Eskom and its 2018 woes: Five major problems the power utility is facing

Eskom wants government to take on R100bn of its more than R400bn debt.
Image: Business Times

From debt, mismanagement and failing plants, the troubled power utility has seen its fair share of blows this year, leading to questions about the sustainability of the state-owned entity.

Here are the five biggest problems facing Eskom.

R419bn debt

The total debt for Eskom climbed by 14% to R419bn in the past six months (until the end of September). According to Business Day, the power utility’s service-cost debt doubled to R45bn in a year.

Despite only generating R26bn from operations, Eskom’s profit also dropped from R6.3bn to R671m in 2017. The power utility’s primary energy costs increased by 12% to R46bn and employee-benefit expense grew by 12% to R16.9bn.

According to its CFO, Calib Cassim, Eskom is likely to surpass the R11.2bn loss that was projected for 2018. This was all reflected in the utility’s performance results in late November.

Government bail-out

Eskom wants the state to take on R100bn of its debt.

According to Business Day, the overall debt is expected to rise to R600bn in the next three years if not attended to. Eskom can’t afford to pay interest costs from revenue earned. These costs are projected to rise to R250bn in three years.

Read more of the story on TimesLIVE

By: Odwa Mjo

Source: TMG Digital

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