outages that have hobbled the economy: it needs to build and fund a R390-billion expansion of the national grid so it can connect more power plants.
Funding the expansion appears beyond Eskom’s reach. The company’s coffers were systematically looted during former President Jacob Zuma’s almost nine years in office and it amassed more than R400-billion in debt before national treasury stepped in with a conditional bailout that severely constrains the loss-making utility from taking on additional loans.
South Africa began developing its electricity system more than a century ago, building power stations adjacent to rich coal deposits in the north-east of the country to provide the energy needed to extract gold and other minerals. Transmission lines were later added to connect up other parts of the country.
“At present, Eskom is not financially sustainable on a standalone basis and financial institutions are unlikely to provide additional funding in the absence of a government guarantee or other form of credit enhancements,” said Lindani Vezi, a listed credit investment analyst at Cape Town-based Futuregrowth Asset Management.