Enoch Godongwana and the finance ministry’s problematic relationship with Eskom needs to change if we are to get any relief

[View in browser]( [Mail & Guardian]( M&G Mornings | Tue 21 Feb   I don’t know how many budget speeches I’ve gone into waiting for a final solution to Eskom’s multi-billion rand debt issue and come out confused or worse, disappointed. Without a capital injection, its debt was all but guaranteed the minute the ailing parastatal was told to go about building Kusile and Medupi power stations off their balance sheet all those years ago. What we knew then when the construction of those coal-fired stations began, was that Eskom couldn’t do it alone — especially if the National Energy Regulator of SA wouldn’t be amenable to a rapid and steep increase in tariffs to bolster revenue. Well, the tariffs weren’t forthcoming because of political pressures, which left Eskom with a ballooning and unsustainable debt position it is in today. In such a position, were Eskom a listed company, we’d expect a rights issue in order to raise capital to clear its debt obligations. (Rather simplistic and very simplistic: a rights issue is basically when a company that has say 100 shares valued at R20, releases a further 10 shares for its existing shareholders to buy at R15, thereby raising an additional R150 for the company to settle debt or buy new equipment.) But, alas, Eskom isn’t listed and has just the state as its sole shareholder. So what’s the plan? I doubt we will discover one this Wednesday when Enoch Godongwana delivers his second budget speech. I’d love to be surprised. Ron Derby | Editor-in-Chief [@RonDerby]( Premium [With little detail about Eskom’s debt plan expected, budget could disappoint]( The utility’s R400 billion debt has fed into the country’s 15-year energy crisis and low growth potential, which has been identified as a key credit weakness Join thousands of South Africans who want a more just South Africa. Read past party lines, past the bluster and the distortion. Get the best reporting, analysis and commentary that is factual, balanced and fair with uninterrupted access to all Mail & Guardian content online. Plus - Preferential access to Mail & Guardian events - Get daily conversation starters straight into your inbox - An invitation to join the newsroom’s Review session on Friday mornings - Lend your expertise and experience to the stories we tell [// Read more]( Articles labelled as Premium are only available to subscribers. [CLICK HERE]( to subscribe Already a subscriber? [SIGN IN HERE]( [South Africa edges closer towards stage eight load-shedding]( Eskom loses half of its power-generating capacity, opening risks for longer cuts which will entail more than half the day with no electricity Join thousands of South Africans who want a more just South Africa. Read past party lines, past the bluster and the distortion. 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