Treasury support for Eskom will come to R230bn over a decade – Mboweni

21st February 2019 By: African News Agency

Treasury support for Eskom will come to R230bn over a decade – Mboweni

Finance Minister Tito Mboweni

National Treasury's cash injections to Eskom to the tune of R23-billion a year to help it cover its debt are likely to continue for a decade, Finance Minister Tito Mboweni told MPs on Thursday.

"It will be for ten years, so R230-billion. I think in the book we put R69-billion," Mboweni said in a briefing to Parliament's finance committees the day after he tabled the 2019 national budget.

In his budget speech, the minister announced that the ailing power utility would get R23-billion a year for the next three years.

National Treasury's acting deputy director general for the budget office, Ian Stuart, said officials had arrived at a decision that Eskom would require R150-billion in support to its balance sheet, and if that figure were amorticised over ten years in resulted in annual payments of R23-billion.

Stuart added that the calculations on support to the struggling power utility had been difficult because of the variables involved, including tariff increases and fluctuations in electricity demand.

He suggested that the picture may change in the outer years but said the treasury decided that it had to provide figures in the budget to satisfy international ratings agencies' preference for maximum transparency.

"There are a lot of people working on this, looking at the numbers.... In a sense a lot of this work still needs to be done, but we had a major decision to make in putting together the budget.... we decided we must be as transparent as possible."