DA rejects (another) proposed Eskom bailout
29 July 2022
Note to Editors: Please find attached soundbite by Dr Dion George MP.
Reports that National Treasury is working on a plan to absorb a significant share of Eskom’s R400 billion debt are not only concerning but are setting up a very expensive precedent on the management of debt in failing State-owned Enterprises (SOEs).
The DA finds it unacceptable that, after years of ANC sponsored corruption and mismanagement of Eskom, the South African taxpayer is now being asked to reward Eskom for its failures through a debt subsidy.
Current Eskom debt is hovering around R390 billion. Eskom has stated that debt servicing will only be sustainable at R200 billion, signaling that an almost R200 billion bailout is required. The DA has warned that a bailout by the State of this size will pose a severe risk to South Africa’s already fragile sovereign debt profile. Thus far Eskom has been provided with R136 billion to pay off its debt, with a further R88 billion guaranteed until 2025/26.