Eskom chairman Jabu Mabuza during the power utility’s annual financial results presentation on November 28, 2018 in Johannesburg, South Africa. During the presentation, it was revealed that Eskom’s debt service costs have doubled in a one year to R45bn.
Jabu Mabuza addressed the Portfolio Committee on Public Enterprises on Wednesday and announced Eskom is owed R20 billion by municipalities.
The chief executive officer announced that the power utility is in a critical condition as government’s financial support only addresses short-term liquidity, and Mabuza revealed that these issues will be detailed in the progress report, National Treasury and the Minister of Finance are currently working on.
Mabuza noted that there is a need in establishing an energy plan for the power utility, as the country’s condition is critical in an ever-changing energy landscape; he stated that the annual report will be made public and it will prove Eskom’s financial performance is in a dire state.
In June, Eskom announced a loss of R21 billion which Mabuza stated it is almost ten times more than the R2.3 billion revenue loss, that the power utility experienced in the previous financial year.
The National Assembly approved the Special Appropriations Bill in July, that ushered in the allocation of R59 billion to the embattled power utility; which consisted of an additional R26 billion in 2019/20 financial year and R33 billion in the 2020/21 financial year.
Mabuza also stated that the total municipal debt had increased to R20 billion, and the generation energy availability factor stood at 70% which indicates that these factors have required Eskom to spend R6.5 billion on diesel-generated power, to minimize the intensity of load shedding.
“Our turnaround strategy to stabilize, separate and to grow the company for financial and operational sustainability remains urgent. Those elements of the strategy that we can implement, we continue to. But in the end, it is very critical to create a country energy plan as the next few years pose tougher challenges for Eskom and the energy industry in an ever-changing landscape.”
Jabu Mabuza: “We are pleased to say we have not had to load shed since the 24th of March”
Mabuza declared that looking on the brighter side, there was progress to promote governance and dig out financial mismanagement and misdemeanour.
“On the operational side, we have implemented our generation nine-point recovery programme which has started to see some positive results in plant performance throughout the winter period. We are pleased to say we have not had to load shed since the 24th of March 2019.”