Godongwana says reports Treasury will take over portion of Eskom’s debt are ‘inaccurate’

Minister of Finance Enoch Godongwana on Thursday said reports that the National Treasury plans to take over a portion of Eskom’s R392-billion debt were inaccurate.

The reports also claimed this would happen on a condition that the power utility builds new coal, gas and nuclear plants.

Untrue and misunderstanding

“This is untrue and a misunderstanding of the argument the Minister was making. Minister Godongwana’s point was that South Africa’s energy transition will not be an immediate and wholesale abandonment of the country’s existing electricity sources, but a phasing-out of fossil fuels that may also involve transitional measures to maintain current coal and nuclear plants, and also the use of transitional sources like gas,” said the Ministry of Finance on Thursday.

Integrated Resources Plan

The ministry highlighted that the government’s key planning instrument, the Integrated Resources Plan (IRP), envisions a combination of energy sources – including solar, wind, coal, gas and nuclear – to maintain the security of electricity supply at the most affordable cost to South Africans.

“Further, his point was that the fundamental purpose of the National Treasury’s plan to takeover a portion of Eskom’s debt is to allow the utility to focus on and invest in increasing its generation capacity.”

Minister is fully committed

The Ministry added that Godongwana is fully committed to the government’s Just Energy Transition framework, and the balance it envisions of accelerating investment in new generation capacity while protecting the communities that will be worst-affected by the move away from coal and other fossil fuels.

“The debt takeover, once finalised, together with other reforms, will ensure that Eskom is financially sustainable. The programme will allow Eskom to focus on plant performance and capital investment and ensure that it no longer relies on government bailouts,” said Minister Godongwana.

According to the ministry, the debt-relief relief programme is one of a suite of government interventions with the simple, but critical goal of securing South Africa’s short and long term energy supply needs.

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Compiled by Siphumelele Khumalo