By Promit Mukherjee
JOHANNESBURG (Reuters) – South African utility Eskom will get up to 20 billion rand ($1.06 billion) from the National Treasury next week, its interim CEO Calib Cassim said on Wednesday, in the second tranche of a debt relief package from the government.
The government’s handout was first announced by the National Treasury in February to help the debt-laden monopoly power generator and supplier to pay off its debts in a timely manner and avoid defaults.
The Treasury offered a total of 254 billion rand so Eskom can repay part of the 423 billion rand of total debt that it owes to global financial institutions.
“We have got a big maturity with the syndicated banks coming up now in October, so we will get this money from the Treasury next week,” Cassim told Reuters in an interview on the sidelines of a climate conference organised by lender Standard Bank.
The company is likely to get a billion dollars, Cassim, who is also the chief financial officer of Eskom, said.
Another smaller tranche might be disbursed to the company in December, he added.
The company received its first tranche of 16 billion rand in August.
The company’s total debt is almost equal to the total national budget for education and more than the spending on health or social development.
Eskom has been implementing record power blackouts in South Africa since last year – sometimes up to 10 hours a day – as its ageing coal-fired power plants are unable to cope with high demand.
Of late, the power situation has improved and daily power cuts have come down to two hours a day.
Cassim said he was hopeful the summer months of September to April this year would be better than last and there could be a possibility of no power cuts from early next year.
($1 = 18.9449 rand)
(Reporting by Promit Mukherjee; Editing by Sharon Singleton)