Ramaphosa plans to SPEND on energy crisis despite Eskom’s debt

President Cyril Ramaphosa has listed government’s plans to turn around the ongoing power crisis in the country. And this includes more spending on the power utility, despite it’s huge R400 billion debt.

In his national address on Monday morning, he said one of his priorities is to fix Eskom while providing the country with the required power. This includes a list of purchasing and procuring of equipment and energy to add more power onto the national grid.

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RAMAPHOSA CONCEDES LOADSHEDDING IMPACT

The recent ongoing high stages of loadshedding have had a serious knock on the country’s economy.

The past three weeks of different stages, including the crippling Stage 6, have also severely interrupted the lives of citizens, said Ramaphosa.

“The daily power cuts we have been experiencing have inconvenienced millions of households and have presented huge challenges for businesses. After more than a decade without a reliable electricity supply, South Africans are justifiably frustrated and angry. They are fed up,” he said.

President Cyril Ramaphosa

MONEY TO GO TO ESKOM DESPITE MULTI-BILLION RAND DEBT

The next three months will see additional actions by Eskom to add new generation capacity on an urgent basis. This means an allocation of a large chunk of money to ensure a stable power supply.

But Eskom continues to be in serious debt, which currently stands at close to R400 billion, Ramaphosa said.

“The debt continues to be a huge burden on Eskom’s ability to address its many challenges.”

However, the National Treasury is working to find a sustainable solution to deal with the debt.

“The Minister of Finance will outline how government will deal with this matter in an effective manner, when he presents the Medium-Term Budget Policy Statement in October.”

President Cyril Ramaphosa

The South African Police Service has set up a special law enforcement team to assist Eskom in confronting crime and corruption, which has contributed to the power utility’s poor financial state.

“A number of people have been arrested in recent days and several others are already being prosecuted for corruption and fraud involving Eskom contracts,” said the President.

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WHERE WILL SOME OF THE MONEY GO?

Despite this large debt, an immediate measure to solving the energy crisis is to buy surplus capacity from existing independent power producers.

The funds will come through the Just Energy Transition Partnership which will invest in the grid. The funder will also repurpose power stations that have reached their life span.

The power utility will also be constructing its first solar and battery storage projects. This will be at Komati, Majuba, Lethabo and several other power stations. The projects will yield over 500 megawatts onto the power grid.

“With improvements in the regulatory environment and mobilisation of society, Eskom will be in a position to carry out its maintenance and investment programmes. There can be no longer any excuses. These steps will allow us to limit load shedding to lower stages and reduce the risk of such severe load shedding in future. To end load shedding, however, we need to urgently add much, much more capacity to the grid,” Ramaphosa said.