Eskom’s black hole of debt keeps on getting bigger

(The Citizen, Johannesburg, 3 April 2019) Moody’s credit opinion issued yesterday on the heels of its recent decision to keep South Africa’s credit rating one level above junk, said elevated government debt and contingent liabilities risks from state-owned enterprises (SOEs), limited government’s ability to absorb shocks. The note came after Eskom’s announcement of a R2.5 billion loan from the New Development Bank in China on top of the R420 billion (US$29 billion) debt it’s already carrying, and there’s no say when the 670 MW of renewable energy it’s meant for, will come on line. Export credit agency finance is one of the sources Eskom is tapping as part of its R300 billion (US$21 billion) funding plan for the new build programme. More than three quarters of that funding has now been secured. On May 30, 2011, the Export Import Bank of the United States had loaned about R5.7 billion, adding at the time to “the R31 billion (US$2.2 billion) in export credit agency backed finance Eskom had already raised.