Olga Constantatos, head of credit at Futuregrowth Asset Management. Picture: SUPPLIED
While the plan has been endorsed by President Cyril Ramaphosa, Futuregrowth says SA will probably be better served pouring that money into renewable energy sources, particularly since the country committed to cut carbon emissions by 20%-33% by 2030 in exchange for an $8.5bn funding package with rich nations at COP26.
“It’s a good intervention but it’s not the only intervention that’s needed,” said Constantatos. “They also need to lower their cost base and to generate cash flows.” On the face of it that may help boost Eskom’s financial position, but Constantatos said the higher tariffs may actually be contributing to Eskom’s long-term demise. In fact, she said the utility is now neither financially, operationally nor environmentally sustainable.
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