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Eskom seeks advice on how to spend financial aid

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Eskom seeks advice on how to spend financial aid

Photo by Bloomberg

12th July 2019

By: News24Wire

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Eskom has put out a request for information (RFI) for financial services groups to assist it with "advising on the efficient and effective implementation of the government financial support package".

A RFI is generally the first phase of a tender process. It is followed by a request for proposal and a request for quotation. 

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Eskom has a debt-burden of roughly R440-billion and doesn't make a profit from selling electricity at current prices. 

The State power utility was in February allocated a R69-billion support package over three years by Treasury. Over ten years the support will amount to R230-billion.

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In his State of the Nation address in June, meanwhile, President Cyril Ramaphosa announced that due to the utility's strained financial position, government would soon allocate it a "significant portion" of the R230-billion.  

Finance Minister Tito Mboweni in his budget vote on Thursday said he plans to introduce a special spending bill in Parliament later in July to help Eskom. 

In its RFI Eskom states: "When the preferred execution option on government support package has been announced, Eskom and the government will have to expedite the implementation of the strategy." 

Eskom says the finance institution will need to advise it on restructuring plans, provide guidance in talks with ratings agencies, and assist in plans for a "possible debt transfer to the government".

Only companies that are free from existing or potential conflicts of interest and whose main business includes sovereign ratings advisory and debt management services will proceed to the second round. 

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