The Public Investment Corporation (PIC) raised their concerns following media reports suggesting it would provide funding to rescue Eskom on behalf of its clients.
On Thursday, PIC head of corporate affairs Dean Botha said in a statement that “neither the PIC, as the asset manager, nor the clients have been consulted regarding the proposed Eskom funding solution”.
The PIC manages in excess of R2 trillion on behalf of clients that include the Government Employees Pension Fund (GEPF), Unemployment Insurance Fund (UIF), Compensation Commissioners’ Fund (CC) and several others.
“PIC’s investment function is governed by specific terms included in each client’s investment mandate and designed to further each client’s investment goals. In discharging our fiduciary duty to our clients, the PIC must and assesses any investment proposal in line with client mandates,” Botha said.
Botha said the decisions the PIC makes was based on the merits of each investment proposal which aims to generate risk-adjusted financial and social returns for its clients.
“Should the PIC receive a proposal to further invest in Eskom, the PIC will follow its governance process as outlined in the investment mandates to arrive at a decision,” he said.
He said that the PIC was aware of the impact on the country’s economy if Eskom were to collapse.
“The PIC, being a prudent asset manager, is well aware of the risk that Eskom poses to the South African economy and to the funds invested on behalf of its clients.
We believe a long-lasting solution should address, amongst others, Eskom’s growing debt burden; impact of Eskom power generation business on the environment; governance reforms; operational effectiveness; improving procurement practices; and ensuring a reliable supply of power to the economy,” he continued.
Botha said that the PIC was ready to engage with Eskom in finding solutions for the power utility’s problems.
“The PIC is ready and keen to engage with various stakeholders to find a suitable and sustainable solution for the systemic risk posed by Eskom,” he said.
Botha further said that Eskom’s solutions must be in line with prudent management of client asset.
“The PIC is obligated to always act in the best interests of its clients, whilst giving due regard to the national interest,” he concluded.