Eskom is in debt to the tune of R420 billion.
That is larger than South Africa’s budget for health and education combined, and 8% of South Africa’s entire GDP.
Eskom went into this disastrous debt-spiral mainly due to the construction of two of the largest coal-fired power stations ever built - the dysfunctional Medupi and Kusile – and the pumped storage scheme Ingula.
The interest during construction is more than R100 billion.
Eskom can’t service the interest on its debt, as it does not make a profit.
It expects a loss of R20 billion for the 2018/2019 financial year.
Added to its woes is the ever-falling demand for electricity in response to the constantly above-inflation tariff hikes the energy regulator grants it.
Listen to the interview in the audio below (and scroll down for quotes from it).
Eskom’s interest on debt… stands at R45 billion per year…— George Glynos, Head of Research - ETM Analytics
It’s not just about Eskom. There are many state-owned companies that are defunct…— George Glynos, Head of Research - ETM Analytics
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