Gordhan and Eskom CEO André de Ruyter. Eskom posted a staggering R20.5-billion loss for the year to March, driven by finance charges of R31.2-billion. 

Eskom CEO André de Ruyter. Eskom posted a staggering R20.5-billion loss for the year to March, driven by finance charges of R31.2-billion.  

Eskom’s results announcement comes on the heels of another in July, when Finance Minister Tito Mboweni announced that government will increase financial assistance to Eskom for the current financial year from R23-billion to R49-billion and from R23-billion to R59-billion for the 2020/21 financial years. 

During the period under review, Eskom posted a respectable (approximately) 18% improvement in earnings before extraneous items, which is commendable given the current economic conditions coupled with the improvement in its cash liquidity position largely driven by debt funding.
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