South Africas’ power utility company, Eskom has secured US $1.1bn loan from a consortium of local and international banks to finance its current expenditure program.
“We are pleased that lenders have elected to continue partnering with Eskom on our journey to complete the capital expansion programme for the benefit of South Africa’s economy,” said Phakamani Hadebe, Eskom’s Chief Executive, who confirmed the reports.
Phakamani Hadebe pointed out that conclusion of the facility would ensure that Eskom’s liquidity requirements are timeously fulfilled.
Eskom’s drowning debts
The utility company has to date managed to secure 95% of the US $5bn funding requirement for FY 18/19, and the remaining 5% is set to be raised through various funding sources including domestic debt capital markets.
Additionally, Eskom said it has already secured 30% of its funding needs for the 2019/20 financial year and has secured 30% of its funding needs for the 2019/20 financial year.
How ever the Chief Executive of the Utility firm said that Eskom has a US $30 bn debt it has to service. As a result the firm has applied to regulators for tariff increases of 15% over the next three years as part of its plan to help it service the massive debt.
Eskom is vital to the health of Africa’s most industrialized economy as it supplies more than 90% of its power. The government-guaranteed loan comes at a time when President Cyril Ramaphosa is trying to turn around the firm’s finances.