Eskom on the verge of debt trap, CEO warns
Embattled power utility Eskom says without a 15% tariff increase it may be unable to keep the lights on.
Eskom has asked the South African National Energy Regulator (Nersa) for an electricity tariff increase of 15%, each year, for the next three years to keep itself afloat.
Nersa begun public hearings into the tariff hike request in Cape Town on Monday.
It will visit all nine provinces before the end of January.
“The biggest challenge we are facing is the balance sheet of Eskom that has deteriorated over time. We talking about the debt when at the beginning of 2018 was sitting at R380 billion, which has now increased to R419 billion. But this is not the end of the problem, over the next three years that debt would have increased to R650 billion and we are very close to a debt trap, ” warned Eskom CEO Phakamani Hadebe.
He admitted that Eskom is experiencing maintenance challenges that will demand that the utility review some of the decisions it has taken.
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Hadebe said the utility is embarking on various steps to cut costs by R33 billion in 2023.
“We are humbly requesting South Africans to consider that in their own analysis of the way forward. We as Eskom will also undertake initiatives, which in a nutshell, means if all remains constant we would have in five years’ time have saved R133 billion, which will be a challenge. But this will not be sufficient in solve the balance sheet.”
He apologised to all South Africans on behalf of the utility stating that the challenges they face today could have been avoided.
Eskom’s current electricity price stands at R0.89c per kilowatt hour.