South African President Cyril Ramaphosa met with board members of Eskom in his fresh bid to salvage the cash-strapped electricity utility.
The meeting, which was also attended by the ministers of finance, mineral resources and energy and public enterprises, was called to establish alignment across the government on the actions to be undertaken to stabilize the energy utility in light of its financial and operational challenges.
During the meeting, Ramaphosa made it clear that the energy utility, Africa’s largest producer of electricity and one of South Africa’s most strategic assets, is critical to the country’s growth and development, his spokesperson Khusela Diko said.
According to Diko, the board presented a report on the implementation of a nine-point plan, focusing on its key priorities including the need to ensure uninterrupted power supply, cutting costs, driving efficiencies and increasing revenue through, amongst others, higher collection rates.
Ramaphosa will announce further measures to support Eskom’s efforts at recovery and financial and operational sustainability, she said.
As a state-run parastatal, Eskom provides about 95 percent of the electricity consumed in South Africa, but alleged corruption and poor management have brought the utility to the brink of bankruptcy, resulting in constant rolling blackouts that severely impede economic development.
The government has to fork out billions of rand every year to Eskom so as to keep the lights on.
Restructuring the debt-ridden utility has been one of Ramphosa’s top priorities since he was officially elected by parliamentarians as president in May.
Eskom is facing debts amounting to 420 billion rand (about 29 billion U.S. dollars). The utility has urgently appealed the government to help it repay the debt so as to prevent it from bankruptcy.
Ramaphosa has rejected repeated calls to privatize Eskom but pledged to restructure the entity in a process that will allow the private sector to be partners in electricity generation and distribution.
