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Eskom is making progress in its efforts to improve its financial and operational performance.
According to reports, the company plans to separate its transmission company by the end of November as part of a major overhaul. This move is aimed at enhancing the company’s efficiency and sustainability.
During a meeting at Eskom’s headquarters, Eskom acting group CEO Calib Cassim shared the remaining requirements for the transmission company’s separation.
Firstly, he said, they need to obtain the transmission license from the National Energy Regulator of SA (Nersa), expected by the end of July.
Secondly, they require the consent of lenders, which they hope to achieve by the end of August. Creditors will have the opportunity to ask questions once these steps are completed.
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Around R40 billion of Eskom’s total debt, which is approximately R400 billion, will be allocated to the transmission company responsible for operating the national grid.
This allocation, Cassim explained, aims to establish a more sustainable capital structure, taking into account the debt relief.
Cassim emphasised the need for the transmission business to generate sufficient revenue to service the debt and generate profits.
The distribution company, responsible for supplying electricity to customers, will assume about R30 billion of debt.
The generation company, which operates the power plants, will take on the majority of the remaining debt.
Eskom’s debt will be divided based on its source and historical capital expenditure.
Regarding Treasury’s R254 billion debt relief plan for Eskom, R184 billion will be advanced to the utility over the next three years for debt and interest payments. The remaining R70 billion of debt will be taken over by Treasury.
This plan aims to alleviate some of Eskom’s financial burden.
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Cassim also discussed the recent 7% annual wage increase for Eskom employees over the next three years.
He assured that the increase will be funded through operations, leveraging savings resulting from a lower permanent staff complement than originally budgeted for.
This settlement aims to provide stability to Eskom’s workforce, allowing the company to focus on addressing the electricity crisis.
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