Eskom’s Debt Liabilities Stand At About R450 Billion

The Western Cape has 9314 informal dwellings that cannot be electrified, because they are either on privately owned land, wetlands, road or rail reserves and noise corridors, among others.
Chief operating officer Jan Oberholzer revealed this at a briefing to the provincial legislature’s standing committee on finance, economic opportunities and tourism.

Giving an overview of formal versus informal electrification, Oberholzer said, “Unelectrifiable houses on privately owned land included backyard dwellings, where there is more than one wendy house in a compound.”

Oberholzer said while it was possible to get approval for a second metering on a single plot, anything more was illegal and customers were also not allowed to resell electricity legally, even though they were aware that it happened all the time.

He said one of the biggest issues facing Eskom was debt from municipalities where people are increasingly refusing to pay for electricity. Oberholzer told the standing committee, “The debt is getting out of control.”

Invoiced municipal arrears debt, including interest, has surged since last year to R19.9billion across municipalities, on top of the arrears in Soweto where debt has increased from R15bn in 2018 to R18bn this year.

Oberholzer said Eskom’s (short-term) and non-current (long-term) debt liabilities of about R450bn needed assistance from their shareholder, the government.

“We need debt-relief and we’ve asked the shareholder to assist with this significant challenge,” he said.

Speaking on the sidelines of the briefing about the City’s bid to buy energy directly from independent power producers (IPPs), Alwie Lester, Eskom’s general manager for the Western Cape, said: “From Eskom’s perspective, we want to see a good mix of energy in the country, and really our integrated resource plan (IRP) speaks to that.”

As what Eskom intended to do about the City’s plans, Lester said: “It is a decision that needs to be made by the minister in terms of whether to allow IPPs or not.”

In a bid to move away from sole reliance on Eskom for their energy needs, the City earlier this year went to court to challenge the Department of Energy and Nersa on the so-called “single-buyer” model in South Africa, whereby Eskom is given exclusive rights to produce electricity for resale, including electricity from renewable-energy IPPs.

The case will rule on whether municipalities have the legal power to procure electricity without permission, which is to be determined by the Mineral Resources and Energy minister.

Looking to this summer season, Eskom said in its system-status update that it wants to “avoid load-shedding, execute an average of 5500MW of planned maintenance, and encourage public participation and energy-saving initiatives”.

At the same time, Eskom board chairman and acting chief executive Jabu Mabuza told members of Parliament that Eskom remained in dire financial straits as it tried to claw back billions lost to corrupt activities, non-payment for electricity by both consumers, big customers and municipalities.

Briefing Parliament’s public enterprises portfolio committee, Mabuza presented Eskom’s annual report containing the audited financial statements and reflected on the R21billion loss, 30 days of loadshedding and R6.5bn in diesel spend to minimise the impact of loadshedding for the financial year that ended March 2019.